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The UN has warned that Russia\u2019s invasion of Ukraine<\/a> could trigger global famine, as Moscow\u2019s Black Sea blockade delays crucial grain exports, stoking fears of a deepening hunger crisis in countries such as Yemen and Ethiopia.<\/p>\n The crisis is already leading to panic buying in Europe,<\/a> with shoppers emptying shelves of pasta and flour.<\/p>\n Prices of unsubsidised bread in Egypt<\/a> have increased by 25 per cent in the last three weeks, provoking hunger and fears of social unrest. Wheat shortages led to unrest in 2008 when the leading chant of the uprising was “Bread, freedom and social justice”.<\/p>\n India hopes to fill some of the global wheat shortage<\/a>. Exports increased to 6.12 million tonnes last year from 1.12 million tonnes a year earlier. The government recently introduced incentives that could result in 10 million tonnes of wheat exported this season.<\/p>\n The surge in wheat and corn prices is boosting demand for low-grade rice<\/a> for animal feed in Asia. Chinese buyers are looking to buy extra volumes of broken rice to fatten hogs and other animals. China is meanwhile ramping up corn purchases<\/a> from the US. China\u2019s Global Times quotes Chinese experts saying that the country\u2019s domestic supply of soybeans<\/a> is guaranteed despite the events in the international market. The USDA, meanwhile, estimates that China will import a record 100 mln mt of soybeans<\/a> in 2022\/23.<\/p>\n Russia has temporarily banned grain exports to ex-Soviet countries<\/a> until the end of June – and most sugar exports until the end of August – but will keep providing special export licences to traders within its current quota. The country still has 6 million to 6.5 mln mt of wheat<\/a> to export under the quota, and the various announcements caused some confusion<\/a> in the market.<\/p>\n The Russian invasion leaves Ukraine facing its most challenging planting campaign<\/a> in history, although farmers in the west of the country<\/a> still hope to increase planted area. Ukraine\u2019s agriculture exporters are turning to barter<\/a> after multinational traders evacuated their staff and stopped making payments.<\/p>\n Argentina has halted the registration<\/a> of export sales of soy oil and meal ahead of a likely increase in export taxes.<\/p>\n Indonesia has removed restrictions on palm oil export volumes<\/a> but has raised the maximum export levy to $375 a tonne, up from $175 per tonne previously.<\/p>\n Fertiliser prices continue to surge,<\/a> with the Green Markets North American Fertilizer Index hitting a new high. Prices for urea in New Orleans also reached record levels while an index for potash in Brazil rocketed a record 34 per cent.<\/p>\n The massive fertiliser rally has created a rift<\/a> between the world\u2019s agricultural superpowers over whether Russian supplies should be sanctioned. Brazil argues for keeping crop nutrients sanction-free, while the US prefers increasing the pressure<\/a> on Russia. Russia accounted for almost a fifth<\/a> of the world\u2019s fertiliser exports in 2021.<\/p>\n India is boosting fertiliser imports<\/a> from Canada and Israel to ensure supplies. The country\u2019s fertiliser minister told Reuters, “We need about 30 mln mt of fertilisers, and arrangements are in place.\u201d<\/p>\n An editorial in the Bangkok Post calls for Thailand\u2019s government to reduce its fertiliser dependence<\/a> and shift to organic farming.<\/p>\n The Canadian fertiliser company Nutrien will boost potash production<\/a> by about one mln mt in 2022 to 15 mln mt, with most of the additional volume coming in the second half of the year. The company said it couldn’t produce more than that in 2022 \u2014 even if the market needed it.<\/p>\n Bayer, a leading seed and crop treatment supplier is considering halting the sale of farming inputs<\/a> to Russia. The company has already supplied the country for this year.<\/p>\n A new paper<\/a> argues that parts of the American West may be entering a \u201cperpetual drought<\/a>.\u201d However, a wetter than usual spring<\/a> in the northern US Plains and Canadian Prairies could help the wheat crop there. The lingering La Nina may prolong and exacerbate the drought in the US Southern Plains,<\/a> where the country’s hard red winter wheat is grown. Some 60 per cent of the region is in the grips of drought.<\/p>\n After Europe\u2019s energy traders appealed to governments<\/a> for financial assistance, Bloomberg has run a series of articles wondering whether rising commodity prices will lead to a financial meltdown<\/a>. The agency asks whether commodity traders are too big to fall<\/a> (this blog<\/a> argues that they are not) and questions whether governments should help traders finance their margin calls. The news agency argues that trading companies should first tap private sources, including their shareholders<\/a>. A lack of liquidity<\/a> in the primary commodity markets makes the situation even more challenging.<\/p>\n Ukrainian Prime Minister has urged Nestle to rethink the company\u2019s decision<\/a> to continue some operations in Russia. Nestle has suspended shipments of non-essential products but is still supplying necessities such as baby and pet food.<\/p>\n Maersk has halted new container bookings<\/a> to and from Russia but still has vessels calling at Russian ports to deliver containers booked before the invasion and pick up around 50,000 containers stranded in Russia. Maersk\u2019s CEO told Bloomberg<\/a> that exiting Russia will be \u201cexpensive\u201d but makes sense because the country\u2019s economy won\u2019t grow \u201cfor a very long time.\u201d He added, \u201cIt\u2019s a decision based on morals, but it\u2019s also a financially sound decision in the longer term.\u201d<\/p>\n Maersk has joined the Climate Pledge<\/a>, an environmental initiative whose signatories commit to fully decarbonise their operations by 2040. Maersk is the first large shipping company to join the programme.<\/p>\n In other company news, Louis Dreyfus has created a new plant proteins business<\/a> as part of their plans to move further downstream and diversify revenue through more value-added products.<\/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\")
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