My last Ag-Trader News

US grocery prices may finally be falling. The March CPI showed seasonally adjusted prices for food consumed at home dropped 0.3 per cent compared to February – the first drop since September 2020.

The news from the UK is less encouraging. UK food and drink inflation reached 19.1 per cent in March. The Guardian, predictably, blames it on corporate greed.

The Black Sea

Russia says it will not renew the Black Sea grain export corridor beyond 18th May unless the West agrees to lift restrictions that hinder its agricultural exports. Russia’s foreign minister says that, so far, practically nothing has been done.

Analysts expect exports through the corridor to wind down gradually before the end date. Meanwhile, Ukraine is looking to bolster exports through the three ports in the Danube cluster.

Russia had already suspended inspections of vessels waiting to exit or enter the Ukrainian Black Sea for two days last week, blaming the UN and Ukraine for failing to register ships correctly.

The UN said it was talking intensively to the parties involved. “It is in everyone’s interests to keep the initiative going,” it stressed, saying it benefited “millions of vulnerable and low-income households”. Russia’s invasion of Ukraine is already causing a global shift in the trading of grains and causing hunger in importing countries.

In an attempt to regularise trade policy after Poland, Hungary, Bulgaria, and Slovakia announced bans on food products from Ukraine, the European Commission announced emergency preventative measures, including €100 million in compensation for affected farmers. Until the end of June, Ukrainian wheat, maize, rapeseed, and sunseed entering Bulgaria, Hungary, Poland, Romania, and Slovakia will only be allowed for re-export.

Russia will harvest about 123 million mt of grain this year, including 78 million mt of wheat. It compares to a record grain harvest of 153.8 million mt in 2022, with over 100 million mt of wheat. This year’s figures include Ukrainian territories claimed by Russia.

Cargill has warned that Russia’s increased control of its wheat exports threatens to obscure prices and curb efficiency in the global grains market. With international grain traders pulling out of Russia, the Russian farming conglomerate Ros Agro looks to expand.

Other market news

Southern Europe’s farmers face a crisis following months of drought. Some Spanish ecologists warn the country may soon be unable to sustain cereal crops such as wheat and barley.

The return of the El Nino weather phenomenon, fuelled by climate change, could result in record temperatures in 2023 or 2024.

Following a record drought, Argentina has met with the IMF to reschedule its $44 billion loan programme.

Australia will suspend their WTO complaint against China after Beijing agreed to review its tariffs on Australian barley.

With climate change threatening Arabica coffee production, producers are experimenting with liberica, another coffee species.

EU beekeepers have called for stricter rules against honey laundering – the imports of honey laced with sugar syrup.

Company news

After posting a record net income of $6.7 billion in the year ended 31st May 2022, Cargill’s earnings over the following nine months were $3.2 billion. Revenue for the period was $133.5 billion, compared with $165 billion for the preceding full year.

Institutional investors in Nestlé are pressuring the company to become less reliant on unhealthy products, warning that consumers’ overconsumption of packaged goods with limited nutritional value poses “systemic risks” to financial returns.

Private-equity funds bought a record 786 food and beverage manufacturers worth $32 billion in 2021, believing they would be profitable no matter how the economy fared. Higher labour costs, supply-chain disruptions, and surging inflation have upset those predictions.


The European Parliament has approved legislation to ensure that imports of various products, including palm oil, coffee, soy, wood, cattle, cocoa, and rubber, are deforestation-free. Critics argue it will be almost impossible to implement the law.

The Dutch government has paused work on its programme to shut down farms to reduce GHG emissions after the Farmer Citizen Movement (BBB) performed well in provincial elections. The Dutch minister for nature and nitrogen policy said there are no easy paths to cleaning the environment of excess nitrogen, and farmers’ suffering was unavoidable.

The FT warns that the EU’s pledge to hit net zero emissions by 2050 may be at risk unless Brussels brings farmers on board.

US President Biden has pledged $500 million over five years to fight deforestation in Brazil, making the US one of the largest donors to the global Amazon Fund. Congress is unlikely to approve the measure.

A new study argues that the world’s agricultural systems could feed 20 billion people but could wreck the planet. The FAO argues that there are too few women in agriculture, and they still occupy only a marginal place.

Unilever says that the procurement profession is going through a midlife crisis as sustainability and procurement become more integrated into the regulatory landscape.


Scientists have found a way to break down the tough lignin in plant material using anaerobic fungi, potentially providing a new path for cellulosic ethanol.

Germany’s biggest biofuels producer says that if we want to save the planet, we should give up meat before we give up biofuels.

Finally, Maersk is celebrating the launch of the world’s first green methanol-powered containership.

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Editor’s Note: I am sad to say that this is my last news summary. From now on, I will concentrate on interviews and books. Thank you for your continued support.

Ag-Trader News

The UN FAO world price index fell in March for the 12th consecutive month and is now down 20.5 per cent from a record high one year ago. It is the lowest since July 2021.

However, UK grocery inflation has hit a new record high of 17.5 per cent. Sky News blames rising sugar prices, while the FT blames fruit and vegetables.

