The Russian government will impose an export quota of 1.5 mln mt for sunflower oil and 700,000 mt for soymeal from 15th April to 31st August 2022. It will impose a ban on the export of sunflower and rapeseed seeds from 1st April to 31st August 2022.
Dmitry Medvedev, Russia’s President from 2008 to 2012 and now deputy secretary of the country’s security council said, “We will only be supplying food and agriculture products to our friends. Fortunately, we have plenty of them, and they are not in Europe or North America at all.” He added that the “priority in the food supply is Russia’s domestic market and price control within it.”
Ukraine’s agriculture ministry reports that, as of 1st April, the country’s farmers had planted 603,000 hectares, up from around 400,000 at the same time last year. It amounts to just under 4.5 per cent of the projected total area for main spring crops, which the ministry estimates at 13.4 million hectares, 3.5 million hectares less than last year.
APK-Inform estimates that Ukraine’s grain harvest could fall by 55 per cent to 38.9 mln mt in 2022 due to a sharp decrease in sowing and harvesting areas. The consultancy estimates wheat production at 14.865 mln mt, corn at 18.516 mln mt, and barley at 4.577 mln mt. It estimates sunflower production at 9.178 mln mt, down 45 per cent from last year. Fastmarkets looks at the various production scenarios here.
The head of the World Bank warned that Ukraine will need help to get fertiliser and seeds once Russia’s invasion is over. He also called for governments in advanced economies to reduce subsidies on biofuels and instead focus on targeting support to the poor.
ITC, India’s largest wheat exporter, expects India to export seven mln mt of wheat in FY 2022, up from 2.1 mln mt in FY 2021. The company expects FY 2023 exports to reach 21 mln mt. The government projects FY 2023 wheat exports to be around 12-15 million tonnes.
A delegation from Egypt is visiting India to facilitate wheat imports. The USDA estimates that Egypt’s wheat imports could fall to 11 million mt in the season that begins in July, the lowest in nine years. The agency also reduced its estimate for the current year to 12 million mt.
Wheat and corn prices continued their rollercoaster ride last week as hopes rose and then faded that Russia and Ukraine would reach a peace agreement.
China sold 546,015 mt of wheat at an auction of its state reserves on 23rd March at an average selling price of 2,884 yuan ($453.05) per tonne.
The German farm association DBV has called for temporary adjustments to the EU’s Common Agricultural Policy to allow farmers to plant on fallow land. It also called for setting up national fertiliser reserves.
Two US senators have asked the US Department of Agriculture to allow farmers to plant crops on acres enrolled in the Conservation Reserve Program (CRP). The USDA is opposed to the idea.
The USDA expects farmers to plant more soybeans than corn for just the third time ever. The agency predicts planted area at 89.5 million acres of corn this season, down from 93.4 million last season. It expects soybean sowings to rise to a record 91 million acres, compared to industry estimates of 88.9 million. Wheat acres are expected to rise only 1 per cent.
High fertiliser prices are driving this switch to soybeans, with prices up between 50 and 125 per cent compared to a year ago. The DAP Fertilizer Price Index hit a record high last week of $1,014/mt. Prices for nitrogen fertiliser ammonia in Tampa surged 43 per cent to $1,625/mt.
The US administration is considering temporarily removing restrictions on summer sales of E15 gasoline blends to lower fuel costs for motorists. Ethanol is currently cheaper than gasoline. The Counter has an excellent long-read on the food versus fuel debate, arguing that the war in Ukraine may mean we have to make the impossible choice between affordable food and greener fuel earlier than we had thought.
Food processing companies are replacing sunflower oil with palm, soybean, and rapeseed oil. The Jakarta Post writes that European consumers are dampening their objections to palm oil as sunflower oil prices rise.
The supermarket chain Iceland will temporarily use palm oil in its own-label food due to the high price of sunflower oil. Iceland committed to eliminating palm oil from its products in 2018. The company’s CEO said he is making the shift with “huge regret and would use sustainable palm oil as “a last resort and a strictly temporary measure.”
High vegetable oil prices are resulting in demand destruction, with food processors and restaurants switching from fried to steamed food.
But high prices are destroying demand not just for vegetable oil. An index tracking Mexican avocado prices is up 81 per cent this year to 760 pesos ($38) per 9-kilogram box, the highest since 1998. A slice of pizza in New York now costs more than a subway ride for the first time since the 1980s.
Food prices are rising fast in Russia. Most of the ingredients needed to make borscht saw double-digit price increases in a single week, with onions soaring by more than 18 per cent and cabbage by nearly 16 per cent.
A study published in Nature Food raises concerns over the ability of Southeast Asia to retain its title as a major rice supplier to the world. Indonesia and the Philippines are already struggling to produce enough rice for their own needs.
Brazil’s largest coffee exporter sees its arabica-bean shipments rising to a record this year as the logistic snarls that hampered flows last year ease. The cooperative Cooxupe expects to increase exports by 20 per cent to 5.9 million bags in 2022 versus 4.9 million bags in 2021. The cooperative expects a similar harvest as last year but plans to raise shipments using stockpiles and third-party coffee.
The EU has “pressed the pause button” on its sustainable agricultural policy, the Farm to Fork strategy, to ensure that food security is “guaranteed for the European neighbourhood” during the war. However, the EU’s long-term ambition for the sector remains unchanged.
The NGO Reporter Brasil claims that McDonald’s is unknowingly buying beef from illegally cleared ranches in the Pantanal and the Amazon. It says that livestock is shuffled between farms to hide their true origin.
Maersk has warned that the semi-lockdown in Shanghai will increase transport costs and delay shipments.
Finally, in company news, Bloomberg writes how Sucden’s main shareholder is transferring shares to his sons as he passes the company on to a third generation.
© Commodity Conversations ® 2022
Many of the above links require subscriptions. Please support quality journalism.