Soybeans, Meat (real and fake), Sunflowers, Banned GMOs, Gas Prices, and Carbon Farming!
[September 30th, 2020]
This week, we look into India’s soybean output as the country continues to depend on soymeal imports, how Uruguay is expanding meat exports to Japan and South Korea while plant-based meats are hit with price spikes. We will also look at the sunflower price rise in Bulgaria, Kenya’s continued ban on GMO products, the surge in natural gas prices, and Cargill’s ESG plan to launch a carbon farming program.
India’s Soybean Output
The world’s largest importer of soybean oil, India, is expected to have limited crop yields next month due to poor weather that has affected the planting period. The usual planting period takes place in June-July, with the harvest expected in October.
According to Hellenic Shipping News, a poor crop will increase India’s dependence on edible oil imports as well as soybean meal, which India usually exports. In the 2020-21 season, India harvested 12.9 million tons, whereas the 2021-22 season is expected to yield approximately 10.8 million tons.
India’s soybean oil imports are projected to be 3.3 million tons in the 2021-22 season compared to the 2.4 million tons imported between November and August.
India’s National Commodity and Derivatives Exchange quoted high protein soybean meal at $1,265 per metric ton by September 15th, which is more than double the price level from last year.
Uruguay Expands Meat Sales Business To Japan and South Korea
Meat sales of Uruguayan meat to Japan have seen a 72% rise compared to the $24 million in sales in 2020, and these are set to continue due to Uruguay meat shipments only accounting for 1% of Japan’s beef imports.
According to MercoPress, Japan pays a premium for Uruguayan meat with a ton at $4,719 compared to $4,100 for deliveries to the rest of the world, with Japan ranked third largest meat importer with the per capita consumption at 10 kg per year.
South Korea has also become a target market for Uruguayan meat as it ranks as the fourth-largest meat importer. The South American country has a disadvantage as it does not have favorable trading agreements like the United States and Australia.
Shortage Of Pea Proteins Produce Price Spikes In Plant-Based Meats
Peas are set to see a drastic increase in its price as severe drought is expected in Canada which will also affect availability to the plant-based food industry.
The Financial Times reports on how the price for peas in Canada has more than doubled after the country’s worst drought in over a century to over $450 per ton compared to $270 per ton at the beginning of 2021.
Peas are seen as a more sustainable product compared to soybeans that have been linked to deforestation in large parts of Brazil. Large companies that include Beyond Meat, Tyson, and Nestlé have all started using peas as a key ingredient for their plant-based meat products.
Sunflower Prices In Bulgaria Rise By 7% In A Week
The price of sunflower in Bulgaria has increased over the past week more than 7% from $580-585 per metric ton to $620 per metric ton, as there has been low supply from farmers forcing some crushers to halt operations.
According to AgriCensus, the price increased despite the region expecting a bigger sunflower harvest, with Bulgaria’s production expected to reach 1.92 million metric tons and Romania’s at 3.36 million metric tons.
The low intake in the local crop forces the importation from Moldova and Romania, which is currently $10-20 per metric ton cheaper. If this pricing remains as we move into the new harvest, Bulgaria can expect up to 500,000 metric tons of imports from both Moldova and Romania for the next full season.
Kenyan Authorities Rule Out GMO Maize Imports To Tame Cost Of Animal Feeds
The government of Kenya has ruled out the possibility of allowing GMO yellow maize to be imported to address the rising animal feed prices in the country after requests from millers.
According to Business Daily Africa, the feed manufacturers petitioned the government to allow duty-free importation of GMO yellow maize and soybeans to ease the current historic price of soybeans offered at up to $800 per ton.
The government’s position is that the ban on importing GMO crops remains and that only a committee looking at the current food price can decide after the safety measures have been considered. The ban on GMO products in Kenya came into force in 2012 by the Ministry of Health despite scientists arguing for it to be removed for the country to avoid the current spikes in food and feed prices.
Natural-Gas Prices Surge And Winter Is Still Months Away
According to The Wall Street Journal, natural gas prices have seen an increase as USSS futures reach $5.105 per million British thermal units, which signifies double the price they were six months ago and a 17% increase this month alone.
The high prices have been caused by the increase in demand, despite the fact that this time of year would usually be the off-season, and this price level has not been seen since the 2014 blizzards in the Northeast.
Natural gas is burned to generate electricity, to make plastics, steel, and fertilizers. Historic prices have been relatively low due to the surplus of extracted natural gas from drilling and fracking, which will lead to increased prices for both consumers and industry.
Despite the high gas prices, there has not been a rise in rig drilling compared to 2014, when the price was above $5. There were up to 300 rigs drilling gas wells, as opposed to the 100 active ones now.
Cargill Launches U.S. Carbon Farming Program For 2022 Season
According to Reuters, One of the world’s largest commodities traders, Cargill, plans to launch a carbon farming program for the 2022 season, which is established to pay farmers for their production that lowers emissions and captures climate-warming carbon in their soils.
The RegenConnect program will include soil sampling, farm data, and remote sensing to evaluate the benefits to the environment with practices such as planting cover crops for a $20 per ton payment of the sequestered carbon.
Cargill joins many agricultural companies that are launching climate-focused programs and aim to reduce their carbon footprints and be active in the carbon-trading sector.
Readers should note that the process of obtaining carbon credits is both lengthy and costly and PanXchange anticipates a significant short-term shortage of credits to meet the explosive growth from companies seeking to lower their carbon footprints.
The company targets up to 10 million acres in the sustainable and regenerative farming programs by 2030, with customers in raw commodities, livestock production, and food producers are all looking to cut their carbon footprints.
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-Editors, Ronnie Luwero and Emily Shoemaker