 The War in Ukraine

Poland and Ukraine have agreed to temporarily stop all Ukrainian grain imports into Poland, although the restrictions do not extend to the transit of grain. Polish Agriculture Minister had resigned earlier in the week over the issue.

Thousands of farmers protested across Romania over the impact of Ukrainian grain imports, blocking traffic and border checkpoints with tractors and trucks.

Ukraine’s first deputy farm minister said his country might export a further 15.6 million mt of grain in the April to June quarter, which would lift this season’s exports to nearly 53 million mt.

However, Russia’s Foreign Minister has warned that Russia may pull out of the Ukrainian grain export deal if the West fails to remove obstacles to Russian agricultural exports. He said a lack of access to insurance and the SWIFT financial messaging system curtails exports.

Cargill, Viterra, and LDC will exit the Russian domestic grain export markets and stop elevating activities (buying grain from farmers, moving it to the ports and loading it onto vessels.) They will still trade Russian grain, but only on a FOB of C&F basis. (Click here for LDC’s press release.)

ADM is reevaluating its activities in Russia, particularly its joint-venture corn sweetener operations with partner Aston. Bloomberg’s Javier Blas has an excellent take on the news.

CME asks whether the war has broken the link between energy and ag prices.

Other market news

 El Niño is forecast to return in 2023. Here’s what it might mean for extreme weather and global warming.

There were reports that India could see a one million mt drop in wheat production this season due to unseasonal rains and hailstorms in pockets of Punjab, Haryana, and Rajasthan, resulting in losses ranging from around 25-50 per cent.

However, the country’s Food Secretary said the government does not expect any shortfall in wheat production. He added that the country would “probably end up with the same figure of 112 million mt of production or in the worst-case scenario, there will be a negligible drop.”

Even so, India’s government said the wheat export ban would continue if the country feels uncomfortable with domestic supplies. Meanwhile, the government may relax norms to procure wheat from farmers for domestic reserves.

The Business Recorder is worried about global wheat security, writing that per capita availability has declined from 111 kg per person in 1990 to under 100 kg per person in 2020. Meanwhile, The Economist is worried about rice yields, writing that they have increased by less than one per cent yearly over the past decade.

Argentina, expected to harvest around 25 million mt of soybeans this season, may have to import up to 10 million mt, more than double previous years, mainly from Paraguay and Brazil. Luckily, Brazil is harvesting a record crop.

Agricensus has a long read on the changing dynamics in world soybean flows.

Some US farmers are switching to non-GM corn to meet Mexico’s ban on GM corn.

Brazil’s Agriculture Minister has asked COFCO for further investment in Brazilian railways and waterways and financing farmland restoration.

Egypt has raised domestic food subsidies spending by 20 per cent in its FY 2023/24 draft budget.

Tunisia’s agriculture ministry has banned water use for irrigation because of a disastrous drought.

Nutrien’s CEO has warned that global fertiliser supplies will stay tight in 2023.

Shell has abandoned plans to make biofuels in Singapore, particularly SAF (Sustainable Aviation Fuels).


A group of US congressmen have introduced a bill to scrap the exemption for ocean shipping companies from federal antitrust laws.

Danish owner J Lauritzen has signed a letter of intent to build at least two methanol dual-fuelled bulk carriers in Japan, backed by long-term time charters to Cargill.

The global operations director for Cargill Ocean Transportation in Geneva has given an excellent interview.

Livestock farming

Climate change could significantly shrink profit margins for the world’s meat and dairy farmers, according to an estimate by a large investor group known as FAIRR.

Farmers protesting against the Dutch government’s plans to reduce livestock numbers have formed a political party.

The Washington Post asks whether carbon-neutral beef is a pipe dream.

Environmentalists are objecting to an A-minus sustainability grade that the Climate Change Report has given to JBS, a Brazilian meat company previously linked to deforestation.

Italy’s government has approved a bill banning laboratory-produced meat to protect the country’s livestock farmers.

An Australian company has made a meatball from lab-grown cultured meat using the genetic sequence of the long-extinct mammoth. Meanwhile, a Belgian startup has added woolly mammoth protein to a plant-based burger. (Will Pterosaur Nuggets be next?)


Deforestation associated with oil palm cultivation has declined in recent years in Indonesia. Still, the forest is being cleared at a record pace in a biodiversity haven at the northern tip of Sumatra.

Bloomberg has an interesting short video on how the sector is working to make palm oil more sustainable.

The Bureau of Investigative Journalism has found that migrants on the UK’s farmworker visa scheme face systematic bullying, abuse and growing debt.

Reuters has a long read on the failed attempts to raise income for West Africa’s cocoa farmers.


ADM and Brightseed have partnered to decipher the molecular interactions between dietary plants and gut microbes and their potential impact on human health.

Researchers at the University of Bonn have discovered gene variants in wheat and barley that improve nitrogen utilisation.

Bloomberg has an article on how Bunge is helping food processing companies to innovate.

