Global milk supply growth forecast to slow in 2021
Despite the disruption to food markets by coronavirus early in the year, dairy markets recovered quickly and remained surprisingly robust through 2020. This resulted in better than expected growth in milk deliveries, which are estimated to have increased by just under 4.9bn litres (1.7 percent) in 2020 compared to 2019.
Government support packages were put in place in most of the key dairy producing regions, protecting consumption of dairy through income support or direct purchases.
The EU and Argentina experienced much higher growth rates than predicted, although all regions except Australia outperformed forecasts.
Latest forecasts continue to predict growth in global milk supplies for 2021, although at a lower rate than last year. Expectations of economic recovery and the return of foodservice demand as vaccines are rolled out is underpinning this growth. Risks to growth are tightening farm margins in South America and potentially lower import demand from China.
In total, milk production is estimated to increase by around 1 percent in 2021, increasing total supplies by 3.1bn litres.
Saudi Arabia vindicated as pandemic hits global oil demand
For Saudi Arabia, bad news in the oil market has rarely been such a vindication.
Two weeks ago, the world’s biggest crude exporter stunned energy traders by announcing that – rather than restore halted production as planned – it would slash supplies by a further 1 million barrels a day.
The resurgent pandemic necessitated “preemptive” action to protect the oil recovery, said the kingdom’s Energy Minister Prince Abdulaziz bin Salman. That ran counter to the view of Saudi’s OPEC+ ally, Russia, but since then plenty of evidence has emerged that Riyadh made the right call.
On Tuesday, the International Energy Agency slashed forecasts for world oil demand in the first quarter as countries hunker down to contain new coronavirus outbreaks. China, which has powered crude’s recovery until now, is locking down cities again and discouraging travel over the Lunar New Year holidays.
“It will take more time for oil demand to recover fully as renewed lockdowns in a number of countries weigh on fuel sales,” the Paris-based IEA said in its monthly report.
Global natural gas production down 3.6pc in 2020
Global natural gas output fell 3.6 percent in 2020 but still outstripped production as the pandemic hit demand and prices, consultancy Rystad Energy said on Monday.
Output fell to 3,918 billion cubic metres (bcm) with North American production hardest hit, Rystad Energy estimates showed, lower than a previous estimate.
Global gas demand fell 2.5 percent to an estimated 3,840 bcm, though lower prices for gas meant increased competitiveness versus coal in the power sector and helped limit the fall, the consultancy said.
Reflecting the impact of lockdowns to curb the spread of the coronavirus, demand in Europe fell by 7 percent, or 40 bcm, while Asian demand remained relatively strong.
Global imports of liquefied natural gas (LNG) bucked the downward trend and rose 3 percent to 363 million tonnes, driven by demand from Asia, especially China, Rystad Energy said.
LNG prices in Asia reached a record high last week.
Liquefaction capacity grew by 5 percent to 464 million tonnes per year, with new plants coming online in the United States in particular.
India’s Oct 1-Jan 15 sugar output surges 31pc on year on cane availability
A total of 487 mills in India undertook cane crushing activities in India over Oct. 1-Jan. 15, up from 440 mills over the same period a year earlier, the data showed.
The sugar marketing year in India, the world’s second-biggest producer behind Brazil, runs October-September.
S&P Global Platts Analytics estimates production for the 2020-21 marketing year at 32.5 million mt, up 19.1 percent year on year.
In India’s Maharashtra state, 181 mills produced 5.16 million mt of sugar over Oct. 1-Jan. 15, surging from 2.55 million mt produced over the same period a year earlier by 139 mills, the ISMA data showed.
In Uttar Pradesh, 120 mills produced 4.3 million mt until Jan. 15, compared with 119 mills that produced 4.38 million mt in the same period a year earlier. The slight dip in production in the state was attributed to lower cane yields and lower sugar recoveries.
Karnataka produced 2.98 million mt from 66 mills until mid-January, up from 2.19 million mt from 63 mills in the same period last season.
China coal stokes climate fire
China is “focusing its recovery on high-carbon energy and infrastructure, as it did after the 2008-09 global financial crisis”, says Carbon Brief, which analysed the spending plans. Dozens of new coal-fired power stations and climate-trashing coal-to-chemicals plants are among the key items.
The plans make a mockery of Chinese premier Xi Jinping’s claim to the United Nations in September to be aiming for “carbon neutrality before 2060”.
This chasm between words and actions makes Xi a “climate arsonist” still more dangerous than Donald Trump, Richard Smith, a US-based China researcher, writes in a recent article. Smith fears that Xi is “abandoning the transition to renewables”.