{"id":7313,"date":"2022-03-28T20:12:52","date_gmt":"2022-03-28T20:12:52","guid":{"rendered":"http:\/\/commodityconversations.com\/wordpress2\/?p=7313"},"modified":"2022-03-28T20:12:52","modified_gmt":"2022-03-28T20:12:52","slug":"commodity-conversations-news-monitor-23","status":"publish","type":"post","link":"https:\/\/commodityconversations.com\/wordpress2\/2022\/03\/28\/commodity-conversations-news-monitor-23\/","title":{"rendered":"Commodity Conversations News Monitor"},"content":{"rendered":"

Ukraine\u2019s agriculture minister has said Ukraine\u2019s ability to export grains<\/a> was getting worse by the day and would only improve if the war with Russia ended. The country faces a possible grain revenue loss of $6 billion<\/a> as the blockade of its ports prevents it from shipping wheat and corn earmarked for export by June. Unfortunately, damage to port facilities<\/a> may mean that it will take a long time before shipments recover.<\/p>\n

The fighting could lead to Ukraine planting only half of its usual sunflower crop<\/a>. \u00a0Some analysts expect the country to sow 3.5 to 4 million hectares of the oilseed this spring, down from 6.8 million last year. Others are even more pessimistic.<\/p>\n

US farmers have asked the USDA to allow them to plant on 4 million acres<\/a> of \u201cprime farmland\u201d currently enrolled in the Farm Service Agency\u2019s Conservation Reserve Program (CRP) to help compensate for the loss of Ukrainian corn, wheat and sunflower oil.<\/p>\n

The EU has proposed a 1.5-billion-euro funding package for farmers<\/a> to plant crops on almost 4 million hectares of fallow land. Ireland\u2019s government has already approved a payment of \u20ac400 per hectare<\/a> to encourage farmers to grow barley, wheat, and oats. Meanwhile, an environmental lobby group<\/a> has called for the EU to suspend its mandates for crop-based biofuels<\/a>.<\/p>\n

The European Commission has delayed the publication<\/a> of its proposals on sustainable farming as the Ukraine crisis does not allow the \u201cpolitical space\u201d for a proper discussion now.<\/p>\n

The head of the WTO has warned countries<\/a> against restricting food exports, arguing that it will only exacerbate the situation. She said that countries with surplus vegetable oils and grains stocks should release them on world markets.<\/p>\n

When Vietnam, India, China, and Cambodia imposed export bans on rice in 2008, prices soared to about $1,100 per tonne from about $480. Rice currently trades at about $405 per tonne, down from $410 before Russia invaded Ukraine. Bloomberg argues<\/a> that rice prices need to stay where they are if the world is to avoid a full-blown food emergency.<\/p>\n

India could limit sugar exports<\/a> to 8 million tonnes this season to prevent a surge in domestic prices. Mills have so far signed contracts to export 7 million tonnes.<\/p>\n

China\u2019s agriculture minister has said that \u201cChina faces big difficulties in food production because of the unusual floods last autumn<\/a>.\u201d<\/p>\n

Nestle will stop selling a wide range of brands in Russia<\/a> after the Ukrainian President criticised the company. Nestl\u00e9 said that the products make up the \u201cvast majority of volume and sales\u201d Russia. The FT writes<\/a> that the war in Ukraine presents Nestl\u00e9 with some difficult choices. The Minnesota Reformer feels that \u201cCargill should pull out of Russia<\/a>.\u201d<\/p>\n

Spiking commodity prices and subsequent margin calls leave some trading firms short of liquidity<\/a> and searching for additional financing. At last week\u2019s FT Commodity Conference, traders warned that financial stress could lead to consolidation<\/a> in the sector.<\/p>\n

In an article on rising fertiliser prices, the FT calls for a reduction in financial speculation<\/a> in commodities, arguing that derivatives trading plays a significant role in food and fuel inflation. However, in this article on the merits of investing in agricultural commodities<\/a>, the newspaper writes that after the last grain price surge in 2007-8, a report from the FAO<\/a> found: \u201cAvailable empirical evidence does not support claims that non-commercial traders have increased the volatility of grain prices.\u201d<\/p>\n

The CEO of Yara, a major Norwegian fertiliser producer,<\/a> told the WSJ, \u201cWe will have a food crisis. It\u2019s a question of how large.\u201d Brazilian farmers have been caught off guard<\/a> by soaring fertiliser prices, with only 28 per cent of their needs for the second half of this year bought by the end of February.<\/p>\n

The world\u2019s small scale coffee farmers<\/a> are already facing a \u201ccrisis\u201d because of the fertiliser shortage. Meanwhile, a container shortage is leading some Brazilian coffee producers<\/a> to export their beans in bags in break-bulk vessels.<\/p>\n

Nigeria\u2019s Dangote Group has opened a $2.5 billion fertiliser plant<\/a> at the Lekki Free Zone in Lagos State. The plant is designed to produce 3 million tonnes of urea per year and supply all the major markets in sub-Saharan Africa. The company will also export to Brazil, the US, India, and Mexico.<\/p>\n

Olam Group has agreed to sell 35.4 per cent of Olam Agri Holdings<\/a> to Saudi Agricultural and Livestock Investment Co. (SALIC) for $1.24 billion. The deal values Olam Agri at $3.5 billion.<\/p>\n

ADQ, an Abu Dhabi wealth fund<\/a>, is acquiring Egypt state-held stakes in Abou Kir Fertilizers & Chemical Industries, Misr Fertilizers Production Co. and Alexandria Container & Cargo Handling Co. as part of a roughly $2 billion investment in the country.<\/p>\n

Qatar and the Gates Foundation will invest up to $200 million<\/a> over the next two years to help farmers adapt to climate change. Recent climate models warn that climate change will result in a dramatic drop<\/a> in agricultural yields.<\/p>\n

Unilever is piloting Green Token, SAP blockchain technology, to increase transparency in their palm oil supply chain<\/a>. The company has already used the technology to source 188,000 tonnes of palm oil from Indonesia.<\/p>\n

Finally, this writer argues that we should stop growing wheat<\/a> and eat beef instead. (Well, everyone is entitled to their opinion.)<\/p>\n

\u00a9 Commodity Conversations \u00ae 2022<\/p>\n

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Ukraine\u2019s agriculture minister has said Ukraine\u2019s ability to export grains was getting worse by the day and would only improve if the war with Russia ended. The country faces a possible grain revenue loss of $6 billion as the blockade of its ports prevents it from shipping wheat and corn earmarked for export by June. … <\/p>\n

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