realfast95
2 years ago
Russia To Open Sea Corridors From Ukraine Ports Amid Wheat Crisis, But Warns Of Ukrainian Mines
Wednesday, May 25, 2022 - 09:20 PM
https://www.zerohedge.com/geopolitical/russia-open-sea-corridors-ukraine-ports-amid-wheat-crisis-warns-ukrainian-mines
After being accused of using the food supply as blackmail and a bargaining chip, Russia said Wednesday its military will open up protected sea corridors for international shipping to pass through from seven Ukrainian ports that have thus far been blockaded.
According to a defense ministry statement reported by Bloomberg late in the day, "Humanitarian maritime corridors from ports on the Black Sea and Azov Sea, including Odesa, will operate from 8 a.m. to 7 p.m. daily."
The announcement comes two days after the head of the United Nations World Food Program David Beasley ripped Moscow for what he dubbed a "declaration of war" on global food security. He's been urging "political solution" to the crisis of blocked Black Sea ports, saying the war in 'the world's breadbasket' threatens to unleash "famine, the destabilization of nations as well as mass migration by necessity." Millions of people in 43 countries dependent on grain from the war-torn region are "knocking on famine’s door," he said.
However, Russia has stressed that its military is engaged in extensive and complex demining operations due thousands of mines dotting Ukraine's coast placed by Ukrainian forces, making international shipping dangerous and impossible. As reported in the independent Moscow Times:
The port of Mariupol has resumed normal operations, Russia's Defense Ministry announced Wednesday.
The Defense Ministry said Black Sea Fleet specialists cleared more than 12,000 mines from the seaport and its surrounding areas.
Some one-third of global wheat supplies originate from Ukraine and Russia, with the bulk of it passing through the Black Sea.
On Wednesday Russia said it remains ready and willing to work with the West to reach a solution, but that easing sanctions is a necessity:
"We have repeatedly stated on this point that a solution to the food problem requires a comprehensive approach, including the lifting of sanctions that have been imposed on Russian exports and financial transactions," Russian Deputy Foreign Minister Andrei Rudenko was quoted as saying by Interfax.
But the statement called on Ukraine to cease deployment of sea mines, and to engage in immediate demining operations: "And it also requires the demining by the Ukrainian side of all ports where ships are anchored. Russia is ready to provide the necessary humanitarian passage, which it does every day," Rudenko added.
He further warned against such plans that have been floated lately by Lithuania and the UK which involve foreign military naval escorts accompanying cargo ships. Interfax quoted him as saying such a scenarios would "seriously exacerbate the situation in the Black Sea."
Also, addressing ongoing accusations that Russia is stealing Ukrainian grain and other food sources, he stressed to reporters: "We completely reject this. We don't steal anything from anyone."
Regarding mines, NATO in a message this month warned all commercial traffic in the Black Sea of the growing danger of drifting mines as spillover from the Russia-Ukraine war. "The latest statement of regional authorities, confirming another sighting of a mine, shows the threat of drifting mines in the Southwest part of the Black Sea still exists," a May 13 NATO
"An additional stray mine was detected and deactivated on 06 of April 2022 in the Southwestern part of the Black Sea. National authorities stated that the searches for mine-like objects are ongoing. The threat of more drifting mines cannot be ruled out," it warned.
realfast95
2 years ago
Wheat Futures Market News and Commentary
Wheats Firm to Close Mixed
Barchart - Wed May 25, 4:34PM CDT
After sharp losses through midday, the wheat market ended Wednesday well off the lows. Spring wheat prices closed black on the day, with the board 3 1/4 to 4 3/4 cents higher at the bell after being down by nearly 40 cents earlier. CBT SRW ended Wednesday down by 6 1/2 to 10 1/4 cents. KC wheats also bounced back from the earlier weakness to close the day 1 1/2 to 4 1/2 cents in the red.
