Media Monitor

Commodities have been the best-performing major asset class for the past two years, although the FT warns that commodity trading remains risky and volatile.

The UN FAO World Food Price Index fell 1.9 per cent in December, closing the year one per cent lower than in 2021, the first annual decline since 2018. The 2022 average was, however, 14 per cent higher than the prior year.

UK food inflation hit 13.3 per cent in December, boosted by animal feed, fertiliser, and energy costs. Fresh food inflation hit 15 per cent in the month, up from 14.3 per cent in November, the highest monthly inflation rate for fresh food since records began in 2005.

About 600 ships have left Ukrainian ports carrying 16 million mt of agricultural products under the Black Sea grain corridor agreement. Despite harvesting difficulties, Ukraine’s government says that the country’s farmers could have exported three times as much.

By 6th January, Ukrainian farmers had harvested 49.5 million mt of grain from 10.7 million hectares of crops, with the yield averaging 4.64 mt/ha. They had completed the 2022 wheat and barley harvests, threshing 20.2 million and 5.8 million tonnes, respectively. In 2021, Ukraine harvested 32.2 million mt of wheat and 9.4 million mt of barley.

Russia exported over 500,000 mt of wheat from Crimea to Syria last year, a 17-fold increase over 2021.

The Baltic Dry Index began the New Year with its most significant daily percentage drop since 1984. However, Black Sea grain rates have risen to cover the higher cost of war risk insurance.

Thailand’s rice millers are worried that the country’s growers are illegally switching to cheaper and easier-to-grow Vietnamese rice.

Indonesia’s government has cut the amount of palm oil that producers can export to six times the domestic sales requirement, down from eight times currently.

The Hill compares European farming with US farming and finds the latter more efficient and sustainable. Meanwhile, Bloomberg writes that just three crops – wheat, corn, and rice – provide 50 per cent of the world’s calories. I am not sure that is correct, but the article has some great graphics.

In company news, Olam Group plans to list Olam Agri this year in Singapore, having completed the sale of a 35.43 per cent minority stake in Olam Agri for $1.24 billion to the Saudi Agriculture and Livestock Investment Co. (SALIC). The transaction was announced in March 2022 and values Olam Agri at $3.5 billion.

Although agriculture expansion has indeed driven some species to extinction, total agricultural land use may have peaked in 2000. It is now in decline due to a shift from grazing livestock to feeding them crops. (In Italy, farmers are once again grazing their livestock in the country’s forests, helping to prevent wildfires.)

At the same time, the EU’s import ban on products linked to deforestation could prompt other countries to do the same.

Many wild animals are making a comeback, including large animals such as whales and bison. Last year the first bison was born in the wild in the UK in thousands of years.

But it’s not just large animals. After nearly vanishing in the 1970s, there are more than 500 California condors in the US and Mexico, and ornithologists have discovered a nest of a titipounamu in New Zealand, a native bird thought to have been extinct for over 100 years. Lastly, there were 35 per cent more monarch butterflies in the Mexican forests in 2022 compared to 2021.

For biodiversity to thrive, the sector must continue to improve agricultural yields –which requires investment. Unfortunately, venture capital investment into the agri-tech and food sectors fell 44 per cent in 2022, while rising electricity costs are driving investors away from the vertical farming sector.

We also need governments to stop making idiotic decisions, as the Sri Lankan government did when they banned imports of fertiliser and chemical farm inputs. And although governments are encouraging sustainable farm practices,  we need them to be even braver in tackling agricultural emissions.

However, research continues, and progress is being made. For example, the US government has approved a vaccine for honeybees, while China has sent corn into space as part of research into new varieties. Finally, Syngenta will release a new type of hybrid wheat in the US next year, but only enough to plant 5,000 to 7,000 acres. (The company has been working on the project since 2010.

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