Lastly, we have known for a while that plants communicate with one another, but a new study identified words and found that different species speak different languages.

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Ag-Trader news

Ukraine war

Traders were caught a little off balance last week by a report that Russia could temporarily halt wheat and sunflower exports after a sharp drop in global prices.

Reuters quoted a source as saying that the government has asked exporters to set a wheat export price of not lower than $275 per tonne “until further notice”.

Traders were already confused about the Black Sea grain corridor extension. Ukraine says it has been extended for 120 days, while Russia says it is only for 60 days.

Russia has laid out their conditions for agreeing to any further extension, including restoring access to the SWIFT system for state-owned agriculture-focused bank Rosselkhozbank, resumption of farm machinery supplies, and unblocking foreign assets and accounts held by Russian agricultural companies.

The FT has an excellent long read on how Russia’s invasion has destroyed significant parts of Ukraine’s grain export infrastructure.

Ukraine’s farmers are planting less acreage than last year. The International Grains Council forecasts Ukraine’s grain output at 47 million mt, about half its pre-war level. The government has warned that the 2023 combined grain and oilseed harvest could fall to 63 million mt, down from 70 million mt harvested in 2022. The good news is that the winter grain crops are in a good-excellent state.

The European Commission has proposed allocating €56 million from the EU budget to help Poland, Bulgaria, and Romania cope with increased imports of cereals and oilseeds coming from neighbouring Ukraine. Ukraine’s exports have particularly hurt Romania’s farmers.

Other market news

The La Niña weather phenomenon has officially ended, but there is a 50 per cent possibility that an El Niño event could form later this year.

The UK’s annual food price inflation hit 18 per cent in February, the highest level since the 1970s, pushing the Consumer Prices Index up by 10.4 per cent compared to a year earlier. The price of Bloomberg’s basket of English breakfast items soared past £35, an increase of more than 22 per cent from a year earlier.

A Brexit-induced farm labour shortage is partly to blame for the rise.

The Indonesian government has approved a variety of GM wheat for human consumption designed to resist drought better. In a long read, World-Grain asks whether GM wheat has a future in the US.


The UK government plans to eliminate import tariffs on palm oil from Malaysia, the price of joining the Comprehensive and Progressive Trans-Pacific Partnership (CPTPP).

Bloomberg fears that a global biofuel boom could lead to a shortage of vegetable oils.

Chevron has announced a collaboration with Corteva and Bunge to produce renewable diesel from canola. The joint venture will plant as many as 10 million additional acres of canola in the southern US.

Big companies are abandoning research into producing biodiesel from algae, but the BBC wonders whether kelp has a future in sustainable aviation fuel.

Company News

Bunge has made it into the S&P 500, replacing the ill-fated Signature Bank.

Louis Dreyfus Company (LDC) reported a 44 per cent jump in 2022 net profits to just over $1 billion from $697 million in 2021.  Net sales rose almost 21 per cent to $59.9 billion from $49.6 billion.

Viterra posted a record EBITDA of $2.65 billion for the 2022 calendar year, a 21 per cent increase from the previous year. Revenue increased 35 per cent to $54 billion.

Container shipping companies have been in the spotlight, paying billions of dollars in dividends following last year’s record profits.

Animal Farm

China has agreed to resume imports of Brazilian beef and approved four new beef packers. Brazil voluntarily halted exports to China on 23rd February after discovering an atypical case of mad cow disease.

Meanwhile, a surge in African swine fever infections in China could reduce domestic pork production.

Switzerland has reported a case of mad cow disease – bovine spongiform encephalopathy (BSE) – in the eastern region of Grisons. The relevant authorities classified the case as atypical.

Avian influenza’s spread through Europe’s poultry flocks has eased, but authorities are concerned that cases may rebound as wild birds migrate in spring.

The Environment

The latest IPCC climate report paints a stark picture of the world’s food systems, but solutions exist.

Are we facing phosphogeddon? Some scientists warn that the misuse of phosphorus could lead to a shortage of fertilisers. However, the problem may be solving itself. We may already have reached peak fertiliser. Microbes and regenerative agriculture might accelerate the move away from fertiliser.

Paraquat, banned in more than 50 countries, including the EU, China, and Brazil, is still one of the most popular herbicides in the US. It will go on trial in October, accused by more than 3,000 farmers of contributing to their Parkinson’s disease.

European lawmakers have finally agreed on a timeline for the EU’s plan to cut pesticide use, which leaves a final deal on the file unlikely in 2023.

In a long read, the FT argues that rich nations are not looking good in the debate over palm oil. They are also behind on their plan to plough $1 billion into soybean and cattle farming free of deforestation in threatened South American ecosystems by 2025.

PepsiCo’s chief sustainability officer has warned that half of the world’s population will face water scarcity as soon as 2025.

A study published in Nature shows that cradle-to-grave emissions from food loss and waste represent half of total greenhouse gas emissions from food systems. If correct, it might mean that the best – and easiest – way you can help the environment is to stop throwing food away.