Going into the weekly Export Sales report analysts expect old crop wheat business was between 50k MT of net cancelations and 100k MT of net new sales from the week that ended 5/19. New crop wheat sales are estimated between 100,000 MT and 400,000 MT.
Social media reports suggest Russia is willing to open up humanitarian corridors through the Black Sea Blockade for Ukrainian food and grain exports by sea, in exchange for reduced sanctions by NATO allies. Terms under which this would be allowed are not yet public.
https://www.barchart.com/futures/quotes/ZWN22/overview
realfast95
2 years ago
Wheat Futures Market News and Commentary
Double Digit Drops for Wheat Market
Barchart - Tue May 24, 4:52PM CDT
Kansas City HRW wheat futures led the descent on Tuesday with 2.78% to 3.04% losses. Chicago wheat futures were also down 2.3% to 2.96% on the turnaround Tuesday. Spring wheat closed the day 20 1/2 to 21 3/4 cents in the red. Oats Futures Prices firmed up on follow through strength out of the weekend, going home with a 7% gain in the July contract. At $6.74 1/4, July oats were nearly 50% of the way back to their April LoC high.
Reports from the Rosario Board of Trade suggest Argentinian wheat farmers have forward contracted 8.2 MMT of wheat for export. That compares to 2.4 MMT at the same point last year and 1.4 MMT in 2020/21. Rosario Grains Exchange cites the urgency to book wheat to the global market before the export quota is filled. 22/23 wheat planting in Argentina is in the beginning stages. Wheat planting is also underway in Brazil, with CONAB reporting 16.2% of the crop was planted as of 5/14.
Jul 22 CBOT Wheat closed at $11.54 3/4, down 35 1/4 cents,
realfast95
2 years ago
With food prices climbing, the U.N. is warning of crippling global shortages
May 23, 20225:46 PM ET
Fears of a global food crisis are growing due to the shock of the war in Ukraine, climate change and rising inflation.
Kristalina Georgieva, the International Monetary Fund managing director, told the World Economic Forum in Davos, Switzerland on Monday that "the anxiety about access to food at a reasonable price globally is hitting the roof" as food prices continue "to go up up up".
Last week, United Nations Secretary-General António Guterres warned of "the specter of a global food shortage in the coming months" without urgent international action.
The U.N. estimates that in the past year, global food prices have risen by almost one third, fertilizer by more than half and oil prices by almost two thirds.
According to U.N. figures, the number of severely food-insecure people has doubled in the past two years, from 135 million pre-pandemic to 276 million today. Now, more than half a million people are experiencing famine conditions, according to the U.N., an increase of more than 500% since 2016.
In Ethiopia, Somalia and Kenya, the number of people facing extreme hunger has more than doubled since last year, from roughly 10 million to more than 23 million today, according to the report. Across the three countries, the report notes, one person is likely dying every 48 seconds from acute hunger-related causes stemming from armed conflict, COVID-19, climate change and inflationary pressures worsened by the war in Ukraine.
In India, a devastating heatwave has upset the nation's wheat harvest, driving up prices around the world for the staple commodity. Earlier this month, as temperatures in the capital of Delhi hovered near 120 degrees Fahrenheit, the government announced a ban on wheat exports. The announcement helped push wheat prices to record levels.
Wheat prices were already hit hard by the war in Ukraine. Ukraine and Russia are some of the world's biggest wheat producers, combining to produce around 25% of global supply. Global wheat prices surged in the wake of Russia's invasion of Ukraine. They had already risen an estimated 80% in just over a year before December 2021, according to the IMF.
International shocks have brought some countries into near breakdown. In Sri Lanka, rising inflation has led to a wholesale economic emergency, with extreme shortages of food, medicine and fuel.
Humanitarian agencies have warned that Afghanistan has been close to famine for months, while Lebanon has been in economic crisis for over a year.
