Commodity

Food production receives boost in Enugu, says IFAD

The Enugu State Coordinator of the International Fund for Agricultural Development (IFAD), Dr. Edward Isiwu, has said food production in the state has received a major boost. Isiwu, who is the state Programme Coordinator of IFAD’s Value Chain Development Programme (VCDP), said during a media parley in Enugu that this was made possible by capacity building of rice and cassava farmers and other interventions in the state. He disclosed that the target of the organisation was to make Enugu the hub of the staple and cash crops in Nigeria, even as he solicited media partnership in the effort to use the two major crops of rice and cassava to eradicate hunger, as well as boost the state’s economy. He disclosed that other value chain derivatives from the two crops would also be made known to small-holder farmers. Isiwu said that the IFAD-VCDP programme was using transfer of best agronomic and processing practices, market visibility/reach, extension service intervention and financial inclusion for farmers to achieve their targets.

Iron ore price holds above $200

Iron ore prices rose on Wednesday, pressured by concerns about demand prospects for the steelmaking raw material in top steel producer China. According to Fastmarkets MB, benchmark 62 percent Fe fines imported into Northern China were changing hands for $218.66 a tonne on Wednesday, up 0.1 percent from Tuesday’s closing. The most-traded September iron ore contract on China’s Dalian Commodity Exchange ended daytime trade 0.8 percent higher at 1,219.50 yuan ($188.36) a tonne. There are early signs of a turning point in Chinese demand with falling Chinese steel prices crushing margins for steel mills, said Justin Smirk, a senior economist at Westpac in Sydney. Declining cement prices in China, some rebar makers possibly starting to incur losses, and excavator sales in May posting the first monthly drop since early 2020 point to slowing construction activity that has also been hampered by an unfavourable weather, Smirk said.

OPEC reaches compromise with U.A.E. over oil production

OPEC members reached a compromise with the United Arab Emirates, agreeing to lift the amount of oil that country can eventually pump as part of a wider agreement with Russia-led producers to boost global supplies, according to people familiar with the matter. The compromise, reached between Saudi Arabia, the de facto leader of the Organization of the Petroleum Exporting Countries, and the U.A.E. is provisional and subject to approval at an as-yet unscheduled meeting of the cartel and a wider group, called OPEC+, that includes Russia-led producers. That means any new output from a broader production-increase deal reached earlier this month—but held up by the U.A.E.’s resistance—won’t hit markets immediately. Other OPEC members could use concessions made to the U.A.E. to argue for increases in their own output inside the group, delegates said.

Coffee prices soar after bad harvests and insatiable demand

Global coffee prices are climbing and threatening to drive up costs at the breakfast table as the world’s biggest coffee producer, Brazil, faces one of its worst droughts in almost a century. Prices for arabica coffee beans—the main variety produced in Brazil—hit their highest level since 2016 last month. New York-traded arabica futures have risen over 18 percent in the past three months to $1.51 a pound. London-traded robusta—a stronger-tasting variety favored in instant coffee—has risen over 30 percent in the past three months, to $1,749 a metric ton, a two-year high. Brazil’s farmers are girding for one of their biggest slumps in output in almost 20 years after months of drought left plants to wither. Brazil’s arabica crop cycles between one stronger year followed by a weaker year. Following a record harvest in 2020, 2021 was set to be a weaker year, but the drop is more severe than expected.

In 2020, U.S. coal production fell to its lowest level since 1965

U.S. coal production totaled 535 million short tons (MMst) in 2020, a 24 percent decrease from the 706 MMst mined in 2019 and the lowest level of coal production in the United States in any year since 1965. The decline of U.S. coal production in 2020 was largely the result of less demand for coal internationally and less U.S. electric power sector demand for coal. Lower natural gas prices made coal less competitive for power generation. U.S. coal-fired generation fell 20 percent from 2019. Natural gas prices started 2020 relatively low because mild winter weather led to less natural gas demand for space heating, and prices remained low as the economic effects of the COVID-19 pandemic reduced both natural gas production and consumption. U.S. coal exports were 26 percent lower in 2020 than they were in 2019. The COVID-19 pandemic slowed global demand for coal, and some U.S. coal mines were idled for extended periods to slow the spread of the virus among workers.

US hard red spring wheat production seen dropping 42pc from 2020

The US Department of Agriculture in its July 12 Crop Production report forecast 2021 US durum wheat production down 46 percent from 2020, spring wheat other than durum down 41 percent, and winter wheat up 16 percent, the latter up 4 percent from the June forecast. Production of spring wheat other than durum was forecast at 344.575 million bushels, down 41 percent from 585.99 million bushels in 2020, based on a yield of 30.7 bushels an acre, down 17.9 bushels per acre from last year, and harvested area of 11.2 million acres, unchanged from June but down 7 percent from last year. Of the total, 305.395 million bushels was hard red spring wheat, down 42 percent from 2020. If realized, it would be the smallest hard red spring wheat crop since 181 million bushels in 1988, a year that featured similar drought conditions as the current crop.

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