India has banned broken rice exports and imposed a 20 per cent duty on exports of various grades of rice, excluding parboiled and basmati rice. India accounts for over 40 per cent of global rice shipments, exporting a record 21.5 mln mt in 2021, more than the combined shipments of the world’s next four biggest exporters: Thailand, Vietnam, Pakistan, and the US. Rice loading has stopped, and nearly one mln mt of rice is trapped in the ports as buyers refuse to pay the export levy.
The move caught markets by surprise as monsoon rains, delayed in parts of India’s northern and eastern rice-producing regions, have improved over the last couple of weeks, boosting crop prospects.
Russian President Vladimir Putin wants to revisit the UN-brokered Ukrainian grain export deal, saying it has “cheated” developing countries. He claimed that only two out of 87 ships, carrying 60,000 mt, have gone to developing countries. He added that he wants to limit grain and other food export destinations.
However, the data shows that a significant percentage of the more than two mln mt of grains shipped under the agreement has gone to developing countries, with 400,000 mt shipped to Africa and more than 600,000 mt going to Asia and the Middle East.
Even so, Turkish President Tayyip Erdogan said Putin was right to complain that grain from Ukraine was going to wealthy rather than emerging countries.
Rather than being worried that Ukrainian shipments aren’t going to developing countries, Russia’s gripe is that Western sanctions restrict Russia’s ability to export grain and fertilizers. UN and Russian officials discussed the issue at a meeting last week in Geneva.
Russia’s foreign minister called for the removal of “logistic sanctions that prevent the free access of Russian grain and fertilizers to world markets.” He said, “Our Western colleagues are not doing what the UN Secretary-General promised us.” President Erdogan will meet President Putin next week to discuss the issue.
Ukraine says Russia has no grounds to review the Black Sea grain deal.
Last Sunday, Ukraine dispatched its biggest convoy of grain vessels under the deal after 13 ships carrying 282,500 mt of agricultural products left the Black Sea ports of Odesa, Chornomorsk and Pivdennyi.
However, at the current rate of exports, it will take around six months to ship the rest of the grain from Ukraine’s last harvest. The dangers of sending ships into the heavily mined Black Sea, along with a lack of large vessels, means volumes transported are well below Ukraine’s goal of doubling farm exports to at least 6 million tonnes by October. Ukraine’s farmers have already begun to sow their winter crops.
The Washington Post (via yahoo) has a good round-up of the toll that hot weather and drought have inflicted on US farmers. CNN looks at how Europe’s drought could mean a one-third drop in Spain’s olive oil production. (Spain is the world’s biggest producer of olive oil.)
Some European farmers are shutting down operations and reducing production because of the energy crunch. There are worries that high energy prices will lead to food shortages this winter, mainly fruit and vegetables.
The FT has a long read on Japanese agriculture that argues the case for reform. But reform is not easy. Holland’s Agriculture Minister resigned this week, indicating that the government is losing its battle to reform agriculture and reduce emissions. (The Netherlands is the world’s second-largest exporter of agricultural goods.)
Could meat go the same way as tobacco and sugar? The Dutch city of Haarlem certainly hopes so. It will become the first city in the world to ban meat adverts from public spaces.
Plant-based meat might not be the climate saviour that some predicted. Food Navigator writes that it is becoming the biggest category failure in food history. Plant-based meat does not live up to its hype, and manufacturers aren’t delivering the taste and texture consumers need to repeat purchases.
Will bean-free coffee and chocolate have more success?
Yara, the Norwegian fertilizer giant, is close to acquiring Petrobras’ fertilizer unit, known as UFN-III, based in Mato Grosso do Sul state. It could cost less than $100 million as the unit is not yet operational. Yara already owns five plants and 24 mixing facilities in Brazil.
Reuters reports that US ethanol plants produce more than double the GHG emissions per gallon of fuel production capacity than oil refineries. Meanwhile, carbon capture could give a new lease of life to algae biofuel.
The current downturn in the Capsize freight index is the sharpest since 2008. Average cape rates are under $6,000 daily, less than half of operating expenses.
Meanwhile, the container shipping industry may be heading for a hard landing after making more money in the last three years than in the previous six decades.
Finally, there has been some talk of imposing windfall taxes on food traders, but no one has mentioned the big investment banks. The big banks made record profits trading agricultural commodities in January-June this year – an estimated $600 million, twice the $300 million they made in 2021. However, this compares with the estimated $6.6 billion they made in oil and gas markets and the $3.1 billion they made in metals.
Click here for Bloomberg’s take on the past week’s food and agriculture stories.
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