The FT has a different take. It writes that selling your SUV is the best way to help the environment is to sell your SUV.

Nutrition and Health

Nestlé says less than half of its mainstream food and drinks are considered healthy.

It is ironic – and perhaps inevitable – that Novo Nordisk, the maker of the weight-loss drug, Wegovy, is now worth more than Nestlé SA, the world’s biggest food company.

But why do we like unhealthy and fattening foods so much? A new study published in Neuroscience News attempts to answer that question, while the New Scientist explains why people regain weight after dieting.

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Ag-Trader News

Russia will talk with the UN in Geneva this week about renewing the Ukraine grain export deal. Ukraine will not speak directly with Russia but through its partners. The UN Secretary-General visited Ukraine last week to discuss the deal.

Russia has said that the current deal was only being “half-implemented”, raising doubts about whether it would allow an extension of the agreement due to expire next week. Russia said it would only agree to extend the if the interests of its agricultural producers are considered. Even so, Cargill’s Chairman is optimistic that the Black Sea deal will be renewed.

Ukraine exported 5.2 million mt of grain in February, bringing overall grain exports so far this season to 32.3 million mt, down almost 26 per cent on the previous season.

Ukraine’s grain harvest may fall 37 per cent to 34 million mt in 2023 because of a smaller grain sowing area and lower yield. In the short term, most of Ukraine’s winter grain crops – winter wheat and barley – are in good condition and could produce a good harvest.

It will be a challenge for the country to rebuild its agricultural production in the long term. The war has degraded at least 10.5 million hectares – a quarter of the country’s agricultural land.

Other market news

The UN FAO Food Index fell 0.6 per cent in February, down for an eleventh month in the longest run of losses in data going back three decades. The index is down 19 per cent from a record set in 2022.

However, UK grocery prices rose at an annual rate of 17.1 per cent in February, their fastest pace in 15 years, adding £811 to the average British household’s yearly shopping bill.

Wealth managers and banks are again encouraging their customers to buy commodities in times of inflation, a strategy that failed in the past.

LDC expects global food prices to stay volatile this year.

Hedge funds have made a significant comeback into commodities this past year, offering massive signing bonuses to bring on expertise. Citadel is one recent entrant that has been successful.

The US has requested formal trade consultations with Mexico over the country’s plans to limit imports of GM corn. If you, like me, struggle to follow the US corn dispute with Mexico, Reuters has a good explainer.

China looks to shore up its food security amid heightened geopolitical risks and wants to boost its grain production capacity by 50 million mt in 2023.

Climate / Weather

The La Nina weather phenomenon appears to have ended after provoking three years of crop-destroying droughts. Some meteorologists believe it will quickly transition to El Nino, even as early as this Northern Hemisphere summer.

Argentina’s farmers will be relieved. However, the damage has already been done. Forecasts for the country’s 2022/23 soybean harvest have been cut to 27 million mt, even worse than the 27.5 million mt harvested in the 2000/2001 season.

Drought has also affected corn production. The government will allow corn exporters to reschedule planned corn shipments.

Italy and France are bracing for a second consecutive year of drought after an abnormally dry winter.

There is confusing news from Australia where the BBC headlines the latest ABARES report with the headline Australia: Crop exports set for record high after heavy rains. At the same time, Bloomberg goes with Australia Sees Wheat Exports Plunging 20 Per Cent on Drier Climate.

North Korea is teetering on the brink of famine with a surge in deaths from hunger. The country’s leader has ordered urgent infrastructure improvements and farmland expansion to ramp up food production.


Brazil has approved the cultivation of drought-resistant GM wheat, making it the second country after Argentina to do so.

Further north, BASF is halting the development of hybrid wheat in North America after the results of seed trials failed to reach development goals. Growers fear it could drive more wheat acres out of the US.

Meanwhile, acres of non-durum wheat in Canada could rise as much as 7.3 per cent in 2023 as growers shift acres away from oats and pulses.

There is an increasing possibility that India, the third-biggest producer of wheat in the world, will import wheat to supply the domestic market.


Brazil will produce six billion litres of corn ethanol in the 2023/2024 season that begins in April, up 36.7 per cent over last season. Corn ethanol is expected to account for 19 per cent of all ethanol consumed in the country next season, up from 13.7 per cent in the current season.

Palm Oil

Indonesia plans to require crude palm oil exports to go through a futures exchange to create the country’s own benchmark price.

A leading analyst told a conference that the EU’s deforestation law is unlikely to have a meaningful impact on palm oil demand as consumption is rising consumption in developing countries. Indonesia’s biofuel policy should also help to keep prices high.

Sustainable development

Child labour and deforestation still plague the cocoa supply chain.

A new study warns that emissions from the food system alone will drive the world past 1.5C of global warming unless high-methane foods are tackled. The Washington Post suggests you eat these climate-friendly foods if you want to help. Unfortunately, avocado is not one of them.

Australia is pushing ahead with plans to phase out live sheep exports.

The debate continues over the pros and cons of vertical farming. Some believe that the bubble is finally popping.


