Food and agriculture have been making the headlines, with Indonesia’s ban on palm exports adding fuel to the food price fire caused by Russia’s invasion of Ukraine.
BloombergQuint has a long read on the fertiliser shortage, writing, “For the first time ever, farmers the world over — all at the same time — are testing the limits of how little chemical fertiliser they can apply without devastating their yields come harvest time. Early predictions are bleak.”
Other articles were less well-informed. The NY Times writes, “Prior to the war, Russia and Ukraine together exported over one-fourth of the world’s wheat.” (The world’s farmers produced 776 mln mt of wheat in 2020/21 and exported 202 mln mt, of which Ukraine and Russia exported 55 mln mt.)
Ukraine exported 567,991 mt of grain via rail through 27th April and has shipped its first Panamax-sized bulk carrier of Ukrainian corn since the Russian invasion from Constanta in Romania. At the same time, Ukraine’s spring sowing campaign continues to progress, advancing by another 570,000 hectares, or four percentage points, between 21st-25th April.
Indonesia widened its vegoil export ban to crude palm oil, raising concerns over food protectionism. There is some discussion about how long the ban will last as the country may run out of storage capacity and restart exports as early as May. In the meantime, Indonesia’s navy has already seized two palm oil shipments. The ban has raised awareness of palm oil’s role in our diets.
The UK Food Standards Agency has ruled that, due to exceptional circumstances, products labelled as containing sunflower oil may now also include fully refined palm, coconut, or soybean oils without changes to the labels.
It’s an ill wind that blows nobody any good. Indonesian palm oil growers will suffer because of the ban, but Malaysian palm growers benefit from higher palm prices. Counter-intuitively, Malaysia has urged countries to reconsider their biofuel programmes despite recently committing to continue their own biofuel programme.
India’s wheat farmers and exporters benefit from higher wheat prices, and exports are already flowing. However, an unusually early record-shattering heatwave has reduced Indian wheat yields, raising questions about how much wheat the country can export. Meanwhile, the US President has asked Congress for $500 million to encourage US farmers to double-crop their fields and grow more wheat.
Bunge and ADM published better than expected results, and Bloomberg drew attention to the impact of higher volatility on traders’ profits. The news agency issued an opinion entitled “Commodity Traders Can’t Go ‘Unregulated’ anymore.” Cargill, however, worries about increased transport costs and argues that it is getting too expensive to export soybeans from Brazil.
Scientists are using satellites to monitor methane gas emissions from livestock farms. Meanwhile, cow masks that capture methane gas have won an award as part of the UK’s Prince of Wales’s Sustainable Markets Initiative. The devices could reduce methane emissions from cow burps by more than 50 per cent.
Finally, there are signs that port congestion is easing, with less than 40 ships waiting outside of the ports in Los Angeles and Long Beach, down from more than 100 earlier this year
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