Commodity Conversations News Monitor

The question is, ‘Why are supply chains so messed up?’

Last week we wrote that more than 60 container ships are stuck off Los Angeles and Long Beach, but there are more than double that number — 154 as of Friday — waiting to load export cargo off Shanghai and Ningbo in China. There are now 242 container ships waiting for berths countrywide.

There is disagreement as to the percentage increase in container traffic this year compared to last year. Clarksons projects global container trade will reach 206.8m teu in 2021, up 6.3 per cent year-on-year. Maersk estimates that global trade volumes will grow 7 to 8 per cent this year compared with 2020. The container advisory CTI Consultancy put the annual figure in the 8 to 9 per cent range while Alphaliner predicts 5.8 per cent year-on-year growth.

Overall, the top 20 container ports handled 13 per cent more twenty-foot boxes in the first six months of 2021 compared to the same period in 2020. Still, the most startling figures come from the US, where Los Angeles/Long Beach and New York/New Jersey recorded a year-on-year throughput growth of 41 and 31 per cent, respectively.

A crane has collapsed at an export facility in Aberdeen on the US West Coast that handles about 20 per cent of US soybean exports. The damage could take months to repair, further complicating shipping logistics.

In this video, Cargill’s CEO argues that current high food prices are transitory. Many of the world’s central bankers agree. However, LDC’s CEO has warned that commodity markets face a period of intense volatility due to COVID-19, shipping congestion, and question marks over when the US Federal Reserve will start tapering monetary support. Hedge funds are taking advantage of this volatility to make good profits, particularly in niche commodities. Unfortunately, as the WSJ points out, price volatility can make it difficult for smaller traders to finance their everyday business.

The UN held its long-anticipated Food Systems Summit last week to set the stage for a transformation in global food systems to achieve the UN’s Sustainable Development Goals by 2030. The world’s media seems largely to have ignored the meeting.

Some indigenous farmers’ organizations had previously criticized the event, claiming it had been hijacked by the agro-industrial sector. Some scientists, researchers, and academics boycotted the event, afraid that it would put profits before people by focusing too heavily on technology such as digitalization, gene editing and precision agriculture. This article (in French) explains the reasons behind the boycott.

The UN defended the summit in a press release, writing that almost 300 Indigenous Peoples organizations participated.

Bill Gates, who knows something about technology, has invested in Iron Ox. This Silicon Valley-based start-up believes robots powered by artificial intelligence could farm more sustainably than traditional agriculture. The company says its mission is to make the global agriculture sector carbon negative.

Technology doesn’t have to be complicated or expensive to have an impact. In this long read, Bloomberg describes how a tiny piece of plastic is revolutionizing drip irrigation. Meanwhile, the Swedish company Volta Seafeed wants to make a seaweed-based cattle feed supplement that will reduce cows’ methane emissions by up to 80 per cent.

And while we are talking about meat, the Counter doesn’t believe the hype around cultured meat, arguing that it isn’t scalable economically. Impossible Foods is rolling out its plant-based meatless pork in Hong Kong, Singapore, and the US, and McDonald’s is pushing ahead with their plant-based product, a vegetarian burger called the McPlant, launching it in the UK.

Brazil’s coffee farmers have harvested 30.7 million bags of arabica this year, compared to 48.8 million last year, down nearly 40 per cent and the smallest crop since 2009. Brazil’s robusta harvest is, however, at a record. But while Brazilian coffee farmers struggle with the weather, climate change means that US farmers can now grow the crop. I can’t wait to taste some!

In an FT opinion piece, SovEcon warns that Russian government intervention in the domestic wheat market will disincentivize growers and cost the country its leading position as an exporter.

Reuters reports that the US Environmental Protection Agency (EPA) is proposing cuts in the amount of biofuel that must be blended into fossil fuels. The news agency obtained a document that suggested that the EPA would reduce 2020 and 2021 requirements to about 17.1 billion gallons and 18.6 billion gallons, respectively, compared to 20.1 billion gallons in 2020. The level for 2022 would reportedly be at 20.8 billion gallons. The EPA sets the 2020 and 2021 mandates retroactively. Administration officials cautioned that the numbers are not final and still subject to revisions

Indonesia has said that it will use existing laws to deal with issues around sustainable palm oil production after a moratorium on new plantation permits ended on 19th September.

Finally, the Guardian’s long-read this week is about an ‘ecofeminist movement’ in Africa, Nous Sommes la Solution (NSS), that wants to revolutionize African agriculture by promoting ‘sustainable agroecology’.

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