![\"\"](\"https:\/\/i0.wp.com\/commodityconversations.com\/wordpress2\/wp-content\/uploads\/2021\/12\/cropped-cropped-SM_002.jpg?resize=525%2C276&ssl=1\")
<\/p>\n<\/p>\n
Viterra<\/a> has announced it will acquire the Gavilon grains and ingredients (but not its fertiliser) business from Marubeni for $1.13 billion plus working capital. Marubeni bought Gavilon for $2.7 billion in 2013 expects to get as much as $3.51 billion from the sale. The FT wonders whether it will lead Viterra to IPO<\/a> while Javier Blas gives his take on the acquisition here<\/a>.<\/p>\n Agricultural commodity traders are worried about a Russian invasion of Ukraine. Agweb has a couple of articles on what conflict<\/a> might mean for world markets<\/a>. Bloomberg looks at how Russia\u2019s past actions<\/a> have impacted trade flows and how an invasion might restrict trade. It also looks at how India is diversifying sunflower oil<\/a> imports away from Ukraine, their biggest supplier. Meanwhile, Ukrainian corn has been going as far afield<\/a> as Indonesia.<\/p>\n Agricensus looks at what might happen to Russia\u2019s grain exports if the world cuts the country off from the SWIFT payment<\/a> system. Any disruptions to Russian exports could prove a boon for French wheat exporters<\/a> who have been losing export share to Russia.<\/p>\n There are no signs that India\u2019s vegoil appetite<\/a> will fall anytime soon. Domestic consumption should climb by as much as 17 per cent over the next four years.<\/p>\n Conflict could lead to higher food prices. A researcher at Mintec<\/a> tells Bloomberg she sees agricultural commodity prices beginning to peak and likely retreating<\/a> into the second half of 2022. Still, it could take until at least 2023 before consumers feel the benefit. Reuters also thinks we may have to wait for 2023<\/a> for prices to ease.<\/p>\n Insurance payments to US farmers<\/a> due to drought rose more than 400 per cent between 1995 and 2020 to $1.65 billion, while payments due to excess moisture rose nearly 300 per cent to $2.61 billion. The federal government pays about 60 per cent<\/a> of the nation\u2019s crop insurance premiums through taxpayer subsidies.<\/p>\n Brazil’s Parana State estimates its 2021\/22 soybean crop at 12.83 million tonnes<\/a>, down 35 per cent from 2020\/21 and below a previous projection of 18.4 million tonnes, due to low rainfall and high temperatures provoked by La Nina. The weather phenomenon has also led South Africa\u2019s farmers<\/a> to plant less acreage after record rainfall curtailed sowings.<\/p>\n Farmers in Brazil, Argentina and the US are holding back crop sales<\/a> in expectation of higher prices. The three countries account for more than three-quarters<\/a> of global corn and soybean exports.<\/p>\n But it is not just food prices that are soaring. Cotton has hit new ten-year highs<\/a> for the fourth time in five months.<\/p>\n CNN worries that rising food prices are hurting<\/a> those that can least afford them and calls for the US Fed to raise interest rates to dampen inflation expectations.<\/p>\n Higher interest rates won\u2019t solve the labour shortage in Malaysia\u2019s palm oil<\/a> sector, where output has fallen to a five-year low. Foreign workers make up around 85 per cent of the labour force on plantations.<\/p>\n Thailand\u2019s government is concerned about the impact that higher palm oil prices will have on the country\u2019s consumers<\/a> while recognising the benefits accruing to farmers. Higher palm oil prices may spur the search for alternatives<\/a>.<\/p>\n China Dialogue has a well-presented feature on palm oil sustainability<\/a>, focusing on Wilmar and the RSPO. Reuters has a long-read on sustainable palm oil<\/a> in Malaysia’s eastern state of Sabah. Swiss researchers have published the results of the OPAL Project<\/a>, a six-year study into sustainable palm oil. The study focused on three oil palm growing countries<\/a>: Cameroon, Colombia, and Indonesia.<\/p>\n Fox News worries that high US fertiliser prices<\/a> will reduce production this season. They write that a fertiliser bag that cost $11 in 2021 now sells for about $20. However, US wholesale fertiliser prices have fallen to levels<\/a> last seen last October. Things could change quickly if the world imposes sanctions<\/a> on Russia, a significant nitrogen, phosphorus, and potash exporter.<\/p>\n India will allocate about 3 trillion rupees ($40 billion) on food and fertiliser subsidies<\/a> in its budget for 2022\/23, roughly the same amount as in the fiscal year 2021\/22 ending March.<\/p>\n Kula Bio, a Boston-based start-up, has raised $50 million to accelerate production for their next-generation nitrogen fertiliser<\/a> that uses bacteria to remove nitrogen from the air and deposit it in soil.