Ag-Trader News

The War in Ukraine – one year on

A new report estimates Russia’s invasion cost Ukraine $11.5 billion in lost crop production in 2022:  sunflower at $3.032 billion; wheat at $2.513 billion; corn at $2.143 billion; and barley at $837 million.

Ukraine has asked Turkey and the UN to begin talks to extend the Black Sea grain deal, seeking an extension of at least one year. The agreement will expire on 18th March unless an extension is agreed. Russia said that it would be inappropriate to extend the deal unless sanctions affecting its agricultural exports are lifted, and other issues are resolved.

China has included maintaining the grain corridor as point nine in their recently published twelve-point peace plan.

In the meantime, Ukraine has proposed increasing the minimum tonnage of ships which export grain and vegetable oil from the country via the grain corridor and a new mechanism for queueing.

Grain exports from Ukraine have fallen recently, with ship inspections now half of what they were four months ago, with a backlog of 140 ships waiting for checking. Ukrainian and some US officials blame Russia for slowing down inspections, which Moscow has denied.

Ukraine has exported 21.1 mln mt of agricultural products under the agreement, including ten mln mt of corn and six mln mt of wheat. Click here for a full breakdown of the receiving countries and quantities exported.

An increase in the depth of a canal linking the River Danube with the Black Sea could improve logistics for Ukraine’s shallow water ports and improve flows out if the grain corridor agreement collapses.

Russia’s President has lauded the country’s farmers and announced a push to export 60 mln mt of grains by the end of 2023.

Other market news

Argentina’s worst drought in 60 years is disastrous for local communities, destroying crops, bankrupting farmers and reducing exports. Bloomberg writes that it is not related to climate change. Chile is also suffering, with the country’s far south experiencing its worst drought in 50 years, hitting cattle ranchers and vegetable farmers.

France is not doing much better, suffering its worst drought in 64 years. Authorities are preparing water restrictions, including on crop irrigation.

High prices are encouraging wheat-importing countries to purchase supplies for only about two to three months of their future demand versus typical buying of up to six months forward.

India will sell an additional three mln mt of wheat stocks to reduce domestic wheat and wheat flour prices. In addition, the government has said it does not plan to lift a ban on broken rice exports and cut a 20% tax on overseas shipments of white rice.

The trade war over GM corn between the US and Mexico continues with little sign of a settlement. The US has refused an offer from Mexico to allow GM corn imports for animal feed. Meanwhile, China’s farmers are starting to plant GM corn, but less than one per cent of total corn acreage.

Ivory Coast is restricting some multinational traders from additional bean purchases for exports as the country seeks to avoid a shortage. A cash shortage has left Nigeria’s cocoa farmers unable to hire workers and exporters unable to get the crop to ships.

Brazil has halted beef exports to China after confirming a case of mad cow disease. China is the leading destination for Brazilian beef, accounting for about 60 per cent of the nation’s exports.

Bloomberg writes that onions are the latest victim of what they have previously called a global food crisis.

The UK is going through a domestic food crisis with a shortage of fruit and vegetables, particularly salad and tomatoes. The supermarkets and the government blame bad weather in southern Europe and north Africa. Others blame Brexit as there is no shortage in the EU or Switzerland. A government minister suggested that the British should eat turnips instead.

The FT writes that “Nestlé sells fewer products after increasing prices.” (I think I could have guessed that).  The newspaper adds that Danone will increase their prices further this year after raising them by 8.7 per cent in 2022.

Bloomberg’s French coq-au-vin index shows a 14.7 per cent increase in January from a year earlier. The newsagency’s UK breakfast index has soared to a record high, jumping by more than 22 per cent from a year earlier in January.

Fertiliser and crop inputs

French health and safety authorities have ordered a halt to some uses of one of France’s most widely used weedkillers, S-metolachlor, used mainly on maize, sunflower, soy and beet crops.

Morocco’s OCP Group, the world’s largest phosphate fertilizer company, saw record earnings in 2022.

The New Scientist writes of the benefits to soil health of applying biochar, a charcoal-like solid rich in carbon, to the soil.

Bloomberg has a video on how the global fertilizer crisis threatens food security.

An Israeli company has found a way for plants to access nitrogen better, potentially reducing the need for fertilizer. Others are betting on peecycling. The FT tells us that “the urine passed by one adult in a day is enough to produce a loaf of bread”. (Yes, but what would it taste like?)

Other Innovation

Regular readers will have guessed that I am unconvinced about the potential for vertical farming, but I may have to change my ideas. A recent trial to grow wheat has shown that vertical farming can deliver five crop cycles per year, producing the equivalent of 273 acres of conventionally grown wheat in a 10-acre vertical farm.

Mercore, the global trade fintech group, has executed a trade finance transaction utilizing a digital bill of exchange for Abercore, a UK-based trader. believes that farmers face five challenges to feed the world: climate change, biodiversity loss, insufficient acreage, growing population, and low investment.

Capturing carbon on the farm could start to pay off as carbon prices rise.

The Conversation believes that adding sails to cargo vessels can significantly reduce carbon emissions.

Brazil’s Supreme Court has ordered Bayer to return to Brazilian soybean farmers the 1.3 billion reais ($252 million) in royalties charged for GMO soybean seed.

The FT writes that France’s ban on disposable plastic packaging has been more challenging than anticipated.

The Conversation believes that New Zealand’s plan to tax cow burps will do little to slow or stop global warming.

Finally, the prize for this week’s best headline goes to Euronews: “Baby kangaroo poo could be the secret to stopping cows’ methane farts.” How did they discover that?

© Commodity Conversations ® 2023

Many of the above links require subscriptions. Please support quality journalism.

Leave a Reply