In the U.S., consumer prices in April were up 8.3% from a year earlier, according to data from the Labor Department. Food costs were up 9.4%, with prices for things like meats, poultry, fish and eggs up 14.3% from the previous year. In March, around 65% of the 200 food banks in the Feeding America network, the nation's largest food recovery organization, reported a greater demand for assistance month on month.
In China, prices of fresh vegetables are 24% higher than a year ago, according to data released from the country's National Bureau of Statistics. China's "zero COVID" policy has meant an economic slowdown, and added to inflation around the world and global supply chain issues.
The U.N.'s Guterres has urged a five step plan to help confront the challenges: increasing supplies of food and fertilizers; social protection systems within countries; more access to international finance; further government help for smallholder food producers; and better funding for humanitarian operations to reduce famine and hunger.
https://www.npr.org/2022/05/23/1100592132/united-nations-food-shortages
tw0122
2 years ago
In recent months, food prices have hit 10-year highs, causing concern worldwide. Supply-chain bottlenecks, labor shortages, bad weather and a surge in consumer demand are among the factors responsible for the spike. So, too, is a lesser-known phenomenon: China is hoarding key commodities.
By mid-2022, according to the U.S. Department of Agriculture, China will hold 69% of the world’s corn reserves, 60% of its rice and 51% of its wheat. By China’s own estimation, these reserves are at a “historically high level” and are contributing to higher global food prices. For China, such stockpiles are necessary to ensure it won’t be at the mercy of major food exporters such as the U.S. But other countries, especially in the developing world, might ask why less than 20% of the world’s population is hoarding so much of its food.
China has operated granaries for thousands of years. In imperial times, they served as a source of tax revenue and a means of managing bad harvests, natural disasters, and war. Their importance grew as China’s population soared, yet the state’s ability to manage them faltered. During the late 19th and early 20th centuries, natural and political disasters brought hunger and starvation to millions. Outsiders referred to China as “the land of famine.” Political instability and revolution soon followed.
Mao Zedong and China’s Communist Party staked much of their credibility on “solving” hunger, but midcentury famines took the lives of tens of millions. President Xi Jinping, never one to criticize his own country, once remarked that many members of his generation still recall hunger. Those memories have informed Xi’s policies since the start of his regime. In 2013, just weeks after taking office, Xi endorsed a nationwide campaign to discourage people from wasting food. In 2020, the “clean-plate campaign” was resurrected as he called on Chinese to “maintain a sense of crisis about food security.”
That crisis isn’t just about having enough to eat. It’s about having enough food produced domestically to minimize reliance on anyone else. Two weeks ago, Xi told a high-level Communist Party meeting that “the food of the Chinese people must be made by and remain in the hands of the Chinese people.”
That won’t be easy. China’s inventory of arable land has been in decline for decades, nibbled away by urban development and soil contamination, and its farms are far less productive than counterparts in other countries. Efforts to boost productivity with policy incentives and technology investments are promising but unlikely to pan out for years.
So China is stockpiling. At home, the government is offering farmers a minimum price for their crops (which are then often stockpiled). In March, it raised the minimum price for wheat for the first time since 2014. Meanwhile, traders have taken advantage of a strengthening yuan to snap up grains at a feverish pace. China’s wheat imports surged 50% between January and July, compared to the same period of 2020.
The size and content of China’s commodity stockpiles is a jealously guarded state secret. But officials have been unusually open about the matter lately. In November, after a vaguely worded government missive about potential shortfalls this winter caused nationwide panic, agricultural officials announced that China had enough wheat stockpiled to last 18 months.
Other countries have been building up food reserves too, of course, especially as Covid-related disruptions persist. In June, the UN’s food agency warned that some low-income countries were likely to see food import costs jump as much as 20% for the year. Though the report didn’t single out any country for responsibility, China — as the world’s largest agricultural importer — certainly plays a crucial role.
Right or wrong, China has no intention of unwinding its stockpiles for the benefit of others.