India has withdrawn trading licences for oil tankers and bulk carriers that are more than 25 years old.

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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?

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Ag-Trader News


Goldman Sachs commodities unit made more than $3 billion in 2022, up from closer to $2 billion in the previous two years.

McKinsey has published a report on the future of commodity trading. The consultancy predicts shipping times will increase eight per cent, energy prices threefold, and interest costs sevenfold between 2020 and 2024. It expects working capital requirements for commodity trading to rise to $500 billion.

The FAO Food Price Index fell 0.8 per cent in January, the tenth consecutive monthly decline. With this latest decline, the index has fallen 17.9 per cent from its peak in March 2022.

However, global food supplies are still at risk, and shoppers worldwide will pay even more for groceries this year than in 2022. Nestlé, the world’s biggest food company, has already warned it will increase prices this year to offset higher production costs that it has yet to pass on to consumers.

Traders have accused Russia of purposefully slowing the pace of Ukrainian grain exports after January ship departures fell to their lowest since August. The deal expires in March, but Turkey, at least, expects it to be extended “for a longer period.”

Farmers in the EU’s eastern member countries are unhappy about the increase in Ukrainian grain imports, and Hungary has imposed strict quality and safety inspections on them.

In India, a lower-than-expected planting area may cap a previously expected rise in wheat production. The government may extend the export ban as a result.

Chinese pork prices have fallen by almost per cent since Beijing began relaxing Covid restrictions, raising a question mark over China’s import demand for crop proteins.

Company News

Bunge reported an adjusted net income of $336 million for the fourth quarter, or $2.21 per share, up from $231 million or $1.52 per share in the previous year’s quarter. The fourth-quarter profits exceeded estimates as crush margins, and global crop demand bolstered its core agribusiness.

In an interview, Cargill’s new CEO warned against weaponising the global food chain. The company’s Brazilian unit announced a $240 million time deposit to fund ESG projects in the country. Meanwhile, the company closed its grain elevator in Portage, Indiana, but has completed its acquisition of Owensboro Grain Company, a soybean processing facility and refinery in Owensboro, Ky.

Mondelez has set aside 300 million euros to resolve an EU antitrust investigation into whether it blocked cross-border sales of its products in the EU in breach of competition rules.

Impossible Foods will cut about 20 per cent of its staff. The company currently employs about 700 workers.


Maersk reported Q4 profits (EBITDA) at $6.5 billion, bringing full-year 2022 profits to $36.84 billion. The company expects profits to fall to (what Bloomberg considers) more normal levels of between $8 billion and $11 billion in 2023.

Even so, Maersk believes that shipping lines must undergo a radical restructuring to survive, arguing that “The way that supply chains have operated over the last number of decades is no longer fit for purpose.”

The company added that container shipping volumes could fall by as much as 2.5 per cent this year. The company’s Asia-Pacific president said, “It wasn’t hard over the last twelve months to make money. If you had something that could float and could carry your container, that was not hard. Now, skills matter.”

The FT has an article on the limits to sail power on cargo vessels with sails reducing fuel consumption by only 8 per cent – not enough to justify the investment.

Methanol may be a better bet. CMA CGM has ordered a dozen methanol-fuelled containerships, increasing the number of such vessels in the French carrier’s order book to eighteen.

The environment

The EU has launched Cleverfood, an initiative it hopes will transform the bloc’s food systems.

Europe’s highest court has ruled that EU laws restricting the use of GM crops do not cover gene editing techniques that are used conventionally and have a long safety record. MIT believes that CRISPR could save crops from devastation by pests.

Going somewhat against the trend, French sugarbeet farmers drove their tractors into Paris to protest an EU ban on the neonicotinoid pesticide.

McKinsey argues that, contrary to what most of us thought, consumers will pay more for sustainable products. The 2023 Ethical Food Global Market Report agrees. It argues that the global ethical food market is growing at 8.9 per cent per year.

India increased its bet on biofuels (as opposed to EVs), rolling out petrol blended with 20 per cent ethanol in eleven states and union territories.

Neither Indonesia nor Malaysia is happy with EU legislation limiting imports of goods linked to deforestation, arguing that the measures will mostly hit small farmers unable to meet the burdensome cost of compliance. Vox writes that palm oil is not that bad (anymore). A view that the FT echoes.

CNN questions whether Arizona has enough water to grow all the pistachio trees that farmers have recently planted.

The New York Times reports that the Chinese are taking factory farming to the next level, with two 26-story buildings under construction on the banks of the Yangtze River. Meanwhile, Spain has become Europe’s largest pork meat producer. The country’s farmers slaughtered 58 million pigs in 2021, up 40 per cent from a decade earlier.

The Guardian argues that we must embrace fake meat to save the planet, but Bloomberg is as negative on lab-grown meat as they are on plant-based meat. Others disagree, arguing that plant-based foods are a small but growing category. But if meat is not your thing, what about plant-based salmon?

