US whole wheat flour output falls in 2020
Whole wheat flour production in 2020 totaled 20.12 million cwts, down 10 percent from 22.359 million cwts in 2019, according to data from the National Agricultural Statistics Service of the US Department of Agriculture. The production total was the smallest for any year since the USDA began tracking whole wheat production data 6 years ago. Whole wheat flour production has now fallen three consecutive years and four of the last five. The year-to-year drop of 2.119 million cwts in 2020 followed more modest production decreases of 104,000 cwts in 2019 and 176,000 cwts in 2018. The trend is at odds with the advice of the Dietary Guidelines for Americans, which suggests at least 50 percent of grains intake should be in the form of whole grains. The share of total flour production accounted for by whole wheat flour in 2020 was 4.7 percent, down from 5.3 percent in 2019 and 5.2 percent in 2018. In the fourth quarter of 2020, whole wheat flour production totaled 4.852 million cwts, down 1.105 million cwts, or 19 percent, from 5.957 million cwts in the final quarter of 2019.
India says predictability in oil production cuts, stable prices key for recovery
India presently urged the world’s top oil producers to plan production cuts in a way that is more predictable, which would help to plan crude imports in a more organized manner and avoid the pain of volatile prices as it could dampen the fragile recovery process. While addressing the S&P Global Platts South Asia Commodities Virtual Forum, India’s petroleum and steel minister Dharmendra Pradhan said stable energy markets will be crucial for both economic and demand recovery, and cooperation among consumers and producers is crucial to make that happen. While we do not favor too low prices, we also do not support high prices, which deny energy access to millions in India. Efforts at artificially distorting prices will have a dampening effect on the fragile global economic recovery that is underway, Pradhan said in his keynote address. It is our expectation that key energy partners who are also major producers would be mindful of consumption-led recovery of India and create more predictability in production cuts, which would help us to plan and contribute towards creating more stable energy markets, he added. The comments from Pradhan comes after Saudi Arabia in early January made a surprise announcement of an extra 1 million b/d production cut, as well as plans to hold February and March crude production to 8.119 million b/d, well below its OPEC+ quota of 9.119 million b/d, to help bring down oil inventories bloated because of the pandemic.
Indonesia coal exports rise in December
Indonesian coal exports rose sharply in December 2020, with shipments to China reaching an all-time high, Argus Media has reported. The increase took overall shipments for the last year to 407 million tone, slightly higher than a government-set target for the year of 400 million tone, although exports for the whole of 2020 fell on the year for the first time since 2015. Indonesia, the world’s largest thermal coal exporter, shipped about 41 million tone in December, up by 3.38 million tone on the year and the highest since October 2019, customs data show. Indonesian coal production also exceeded the government’s 550 million tone target for 2020, with output at approximately 563 million tone. But this was down from 616.2 million tone in 2019, when domestic consumption totalled 138 million t, energy ministry data show. Total coal exports reached 459.1 million tone in 2019, customs data show. Stronger-than-expected output in 2020 and a y/y drop in exports and local consumption may have boosted inventories across the country. But domestic demand is expected to rebound in 2021, which, coupled with steady Chinese demand for Indonesian coal, could help tighten the fundamental balance.
Iron ore dilemma – will China actually cut steel output?
China’s vast steel sector, and the iron ore industry feeding it, is grappling with a seemingly contradictory policy impulse that it should produce less this year, even as demand remains strong amid post-pandemic stimulus spending. China produced a record 1.05 billion tone of steel in 2020, helping to drive spot iron ore prices to a one-year peak of $175.40 a tone on Dec. 21. Over the year, prices rose 75 percent. The spot price of benchmark 62 percent iron ore delivered to North China, as assessed by price reporting agency Argus, has since retreated back below $160 a tone. But the price has been above $150 for almost two months, which is a strong performance considering that the steel-making ingredient held below $100 for the five years between May 2014 and May 2019. While China’s record steel output has played its role, worldwide iron ore supply has also been hit by a series of issues in second-largest exporter Brazil, which has suffered disruptions from the coronavirus pandemic, mine closures on safety grounds and a fire last month at an export terminal.
World milk supply grows in pandemic
Despite the worst pandemic in more than a century that wreaked havoc in the global dairy sector, the world milk supply continued to increase. Government relief programs, retail channels, and overall demand were able to absorb much—but certainly not all—of the additional milk. It is reported that with the loss of dairy demand at foodservice, it is amazing that a home was found for much of 2020’s additional milk. Last year’s demand came in the form of government programs and elevated retail sales, along with strong purchases from key importing countries that were able to manage their Covid response well, such as China. China’s imports of skim milk powder (SMP) and whole milk powder (WMP) last year were lower than 2019’s record-high levels, after adjusting for leap year, but they were still strong. However, China’s 2020 imports of ultra-high temperature milk, at 845,000 metric ton, climbed 16 percent above 2019 volumes while whey imports soared 38 percent to 626,000 metric tons, according to data from Trade Data Monitor.