4Godnwv
2 years ago
Jim Rickards: “We are on the precipice”
BY DAVID HAGGITH ? MAY 20, 2022 3 COMMENTS
I don’t believe many people grasp the enormity of the global food crisis we’ll be facing in the months ahead. But the world could be on the verge of a massive humanitarian crisis. Let’s dive in…
by Jim Rickards on Daily Reckoning:
The supply chain collapse preceded the war in Ukraine, but the war has only intensified the problems. You can see it with your own eyes when you walk into a supermarket and find long stretches of empty shelves in stores that used to be chock-full of food and other merchandise.
Even goods that are available such as gasoline are being sold at much higher prices. Prices for gasoline (and diesel, which is critical for goods transportation) have more than doubled in the past nine months. All of this is clear. The question is will it get worse from here?
Unfortunately, the answer is yes.
Bob Unanue is the CEO of Goya Foods, which is one of the largest food distributors in the world. Few people are better positioned to assess the global food situation than Unanue, who deals with raw food deliveries on the one hand and retail customers on the other.
Unanue is now warning, “We are on the precipice of a global food crisis.” Other experts are quoted making a similar point. That’s not hyperbole or fearmongering, but a serious analysis. Here’s why…
29% of All Wheat Exports in Jeopardy
In the Northern Hemisphere, the planting season for 2022 is well underway. Crops were planted (or not) in March and April. Based on that, you can already form estimates of output next September and October during the harvest season (subject to some variability based on weather and other factors).
Plantings have been far below normal in 2022, either due to a lack of fertilizer or to much higher costs for fertilizer where farmers simply chose to plant less. This predictable shortage is in addition to the much greater shortages due to the fact that Russian output is sanctioned and Ukrainian output is nonexistent because it’s at war.
Russia and Ukraine together account for 29% of global wheat and 19% of global corn exports.
Russia and Ukraine together produce 29% of all the wheat exports in the world. That doesn’t mean they grow 29% of the wheat in the world. It means they grow 29% of the wheat exports.
The U.S., Australia, Canada and others grow a lot of wheat but consume most of it themselves. They export relatively little. Importantly, they don’t simply eat it. They feed it to their farm animals. People don’t often make the connection between grain and animal products, but it’s critical.
Many countries get 70–100% of their grains from either Russia or Ukraine or both. Lebanon gets 100%. Egypt is over 70%. Kenya, Sudan, Somalia, many central African countries and Jordan and other Middle Eastern countries receive much of their grain from Russia or Ukraine.
No Planting, No Crops
But it’s worse than that because not only are many Ukrainian exports shut down now, but the planting season is nearly over. And you’re not going to get any grain in October if you didn’t plant it in April or May. And they didn’t for obvious reasons.
What that means is you project ahead to October, November, December of this year, those countries I mentioned are not going to be able to get their grain supplies. There simply aren’t going to be any, or they’ll be greatly reduced. The combined population of countries that get between 70% and 100% of their imports from Russia or Ukraine is 700 million people.
That’s 10% of the global population. So you’re looking at mass starvation. You’re looking at a humanitarian crisis of unprecedented proportions, probably the worst since the Black Death of the 14th century. That’s coming down the road, even if most people can’t see it coming or fully fathom the depths of the coming crisis.
In short, we know enough now to predict much higher prices, empty shelves and, in some cases, mass starvation in the fourth quarter of this year and beyond.
Beyond the humanitarian aspect of the coming food shortages, there are also potentially serious social and geopolitical ramifications.
Another Arab Spring?
You remember the “Arab Spring” starting in 2010. It started in Tunisia and spread from there. Well, it was triggered by a food crisis. There was a shortage of wheat, which triggered the protests.
There were underlying problems in these societies, but a food crisis was the catalyst for the protests.
Now, many poorer countries in the Middle East and Africa are facing a much greater crisis as the impact of shortages manifests itself later this year and into next year. Will we see even more social unrest than in 2011?
It’s very possible, and it could be even more destabilizing than the Arab Spring. We could also see waves of mass migration from Africa and the Middle East as desperate and hungry people flee their homelands.