The Guardian also has a piece on how California’s farmers are turning cow manure (but not cow burps) into biogas. At the same time, Time Magazine explains why agricultural methane emissions are a challenging area to tackle. The Washington Post has a long read on New Zealand’s methane-emission plans.

Salon lists the crops that climate change will ruin: coffee, corn, wheat, rice, almonds, and citrus. (We will be in trouble if they are right.)

Agriculture continues to attract venture capital inflows, with Responsibility announcing new sustainable food strategies in Asia and South America.

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Ag-Trader News


Brazil’s 2022/2023 summer grain production will exceed the country’s total storage capacity for the first time in 20 years. Farmers will harvest 189.5 million mt of soybeans, corn, and rice in the summer, but the storage capacity is 187.9 million mt. A good winter corn harvest may exacerbate the situation.

NASA calculates that Ukrainian farmers harvested 26.6 million mt of wheat in 2022, down from the previous year’s record harvest of 33 million mt but close to the five-year average of 27.9 million mt. Unfortunately, Ukraine cannot access 22 per cent of that wheat in the eastern part of the country due to the war.

The Ukrainian Grain Association (UGA) expects Ukraine’s grain and oilseed production to drop to 53 million mt in 2023, down from around 65 million mt in 2022 and 106 million mt in 2021. The UGA president said it is no longer profitable for farmers to produce grain.

As of 23rd January, Ukraine had exported 25.45 mln mt of grains and pulses, down 30 per cent on the previous season. Wheat exports amounted to 9.2 mln mt, down 45 per cent on last season. Corn exports amounted to 14.4 mln mt, up 3 per cent on last season.

Inspections of Ukrainian grain ships have slowed to half their peak rate, creating backlogs. Some US and Ukrainian officials accuse Russia of deliberately slowing down checks, which a Russian official denied.

The USDA said Russia’s official wheat production estimate of 104.43 million is “not feasible“. The USDA estimates Russia’s 2022 wheat harvest at 91 million tonnes.

The Indian government will provide three million mt of wheat to bulk consumers, such as flour millers, to cool record-high domestic prices.

Sugar mills in India’s western state of Maharashtra may close early due to poor weather, threatening export volumes, while a plague of rats is decimating sugar cane in Northern Queensland.

The Environment

Germany is considering phasing out biofuels produced from food or animal feed crops by 2030 by progressively reducing the maximum level of biofuel blending. About half of Germany’s total winter rapeseed area of 1.07 million hectares currently goes to biodiesel production.

In a blow to the European sugar beet industry, the Court of Justice of the European Union has ruled that member states can no longer offer exemptions to the bloc’s ban on crop seeds treated with neonicotinoids.

The UK government has ignored the ruling and authorized neonicotinoid pesticide treatments on this year’s sugar beet crop. It explains why here.

The UK government has (at last – phew!) published its plans to support farming post-Brexit. The government will base funding on environmental protection, such as conserving hedgerows and maintaining peatlands. The new incentives, called environmental land management schemes (ELMs), are worth £2.4bn a year for this parliament.

The FT argues that the new rules pose a significant risk to farm finances. The newspaper writes, “So-called “direct payments” from the EU based on land area made up 60 per cent of farm net income before Brexit. At a typical livestock farm, they accounted for the entirety of profits. Now they have been slashed by at least 35 per cent, with more cuts to follow.”

Louis Dreyfus Co. (LDC) has launched the Climate Resilience Prize, a new 100,000 Swiss franc award that supports start-ups working to drive climate resilience in agriculture and food value chains.

A new study questions the environmental benefits of rainforest carbon offsets, arguing that 90 per cent of them are worthless. The study could, however, be flawed and based on wrong assumptions.

Climate change will likely have a negative impact on coffee production, but the BBC explains how you can be a more environmentally friendly coffee drinker. (Spoiler: it involves capsules and pods.)

The FAO wants you to be a food hero to reduce waste.


Rising prices led to a 70 per cent surge in Russia’s fertilizer export revenue. Despite expectations to the contrary, export volumes fell by only ten per cent. Retail fertilizer prices have now fallen to their lowest in 15 months.

BP Bunge announced that they will phase out the use of mineral fertilizers on their sugarcane fields by 2025.

The FT has interviewed the CEO of Yara (the world’s biggest fertilizer manufacturer) on the company’s decarbonization plans.

Researchers continue their quest for alternative fertilizers, including human waste, although Wired Magazine believes that the world is hooked on phosphorous.

Animal protein

Reuters writes that lab-grown meat could become a reality in some US high-end restaurants as early as this year. Due to its cost, it could be a while before it hits supermarket shelves.

Bloomberg has an alternative take on the issue, arguing that alt-meat is just another food fad. The news agency is more optimistic about cow-free dairy products. The FT agrees.

Unsurprisingly, the privately held Impossible Foods disagrees with Bloomberg’s view on alt-meat, arguing that their alt-meat sales continue to grow.  Some believe, however, that plant-based meat’s error may be the exact thing that was supposed to make it popular: Its attempt to be indistinguishable from meat.

Investment is still coming into the sector with the launch of a new $300 million Smart Protein Fund to “back alternative proteins and decarbonize the food industry.”

