Thailand rice production, exports to rise
The La Niña weather phenomenon will provide plentiful precipitation and water supplies for rice farmers in Thailand, yielding 20 million tonnes of rice in marketing year 2022-23, a 2 percent increase over 2021-22, according to a Global Agricultural Information Network report from the US Department of Agriculture Foreign Agricultural Service (FAS). USDA’s FAS Bangkok Post is forecasting rice exports in 2022 at 8 million tonnes, up 31 percent from 6.1 million tonnes in 2021, due to larger exporter supplies. “The weakening of the Thai baht has made Thai rice export prices attractive and competitive,” FAS said. “Traders anticipate increased demand for Thai rice for the remainder of 2022 as current prices for Thai rice are competitive to other exporting countries.” Wheat imports for 2022-23 have been revised down to 2.7 million tonnes, as milling wheat demand has decreased more than growing demand for feed wheat. Despite the reduction, 2022-23 wheat imports are still 8 percent higher than 2021-22. FAS revised down milling wheat imports to 1.1 million tonnes, unchanged from the previous year despite an expected increase in the number of foreign tourists.
Biden gets tough over gas prices
With Americans complaining about high gas prices, President Joe Biden went on the offensive Wednesday, shaming oil companies, calling out Republicans for claiming production has been thwarted by the administration, and casting the crisis as a test of American patriotism and determination to stop a dictator. Formally announcing a proposal to suspend the federal gas tax for 90 days, Biden blamed much of the gas price hike on Russian leader Vladimir Putin’s invasion of Ukraine, and the attending supply and global market forces that increased costs.
EU again cuts my 2022-23 wheat yield estimates, may stoke supply concerns
Soft wheat yields in the EU for the 2022-23 marketing year (July-June) have been slashed for a third straight month in June, drawing supply concerns as smaller EU output could further stretch wheat markets in the absence of key supplies from the Black Sea. Soft wheat yields were cut to 5.76 mt/ha from 5.89 mt/ha, the EU Commission said June 21. The latest projection is also recorded for the five-year average of 5.84 mt/ha for soft wheat yields. At the beginning of June, the EU Commission pegged soft wheat production for 2022-23 at 130.39 million mt, based off an area of 21.7 million hectares and a yield projection of 5.98 mt/ha. According to analysts, the EU wheat crop is likely to be smaller in MY 2022-23 (July-June) due to lower output in France, Romania and Bulgaria. France is the largest supplier of wheat in the EU, followed by Romania. According to the EU crop observatory, soft wheat output is forecast at 34.2 million mt in MY 2022-23, down from 35.5 million mt in MY 2021-22.
NY sugar closes modestly higher on strength in crude oil
July NY world sugar #11 (SBN22) on Tuesday closed up +0.06 (+0.32 percent), and Aug London white sugar #5 (SWQ22) closed down -5.80 (-1.03 percent). Sugar prices Tuesday settled mixed, with NY sugar climbing to a 1-week high. Strength in crude oil prices underpinned sugar prices. Crude oil prices (CLN22) rallied more than +1 percent Tuesday, which benefits ethanol prices and may prompt Brazil’s sugar mills to divert more cane crushing toward ethanol production rather than sugar, thus curbing sugar supplies. Sugar prices gave up most of their gains Tuesday, and London sugar fell into negative territory, after the CEO of Copersucar said Brazil’s sugar mills may crush as much as 548 MMT of sugar this year, up +4.8 percent from last year. Copersucar owns the world’s biggest sugar trader, Alvean. Sugar also has support from last Friday’s report from Reuters that said India might cap sugar exports at 6-7 MMT starting in October. Another positive for sugar was last Thursday’s projection from Czarnikow for the global 2022/23 sugar market to fall into a -1.4 MMT deficit versus the +400,000 MT surplus it projected in May, as low rainfall in Brazil reduced sugarcane yields. Ramped-up sugar output in India is bearish for sugar prices after the Indian Sugar Mills Association (ISMA) reported that India’s 2021/22 sugar production during Oct 1-May 15 rose +14.4 percent y/y to 34.88 MMT.
Palm oil protectionism – cooking up a storm
The global palm oil market was dealt a blow recently following the announcement that the world’s largest exporter Indonesia would ban exports on April 28th in a step to protect domestic consumption. Indonesia is the world’s largest producer of palm oil, accounting for 58 percent of global export volume as recorded by S&P Global’s Global Trade Analytics Suite (GTAS) for HS Code 1511, Palm oil and its fractions, in 2021. This output is a position and percentage share Indonesia has held since 2019. Whilst production levels have remained constant post Covid, the value of Indonesia’s global palm oil exports has risen markedly year on year, from $17.3B in 2020 to $26.7B in 2021
Coal production in 2022: boom or bust?
Global Energy Monitor’s ‘Boom and Bust Coal 2022’ report finds that after rising in 2020 for the first time since 2015, total coal power capacity under development declined 13 percent last year, from 525 gigawatts (GW) to 457 GW, a record low. 34 countries have new coal plants under consideration, down from 41 countries in January 2021. Global coal plant capacity under development shrank 13 percent in 2021, according to Global Energy Monitor’s eighth annual survey of the coal plant pipeline, but steeper cuts are needed to achieve climate goals. According to a Rystad Energy analysis, if the conflict in Ukraine continues and gets worse, coal production in Europe could increase by 11 percent in 2022. But, even in the context of the war in Ukraine, the European Commission insists on the need to continue the decarbonization of the energy system, to achieve the climate goals, set for 2030 and 2050, mainly reducing the greenhouse gas (GHG) emissions.