Europe endured a wave of mass immigration in 2015. Many migrants were attempting to flee the war in Syria, but there were great amounts of people who weren’t affected by the war. They were just seeking better lives in the welfare states of Europe.
Mass starvation could trigger an even greater migration, which would present Europe with enormous challenges.
The United States could also witness another wave of migration at the southern border, which is currently being inundated by migrants. A global food crisis could send the numbers spiraling to uncontrollable limits.
What if the War Drags On?
And what if the war in Ukraine drags on well into next year? Next year’s growing season would also be disrupted and the shortages could extend into late 2023 and beyond.
Well, maybe some would argue that other nations could pick up the slack and grow additional grain. That’s nice in theory, but it’s not that simple.
Russia is the largest exporter of fertilizer, and sanctions are cutting off supplies. Many farmers cannot get fertilizer at all, and those who can are paying between twice and three times last year’s price.
That means that crops actually produced will have much higher prices because of the higher price of inputs such as fertilizer, and the higher transportation costs due to higher prices for diesel and gasoline.
Like I said earlier, we’re looking at a humanitarian crisis of unprecedented proportions, probably the worst since the black death of the 14th century.
And we’re not prepared to handle it.
https://www.dollarcollapse.com/jim-rickards-on-the-precipice/
realfast95
2 years ago
"Crop Scouts" Scour Midwest Ahead Of Wheat Harvest Amid Menacing Megadrought
(See last paragraph. This Thursday they release the news)
https://www.zerohedge.com/commodities/crop-scouts-scour-midwest-ahead-wheat-harvest-amid-menacing-megadrought
Saturday, May 21, 2022 - 10:00 PM
Droughts, flooding, heatwaves, and even war threaten wheat production worldwide, pushing up the price of bread, pizza crust, pastries, and noodles. Just about every major producer is facing some issue, and the latest is in the US, where 'crop scouts' have begun to scour arid fields across the Midwestern US.
Bloomberg reports crop scouts from the wheat industry have begun to examine plants in farm fields in Kansas to Oklahoma to Nebraska. Harvest is just a few weeks away, and there are concerns devastating droughts have caused damage in US wheat country.
Some farmers already are writing off losses from parched grains. The US Department of Agriculture expects lower yields in Kansas, the top-growing state for hard red winter wheat, a staple relied on for bread flour. The shortfall is seen by USDA as pushing national production to the smallest since 1963, fueling fear of global food shortages as war in Ukraine and weather challenges elsewhere puts supplies at risk. -Bloomberg
It's very clear the world is now looking at North America for robust wheat production, and with that, there need to be optimum conditions and strong yields. However, that may not be the case.
"This is a very challenging year with not a lot of good news," said crop scout Romulo Lollato, a wheat specialist at Kansas State University. He pointed out that minimal rainfall and freezing temperatures in early April could have damaged crop yields.
Aaron Harries, vice president of research and operations for Kansas Wheat, said, "it's been a weather roller coaster" across the Midwest.
Some scouts see bright spots after recent rains. Though a megadrought continues to consume large swathes of farmland.
Meanwhile, wheat futures in Chicago are soaring, near all-time highs, as traders are pricing in what could be a year of low harvest production.
Last week, the World Agricultural Supply and Demand Estimates (WASDE) report published by the USDA showed wheat production in Ukraine is expected to plunge by one-third this season compared with last year.
There are also concerns in Canada, India, and China about harvest declines due to adverse weather conditions. Then there's the Black Sea region, plagued by war that will plunge crop production this year and next.