A professor at Stamford University believes that even if alt-meat proves popular, it will not decarbonize the sector. He says we should instead concentrate on reducing GHG emissions from real meat (and dairy) production. Bill Gates agrees.

Could the dairy farm floating in Rotterdam harbour herald the future of livestock production?

In the meantime, we may already have reached peak real meat consumption.


The Baltic Exchange’s main sea freight index has fallen to its lowest level in two years, dragged down by a dip in Capesize and Panamax rates. Falling shipping costs could be good news for inflation in the future.

MSC and Maersk – the numbers one and two in the global container shipping industry – agreed to end their 2M vessel-sharing alliance effective January 2025.

Maersk, one of the most prominent investors in methanol-fuelled ships, has invested in C1 Green Chemicals to mass-produce green methanol at a competitive price.

Neoline Armateur has launched the long-awaited construction of its first sail-powered cargo vessel. The ship will offer a capacity of up to 5,300 mt of cargo. Click here for more on sail-powered vessels and to watch a cargo ship kite surfing.

Company news

ADM estimates a record fourth-quarter profit in 2022 and predicts another very strong year in 2023. (Click here for an upbeat take on the ADM call.)

CHS and Cargill will expand the export capabilities of their joint venture, TEMCO LLC, with the addition of Cargill’s export grain terminal in Houston, Texas. TEMCO currently operates three facilities in the Pacific Northwest.

The Globe and Mail have a long read on Sucro Can, the new competitor in Canada’s sugar market.

Finally, here is a price graph that will resonate with ag-traders worldwide.

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Ag-Trader News

Türkiye’s President has said that Russia has agreed to ship wheat free of charge to Türkiye to be milled into flour and shipped to poor African countries. The idea was first raised last November when the two countries and the UN extended the Black Sea grain corridor.

Argentina’s drought-hit soybean crop could be the lowest since 2018, but Brazil is heading for bumper harvests in corn and soybeans.

India is harvesting a record wheat crop, up 5 per cent from last season, raising hopes that the government may soon ease export restrictions. Traders already expect the government to ease restrictions on rice exports.

US wheat exports were the lowest in over four decades in 2022 and down 26 per cent compared to 2016-17, the last year the US was the world’s leading wheat exporter.

Malaysia is considering halting palm oil exports to the EU in retaliation for the bloc’s new deforestation regulations. It has already agreed with Indonesia to (try to) work together on the issue.

Heavy rain has led to severe flooding in some areas of California. Virtually none of the storms has reached the Colorado River basin; the drought is not over.  A lack of infrastructure to store and move water means that the rains will not help the state’s almond farmers.

The FAO Food Price Index averaged 143.7 points in 2022, more than 14 per cent above the 2021 average, coming on top of a 28 per cent increase in 2021. US food prices rose 10 per cent in 2022 after a 0.3 per cent increase in December.

Although food inflation has eased, some believe the problem has not disappeared. Markets, however, have different ideas. After all, high prices are the best cure for high prices.

I wonder whether the Economist will one day realise that.


Alphabet (Google to the rest of us) has launched a new subsidiary, Mineral. Its mission is to “help scale sustainable agriculture” by “developing a platform and tools that help gather, organise, and understand never-before known or understood information about the plant world – and make it useful and actionable.”

Wheat provides 20 per cent of global calories – more than any other crop – yet most of it has limited genetic variation, leaving it vulnerable to climate change. Researchers in Mexico hope to correct that situation.

Forbes has an interesting article on how technology will transform the way that agriculture is financed. The magazine cites how various companies provide climate insurance to small farmers in developing countries.

The BBC joins the growing chorus questioning the potential for vertical farming, writing that the challenge is to keep energy use down when the alternative – growing outside – comes with free sunlight and rainwater.

John Deere has agreed to let its US customers fix their equipment.

Will lab-grown meat technology be one of the food trends to shape 2023? I am not convinced, but this article believes it will be.

Bill Gates (one of the largest owners of US farmland) is bullish alt-meat products and believes that “they will eventually be very good.”

The bee population has been declining for several years, but several companies are working to find a solution.

During the First World War, scientists discovered that certain types of yeast can produce oily lipids. National Geographic writes that it may compete with vegetable and palm oils.


Cargill has joined forces with Mitsui & Co to order two methanol-fuelled bulk carriers with delivery scheduled in the first quarter of 2026.

Taiwan’s Evergreen Marine Corp. is celebrating a record year by awarding year-end bonuses equal to more than four years’ pay, on average. I wonder whether the captain of the company’s Ever Given ship – the one that ran aground in the Suez Canal – will receive one.

Ironically, the M/V Glory, a cargo vessel carrying Ukrainian grain, briefly ran aground in the Suez Canal before being refloated and towed away.

The Guardian kindly (and bizarrely) provides a step-by-step guide to what to do when a big ship sinks.

Customs officers at the port of Antwerp and Rotterdam seized a record 160 mt of cocaine in 2022. We guess they found most of it in containers.


