Russian Wheat, Brazilian Soya, Kenyan and Pakistan trade, High Sugar Prices, and our Latest ESG Spotlight
[September 14th, 2021]
Hi all! This week, Russia’s wheat export tax sees another rise due to its weekly tax changes and its effects on the export of the staple crop. Brazil plans for a bigger soya crop, Kenya and Pakistan are yet to implement an agreement on trade for mangoes, and sugar prices continue to rise due to the cold snap. In our ESG Spotlight: European start-ups plan to launch a plant to capture carbon dioxide.
Editor’s note: I think it’s abundantly clear that food prices in the US are up. Over the weekend, our CEO confessed to paying $26 for four ears of sweet corn. Tragically, two caught fire on the grill despite soaking the husks in cold water. She has since reverted to the tin foil method.
Russian Wheat Export Prices Up For 8th Week In A Row As Taxes Rise
Wheat from Russia is seeing another increase in price due to a higher export tax with 12.5% protein quoted at $299.50 FOB from Black Sea ports for an end of September shipment compared to $299.00 in the previous week. This might not seem like a lot, but remember that bulk grains typically travel in 60,000-ton Panamax vessels, so it’s an increase of $30,000 in one week.
According to Hellenic Shipping News, Moscow set the export tax weekly, and $46.50 per ton has been set for September 8th-14th from $39.40 per ton in the previous week. Traders have stated that it is difficult to predict any future tax levels.
Russia’s wheat production of 2021 is estimated at 75.4 million metric tons. The wheat export tax was introduced to stabilize grain prices in the domestic market as global prices increased. Russian wheat exports are estimated at 33 million tons this year, far behind the pre-pandemic levels of 35 million tons in the 2018-19 season and 40 million in the 2017-18 season.
Brazil Soya Production On A High
Brazil’s soybeans production in the 2021-22 season is expected to reach 141.26 million tons, according to the National Supply Company Conab, and this will be supported by estimated exports of up to 87 million tons in part with the continued demand from China.
MercoPress reports that the estimated 39 million hectares planted are seeing an average yield of 3,539 kilos, a 0.29% increase from the previous crop, while the overall crop has increased by 3.9% in the same period.
The global projection for soybeans is at 380 million metric tons for the 2021-22 season, with an average of 362 million metric tons.
Kenya and Pakistan Trade Activity
Kenya’s authorities are yet to implement an MOU signed between the East African country’s government and that of the government of Pakistan as the Asian country positions itself to purchase mangoes throughout the year.
According to Business Daily Africa, Pakistan only produces mangoes three months a year, creating demand for the rest of the year. Kenya’s Department of Agriculture is yet to approve the agreement that would see exports of mango and citrus in what would be a boost for Kenyan farmers who have seen their mangoes being restricted from the European markets due to fruit flies.
Kenya and Pakistan trade has grown over the past decade, rising from $283 million in 2008 to $705 million in 2020. Pakistan recently removed an import duty of 0.5% on tea imports, and as Pakistan is Kenya’s largest tea buyer, this has been welcomed in Nairobi. In 2011, Pakistan imported $215 million of tea from Kenya, and in 2020 that figure rose to $480 million.
Trade is up for Kenya and Pakistan, and everyone, including the fruit flies, are looking forward to a decision on mangoes.
Sugar Prices Soar After Brazil Cold Snap
Due to the frost in Brazil, sugar prices are seeing a four-year high as raw sugar futures trade at around 20 cents a pound in New York, which is over 60% more than in the last year and its highest since the beginning of 2017.
According to The Wall Street Journal, the producing areas in the center-south region of Brazil were faced with harsh weather in June and July, and large swathes of damaged sugarcane land resulted in lower sugar content.
Sugar is not the only one facing unfavorable weather this year. Other staples of agricultural commodities such as coffee fields are being damaged by frost in Brazil, hot conditions in the US fields are affecting soy, corn, and wheat, and then some wildfires increased lumber prices in July.
Global sugar production is expected to fall from 98 million tons to 95 million tons by next September. Not a sweet deal.
ESG Spotlight: World's Largest Plant Capturing Carbon From Air Starts In Iceland
Swiss start-up Climeworks AG and Icelandic carbon storage firm Carbfix have partnered to create the world’s largest plant that will suck up to 4,000 tons of carbon dioxide per year and deposit it underground.
Reuters reports on the new development being equivalent to the annual emissions of 790 cars. Carbfix and the other 15 plants around the world capture 9,000 tons of C02 per year. There remains many more opportunities for new players as the International Energy Agency estimated that C02 emissions totaled 31.5 billion tons last year.
In the United States, the oil company Occidental is developing a facility that will capture 1 million tons of carbon dioxide per year near some of its oil fields in Texas.
Climeworks AG signed a 10-year agreement with Swiss Re for carbon removal and has also offered clients a subscription service for carbon removal.
Interested in advertising with us?
Please contact us at email@example.com
Do you have any news that you would like to share?
Please send to firstname.lastname@example.org or email@example.com
-Editors, Ronnie Luwero and Emily Shoemaker