<\/p>\n In little-reported news, Sri Lanka\u2019s government will give about $200 million in compensation<\/a> to the country\u2019s rice farmers whose crops failed under a botched scheme to establish the world\u2019s first 100-per cent organic farming nation. The government last year banned imports of agricultural chemicals leading to about a third of Sri Lanka\u2019s agricultural land being left dormant. The government reversed the ban last October.<\/p>\n Canada\u2019s cattle ranchers continue to struggle to feed their herds<\/a> due to the country\u2019s recent drought-reduced grain crop, Covid-related restrictions on US truck shipments and capacity restraints on rail movements. There was another flurry of anti-meat articles last week, with this one summarising the environmental arguments<\/a> for going vegan.<\/p>\n A new report in the Journal of Ecological Society<\/a> argues that animal agriculture is responsible for at least 87 per cent of greenhouse gas emissions. It says that earlier studies have underestimated<\/a> the environmental impact of livestock farming and have failed to include the negative impact of forests lost to animal agriculture.<\/p>\n Greenpeace Brazil reports that up to 80 per cent of deforestation<\/a> in the Amazon rainforest is due to cattle ranching. Storebrand, a $120bn Nordic asset manager, has placed ADM and Bunge on its \u201cobservation list<\/a>\u201d for moving too slowly to eliminate deforestation risk from their supply chains.<\/p>\n Human Rights Watch has written an open letter asking the EU Commission to include land rights<\/a> in their upcoming regulations restricting imports of any commodities that have contributed to deforestation.<\/p>\n The Economist posted a video on LinkedIn<\/a> about alternative meat, but the FT wonders whether the demand for alt-meat has peaked<\/a>. After a 46 per cent rise in 2020, US sales of plant-based meat fell 0.5 per cent in 2021.<\/p>\n The Chinese government has released its official Five-Year Agricultural Plan (in mandarin<\/a>). It mentions cultivated meat for the first time and suggests that producing it<\/a> is in the national interest.<\/p>\n The EU has implemented a ban on giving antibiotics<\/a> to healthy animals. The Guardian is upset<\/a> that the UK has not done the same.<\/p>\n A new study<\/a> finds that climate change will make it harder for farmers to grow coffee, cashew, and avocado. CNN is particularly concerned about what that might mean for coffee lovers<\/a>. You can find the BBC\u2019s take on the report here<\/a>.<\/p>\n China has published draft rules<\/a> for gene-edited plants. It could now take only a year or two to get approval for a gene-edited plant compared with around six years for GM ones. Last November, Beijing passed new regulations<\/a> for genetically modified (GM)crops.<\/p>\n Nestl\u00e9 has announced a major \u2013 perhaps game-changing – initiative<\/a> in cocoa sourcing. The company will triple its cocoa sustainability funding to $1.4 billion over eight years, including direct pay-outs to African cocoa farmers to remove child labour from its supply chain.<\/p>\n ADM reported a record fourth-quarter profit<\/a> and said it would continue to benefit from solid demand for crops and biofuel in 2022. ADM’s net earnings rose to $782 million in the quarter ended Dec. 31, up from $687 million a year earlier. (You can access the earnings call deck here<\/a>.)<\/p>\n Walmart is investing in the vertical farming start-up Plenty<\/a> and will start carrying its leafy greens in all California stores this year. The investment is part of a $400 million funding<\/a> round.<\/p>\n In shipping news, MSC, the world\u2019s largest container-shipping company, is looking to buy ITA Airways<\/a>, the successor to the defunct Alitalia. The transaction would have a value of between 1.2 and 1.5 billion euros. Lufthansa would act as an industrial partner.<\/p>\n Maersk has announced plans to launch an offshore vessel-charging company<\/a> to support the maritime industry\u2019s decarbonisation efforts by eliminating idle emissions. A project for decarbonised shipping is gearing up to introduce the world\u2019s first ammonia-powered ship<\/a>.<\/p>\n Lastly, if you are reading this before taking an afternoon nap<\/a>, have a coffee first.<\/p>\n \u00a9 Commodity Conversations \u00ae 2022<\/p>\n Many of the above links require subscriptions. Please support quality journalism.<\/p>\n![\"\"](\"https:\/\/i0.wp.com\/commodityconversations.com\/wordpress2\/wp-content\/uploads\/2022\/01\/Image-28.01.22-at-11.41.jpeg?resize=525%2C65&ssl=1\")
<\/a><\/p>\n
![\"\"](\"https:\/\/i0.wp.com\/commodityconversations.com\/wordpress2\/wp-content\/uploads\/2022\/01\/Image-28.01.22-at-11.41-1.jpeg?resize=525%2C66&ssl=1\")
<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"