The final production numbers for the US won't be known for months, though crop scouts will have an idea of what wheat supplies could look like after they wrap up their inspections. USDA's expected to release its estimate based on hundreds of samples on Thursday.
realfast95
2 years ago
Calls grow for Russia to free up Ukrainian ports for grain exports
By Claire Parker
May 14, 2022 at 3:46 p.m. EDT
https://www.washingtonpost.com/world/2022/05/14/ukraine-ports-grain-global-hunger/
Russia stepped up missile attacks on Odessa this week, raising fresh concerns about the security of the port. A port in Odessa is seen in March. (Salwan Georges/The Washington Post)
Foreign ministers from the Group of Seven nations appealed to Russia to free up sea export routes for Ukrainian grain and agricultural products critical to feeding the world, as food prices rise and the World Food Program warns of “catastrophic” consequences if Ukrainian ports remain blocked.
Are you on Telegram? Subscribe to our channel for the latest updates on Russia's war in Ukraine.
“We must not be naive. Russia has now expanded the war against Ukraine to many states as a war of grain,” German Foreign Minister Annalena Baerbock said at a news conference Saturday after the G-7 meetings. “It is not collateral damage, it is an instrument in a hybrid war that is intended to weaken cohesion against Russia’s war.”
Baerbock, who hosted the three-day gathering of top diplomats in Weissenhaus, Germany, said the group was searching for alternative routes to transport grain out of Ukraine as the threat of a global hunger crisis mounts.
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Up to 50 million people will face hunger in the coming months unless Ukrainian grain is released, Baerbock said, according to the Associated Press. About 28 million tons of grain are stuck in Ukrainian ports blockaded by Russian forces.
As the conflict in Ukraine grinds on, some countries have looked to India as an alternative grain source. But after making moves to expand its agricultural export industry, India on Friday banned wheat exports, citing its own food security concerns.
Since Russia invaded Ukraine in February, it has all but captured the port city of Mariupol, where Russian forces have surrounded the last remaining Ukrainian fighters holed up in the Azovstal steel plant.
Russia has also taken control of the Kherson region on the Black Sea and fired missiles at the major port city of Odessa, which remains under Ukrainian control. Ukraine closed its ports in late February amid the fighting, and Russian warships and floating mines have prevented them from reopening.
Ukraine’s wheat harvest, which feeds the world, can’t leave the country
Ukrainian President Volodymyr Zelensky said Monday that such a halt to port operations had likely not been seen in Ukraine since World War II. Foreign Minister Dmytro Kuleba said Friday that Ukraine was willing to take part in talks with Russia to unblock grain supplies but that his government had received “no positive feedback” from officials in Moscow, the AP reported.
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David Beasley, head of the United Nations World Food Program, spoke with U.S. lawmakers and Biden administration officials in Washington this week to emphasize the urgency of reopening the ports and addressing the global food crisis.
Ukraine grows enough food to feed 400 million people annually, and 30 percent of the world’s supply of wheat comes from Russia and Ukraine, according to the World Food Program.
“The ports are critical to food security globally,” Beasley told The Washington Post. “It will be catastrophic if we don’t have those ports opened up and moving food supplies around the world.”
On an average working day, some 3,000 train carloads of grain arrive at Ukrainian ports, where they are stored in silos and, in peacetime, shipped across the Black Sea and through the Bosporus and then around the world, Beasley said. With exports blocked, the silos are full — meaning there is no place to store grain from the next harvest, due to take place in July and August.
The impact of the blockage will be felt in both rich and poor countries, Beasley said, and it is already affecting market volatility. The war has driven prices of wheat, cooking oil and other commodities to record highs, and the U.S. Department of Agriculture projected global wheat supplies would fall next crop year.
Flatbread at a bakery in Cairo. Egypt gets between 75 and 85 percent of its wheat supply from Ukraine and Russia, according to U.N. statistics. (Nariman El-Mofty/AP)
Countries in the Middle East and Africa are especially reliant on Ukrainian grain. Egypt gets between 75 and 85 percent of its wheat supply from Ukraine and Russia, according to U.N. statistics. More than 60 percent of wheat imported by Lebanon comes from Ukraine. Somalia and Benin depend on Russia and Ukraine for all of their imported wheat.
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