{"id":7609,"date":"2022-05-16T02:53:15","date_gmt":"2022-05-16T02:53:15","guid":{"rendered":"http:\/\/commodityconversations.com\/wordpress2\/?p=7609"},"modified":"2022-05-16T06:06:41","modified_gmt":"2022-05-16T06:06:41","slug":"commodity-conversations-news-monitor-28","status":"publish","type":"post","link":"https:\/\/commodityconversations.com\/wordpress2\/2022\/05\/16\/commodity-conversations-news-monitor-28\/","title":{"rendered":"Commodity Conversations News Monitor"},"content":{"rendered":"

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In a shock move that may lead to panic<\/a> in the markets, India, the world’s second-biggest wheat producer,<\/span>\u00a0<\/span>\u00a0has <\/span>banned wheat exports<\/a> with immediate effect. The ban excludes exports which already have a letter of credit opened against them but includes forward sales, leaving exporters no choice but to declare force majeure on later shipments. The directive gives the government some wiggle room by hinting government-to-government sales may still be allowed. Meanwhile, the early arrival<\/a> of monsoon rains could provide farmers with some relief.<\/span><\/p>\n

India exported a record seven mln mt in fiscal 2021-22 and a record 1.4 mln mt in April<\/a>, the first month of the 2022-23 fiscal year. Traders have already contracted to export 4.5 mln in 2022-23, and the country had earlier targeted to export a record ten mln mt in 2022-23.<\/p>\n

In their latest WASDE<\/a> report, the USDA had pencilled in India to export 8.5 mln mt. The agency forecasts<\/a> 2022-23 global wheat production at 774.8 mln mt, the first decline since the 2018-19 season, and stocks at 267 mln mt, the lowest level in six years. It expects the US winter wheat shortfall<\/a> could be more severe than previously believed and that the country\u2019s wheat exports could be the lowest since 1971\/72<\/p>\n

The USDA puts Russian production<\/a> at 80 mln mt, up from 75 mln mt last year, with exports at 39 mln mt, up from 33 million mt. It predicts (guesses) Ukrainian production at 20.5 million mt, 11.5 million lower than in 2021\/22 and puts exports at 10 million mt, down from 19 million. Many traders believe that even ten mln mt of exports would prove too high.<\/p>\n

The Chinese government is cracking down on the illegal destruction<\/a> of wheat crops for construction sites and silage for animal feed.\u00a0 An analyst told Bloomberg<\/span> that g<\/span>iven the <\/span>poor conditions<\/a> of the crop, it isn\u2019t surprising that farmers are cutting the wheat for hay as it may offer a better return than grain.<\/span><\/p>\n

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A drought threatens the wheat harvest in France,<\/a> where the first quarter of this year was among the ten driest winter periods<\/a> on record for some regions. The one bright spot for wheat is in the Canadian Prairies, where wet conditions<\/a> are delaying crop planting of corn and soybean and may increase wheat acreage.<\/p>\n

The European Investment Bank (EIB) has said that Ukraine has \u20ac8bn worth of wheat<\/a> from last year’s harvest that they can\u2019t export. An EIB spokesman said, “They are sowing like crazy right now, and they will expect probably a good harvest, maybe 70 per cent of last year’s harvest, in a couple of months – and then what to do with it?\u201d<\/p>\n

The European Bank for Reconstruction and Development (EBRD) is considering financial support for Ukraine’s transport and logistics<\/a> companies to help them maintain their exports. Ukraine last week formally closed its four Black Sea and Azov Sea ports, which Russian forces have captured, leaving land routes through neighbouring countries as its only export option.<\/p>\n

Ukraine\u2019s president has called for the end of the naval blockade<\/a> of the country\u2019s ports to allow wheat shipments.<\/p>\n

The EU is exploring ways<\/a> of getting around Russia’s Black Sea blockade by taking the overland route via EU roads and railways<\/a>. Canada has also offered<\/a> to help, but transporting Ukrainian grain by land into Europe<\/a> can be difficult. The port of Constanta<\/a> in Rumania is doing its bit, but in the meantime, the Russians are stealing<\/a> Ukrainian grain and exporting it as their own.<\/p>\n

Malaysian palm oil exports surged 40 per cent<\/a> in the first ten days of May compared with the same period during the previous month after Indonesia imposed an export ban. The ban gives Malaysian palm oil an edge,<\/a> and the government is considering cutting its export tax<\/a> on palm oil. It also plans to slow the implementation of its biodiesel mandate.<\/p>\n

Despite the export ban, Indonesian consumers complain<\/a> that their domestic vegoil prices haven\u2019t fallen. Indonesian customs officials have impounded<\/a> eight shipping containers of cooking oil at Tanjung Perak port bound for East Timor. Those found guilty of breaching the cooking oil export ban could face five years of prison and a fine of up to 5 billion rupiahs ($341,997).<\/p>\n

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The FT writes that food nationalism<\/a> is fuelling global inflation and hunger amid warnings<\/a> of social unrest in Africa, where processed food manufacturers are substituting<\/a> wheat with manioc flour and sorghum. The Guardian suggests cassava<\/a> could be the best alternative.<\/p>\n

The Ivory Coast is asking for $1.5 billion in private investment to restore degraded forests and increase<\/a> food production. Meanwhile, the price of chilli<\/a> sauce is rising steeply in Ghana.<\/p>\n

Cotton<\/a> prices also headed higher on world markets on fears of an Indian export ban and dry weather in the US.<\/p>\n

US egg prices rocketed<\/a> by 23 per cent between March and April as the country\u2019s worst-ever outbreak of bird flu killed more than 37 million chickens and turkeys.<\/p>\n

UK poultry producers warn that chicken could soon cost as much as beef<\/a> due to the rising price of feed, and UK consumers are suffering<\/a>. The Food Foundation reports<\/a> almost 10 million Britons cut back on food or missed meals last month. (Ecowatch has published a timely guide<\/a> on foraging food from the wild rather than buying it in a supermarket.)<\/p>\n

There is some optimistic news from Australia, where researchers have identified a genetic driver in wheat that could increase<\/a> protein content by up to 25 per cent.<\/p>\n

Finally, the World Bank has published a book entitled Commodity Markets \u2013 Evolutions, Challenges & Policies<\/em>. I haven\u2019t read it yet, but you can download it here<\/a>.<\/p>\n

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

Many of the above links require subscriptions. Please support quality journalism.<\/p>\n

\"\"<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

In a shock move that may lead to panic in the markets, India, the world’s second-biggest wheat producer,\u00a0\u00a0has banned wheat exports with immediate effect. The ban excludes exports which already have a letter of credit opened against them but includes forward sales, leaving exporters no choice but to declare force majeure on later shipments. The … <\/p>\n

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