A new study suggests that a baking technology introduced in the 1980s to reduce fermentation times may cause the rising incidence of gluten intolerance.

Vox raises the issue of antibiotics used in livestock farming, while Yahoo resuscitates an old study that finds eating lentils could add ten years to your life. (Spoiler: You must eat a lot of them.)

Finally, three environmental groups are taking Danone, the company behind Evian and Volvic mineral water, to court for allegedly failing to reduce its plastic footprint. Perhaps the company could transform its waste plastic into a soil additive.

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PS Following reader feedback, I will send this report twice a month on alternate Mondays to the interviews.

© Commodity Conversations ® 2023

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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Media Monitor

US consumer prices in November were up 7.1 per cent from a year ago, compared to an annual increase of 7.7 per cent the month before. US grocery prices rose 0.5 per cent in November, led by an 8.9 per cent jump in the price of lettuce. The cost of eggs was up 49.1 per cent from a year earlier.

China’s farmers have shrugged off droughts, floods, and Covid hurdles to produce a record 686.53 million mt of cereals, up 0.5 per cent over 2021. It is the eighth straight year that China has produced more than 650 million mt.

India’s wheat reserves in state stores totalled 19 million mt at the start of December, down from 37.85 million mt in 2021 and the lowest in six years. Meanwhile, India’s livestock producers have called on their government to restrict corn exports to ensure sufficient poultry feed supplies.

EU cereal production should rise next year after a poor 2022 harvest. Strategie Grains forecasts soft wheat production at 128.7 million mt, up from 125.5 million this year. It estimates corn output at 63.7 million mt, up 26 per cent from a 15-year low in 2022, and barley production at 52.5 million mt, up 2.5 per cent this year.

Belarus said it would allow, without preconditions, the transit of grain from Ukraine through its territory for export from Lithuanian ports.

The UN says that 200,000 Somalis are suffering catastrophic food shortages, and many are dying of hunger, with that number expected to rise to over 700,000 next year. A long-running Islamist insurgency has compounded the problem and hampered humanitarian access to some areas.

The Conversation argues that colonial food production systems are the root of Africa’s problems, leaving Africa’s poorest people exposed, and vulnerable to climatic variability and economic shocks.

As many as 828 million people faced hunger in 2021, an increase of 150 million more people since 2019. There is enough food to feed everyone in the world today. What is lacking is the capacity to buy food that is available because of high levels of poverty and inequalities.

In 2019, the US wasted 80.6 million mt of food across all sectors, 35 per cent of the total food supply. More than one-third of that waste occurred in homes.

Meat consumption in Brazil fell sharply this year due to rising prices and health concerns. More than 90 per cent of Brazilians say they won’t return to their past meat-eating habits.

Slaughter-free meat may provide an alternative, but companies must prove they can scale up to reduce costs. Israel’s Believer Meats, known formerly as Future Meat, believe they can with their new facility under construction in the US. Equinom, another Israeli company, is concentrating on developing pea varieties for their plant-based meat products.

Could insects soon be on the menu? Adult crickets are 65 per cent protein by weight, higher than beef (23 per cent) and tofu (8 per cent).

If you struggle with which proteins have the least carbon emissions, this BBC article may help. It doesn’t include insects, but I was surprised to learn that cheese, not chicken or pork, generates the third-highest agricultural emissions, after lamb and beef.

The Netherlands, the world’s second-largest exporter of agricultural products (by value), may have to reduce livestock numbers by a third over the next eight years to halve the country’s total emissions by 2030.

In company news, Bunge Ltd will invest about $550 million to build a soy protein concentrate facility in Indiana to cater to the rising demand for plant-based food products and processed meats. The new facility will process 4.5 million bushels of soybeans annually. Construction will start in the first quarter of 2023, and the plant will be commissioned by mid-2025.

Bunge also announced it is moving its place of incorporation from Bermuda to Switzerland. Bunge’s operational headquarters will remain in St. Louis, Missouri, US.

Nestlé announced it would invest CHF 40 million in a new production site in Smolyhiv in the western part of Ukraine. The factory will employ 1,500 people and supply both Ukrainian and export markets with cold sauces, seasonings, soups, and instant food.

Meanwhile, Fonterra and Nestlé have sold their joint-venture dairy assets in Brazil owned to Lactalis for BRL700m (US$131.5m).

Cargill will donate $14 million over the next three years in its partnership with CARE to empower women in agricultural communities. Cargill and CARE have collaborated for over 60 years on the issue.

Louis Dreyfus Company (LDC) has created a food and feed solutions business line that will focus on developing the company’s presence in the lecithin, glycerine and speciality feed protein areas.

Unilever may sell a portion of its US ice cream portfolio valued at as much as $3 billion. The international labels Magnum and Ben & Jerry’s are not included.

Finally, a new report confirms what we all knew: higher prices – and not increased production – are the only way to lift cocoa farmers out of poverty. However, some good news for the world’s cocoa producers: analysts expect chocolate demand to recover to per-Covid levels this Christmas.

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