Cocoa prices surge on supply uncertainty from Ivory Coast

Cocoa prices have soared since the beginning of the week,  7% in London at £1,715 a tonne, and 10% in New York to more than $2,500 per tonne, hit a 10-month high on Wednesday on uncertainty about supplies from the Ivory Coast, the world’s largest cocoa exporter used to produce chocolate.

Cocoa prices are certainly far away from March 2011 record levels but reached their highest since last november.

This surge was unexpected especially since the International Cocoa Organization (ICCO) cut the global supply deficit forecasts for the current season from 43,000 to 19,000 tonnes due to lower than expected consumption estimates. It is however due to two reasons: one weather-related and the second one policy-related.

Read the rest of Cocoa prices surge on supply uncertainty from Ivory Coast » » »

Chinese Steel Continues to Fall Sharply

Chinese steel production may contract in 2012 for the first time in 33 years.

Major Chinese steelmakers will again lower their prices in September, the third consecutive monthly decline. According to a fact sheet published mid-August, Baosteel, the largest Chinese steelmaker, will reduce the prices of its products from 80 to 180 yuan, or 10 to 23 dollars.

Overall decline since August 1st reached 12.5%.

“The steel market may stabilize in the next two months, but demand remains weak, prices are not ready to rebound,” said Essence Securities analyst. Especially since there is little chance that the central government will inject more money into major construction projects in the second semester.

Read the rest of Chinese Steel Continues to Fall Sharply » » »

Natural gas prices drive CO2 emissions to 20-year low

The International Energy Agency said the U.S. has cut carbon dioxide emissions more than any other country over the last six years. Total U.S. carbon emissions from energy consumption peaked at about 6 billion metric tons in 2007. Projections for this year are around 5.2 billion, and the 1990 figure was about 5 billion.

China‘s emissions were estimated to be about 9 billion tons in 2011, accounting for about 29 percent of the global total. The U.S. accounted for approximately 16 percent.
In a surprising turnaround, the amount of carbon dioxide being released into the atmosphere in the U.S. has fallen dramatically to its lowest level in 20 years, and government officials say the biggest reason is that cheap and plentiful natural gas has led many power plant operators to switch from dirtier-burning coal.

Read the rest of Natural gas prices drive CO2 emissions to 20-year low » » »

Upward pressure on rubber price likely

In 2008, during the financial crisis, the price of rubber lost 56%. Facing this situation, Thailand, Malaysia and Indonesia, representing about 70 percent of global natural-rubber supply, agreed to withdraw 690,000 tonnes from the market. Rubber price surged more than 100% the following year.

Rubber plunged 43 percent in the past year and reached its lowest level in almost three years as growth slowed in China, the top consumer, and Europe. At the Tokyo Stock Exchange Tuesday, January harvest  was trading at 213,800 yen per tonne, the lowest price since October 2009. Same story at the Shanghai Stock Exchange, where January contracts were down to 21,150 yuan per tonne. Overall, rubber has lost nearly 27% of its value between March, its highest rate, and August.

So, after Indonesia indicated early July it was considering introducing a minimum price, Thailand, Indonesia and Malaysia today signed an agreement to reduce their rubber supply by 450,000 tons. Practically, 300,000 tons will not be exported this summer and 16,000 hectares of aging trees will be cut. If history repeats itself, this should give a major boost to rubber prices. Read the rest of Upward pressure on rubber price likely » » »

The U.S. Natural-Gas Boom Will Transform the World

Demand for natural gas has not kept up with the phenomenal growth in supply. Thats indicated by the extremely low current price and the thousands of recently developed unconventional natural gas wells that are shut-in. Unconventional natural gas production from “dry” wells those that dont produce useful petroleum liquid products is at a virtual standstill.

This signals that some recovery in North American natural gas prices is likely—to the range of $4 per thousand cubic feet, perhaps—which would be welcomed by producers. Consumers who heat their homes with gas, and chemical companies and other manufacturers who rely on this raw material for producing petrochemical and polymers, should enjoy several decades of abundant supply.

Read the rest of The U.S. Natural-Gas Boom Will Transform the World » » »

Commodities: El Niño might be under way

The El Niño weather phenomenon has again emerged in the Pacific Ocean and could last until early winter, Japan Meteorological Agency said last weekend. El Niño results in the warming of surface waters across the tropical Pacific Ocean roughly every five years and can cause hurricanes, floods or droughts.

The Australian Bureau of Meteorology said although El Niño development stalled during the second half of July, “over the past fortnight indicators such as the Southern Oscillation Index and trade wind strength have shown renewed trends that are consistent with the early stages of an El Nino event.”

Read the rest of Commodities: El Niño might be under way » » »

Myanmar wants to be the world’s biggest rice exporter again

Myanmar has decided to develop its rice production, following its neighbors steps. The government hopes to export 2 million tons of rice in 2013, and 3 million tons in 2015.
From 778,000 tons in 2011, the volumes available for export could double this year, according to estimates by the USDA.

According to the head of crop research at International Rice Research Institute, Myanmar has a perfect environment for growing rice in many areas, untapped potentials that could quickly make it a leading exporter.

Read the rest of Myanmar wants to be the world’s biggest rice exporter again » » »

World food price crisis: 6% increase in July

According to FAO, global food prices have bounced back by 6% in July after several months of decline. This increase is mainly due to soaring prices for cereals and sugar: over 17% for cereals and 12% for sugar. The FAO food price index has rebounded significantly in July to 213 points vs. 201 in June.

The Rome-based institution said in a statement that the increase was mainly due to a jump in prices for cereals and sugar, and more moderate increases of oils and fats. International prices of meat and dairy products remained more or less unchanged. If this trend continues, the February 2011 peak of 238 points that started in July 2010 could be rapidly reached. It could be similar since in both cases, soaring grain prices were the original trigger.

Read the rest of World food price crisis: 6% increase in July » » »

Russia wants to limit soybeans exports

The Russian government has decided to increase customs duties on soybeans, APK Inform reported. Currently set at 5%, with a minimum of 8.5 euros per tonne, they are raised from August 23rd to 20% with a minimum of 35 euros per tonne.

These tariffs apply to all countries except members of the Custom Union, Kazakhstan and Belarus.

Read the rest of Russia wants to limit soybeans exports » » »

Wheat: Sharp harvest decline in Ukraine

The Ukrainian Minister of Agriculture announced last weekend figures for grain production. Between the beginning of the year and August 3rd, the country harvested 24 million tons of various grains, compared with 30.4 million last year in the same period, a decrease of 21%.

More specifically, production was 15.5 million tonnes for wheat and 3.95 million tonnes for barley, the two main crops of the country, reports the agriculture agency APK. Harvests are expected to finish in late September.

Read the rest of Wheat: Sharp harvest decline in Ukraine » » »