Govt announces incentive for mills exporting sugar
The Centre on Thursday announced an incentive for sugar mills in the form of an additional domestic sales quota to those that export sugar and divert the commodity towards ethanol making, in the new 2021-22 season starting October. Sugar mills have also been asked to take advantage of firm global sugar prices and plan export of raw sugar in advance in the new season (October-September), it said. This indicates that the government is unlikely to extend the export subsidy from the new season, as it would be easier for domestic mills to sell sugar abroad in view of firm global prices. India, the world’s second-largest sugar-producing country, had to offer export subsidies in the past two years, to reduce surplus stocks and help cash-starved sugar mills clear cane payment to growers.
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Sri Lanka to import Pakistan rice
After repeated failure to maintain lower rice prices, Sri Lanka is now looking to import 6,000 metric tons of rice from Pakistan to overcome shortage in the short term and establish five modern rice mills in five major rice producing districts in the near future. All efforts of President Gotabaya Rajapaksa’s administration to fix maximum retail price in the market below 100 rupees have failed amid heavy demand for the staple food and uncertainty over COVID-19 lockdowns. However, official data showed Sri Lanka has produced 3.2 metric tons of rice in both 2020/21 Maha cultivation seasons (Nov–Feb) and the 2021 Yala cultivation season (May–Aug), nearly 50 percent higher than the country’s annual consumption of 2.2 million metric tons amid hoarding by private mill owners.
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OPEC+ predictably rejects Biden plea for more oil production
This one was easy to see coming, as President Joe Biden’s request for the OPEC+ countries to pour more of their own oil onto the global market in order to ease crude oil prices made no real economic sense from the beginning. As I pointed out last week, Biden was basically asking these other countries to damage their own economies in an effort to ease inflation in the United States. Thus it was that yesterday, the OPEC+ participating countries, including Russia, let it be known that they have no intention of responding positively to the Biden request, which was communicated last week via a statement by National Security Advisor Jake Sullivan. OPEC+ already has announced plans to add an additional 400,000 barrels of oil per day each month for at least the next year, based on its assessment that global demand for crude will continue to rise over the same period of time.
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Brazilian July natural gas output hits record
Total Brazilian natural gas production reached a new record in July of 139mn m³/d (4.9 Bcf/d), besting the prior record set in January 2020 of 138.7mn m³/d, according to Brazil’s oil and gas regulator ANP.
But the volume of Brazilian natural gas output offered to the market after flaring, loss and reinjection fell by 4.8 percent in July from the prior month, to 56mn m³/d because of an increase in reinjection into production wells. Compared to the same month in 2020, during the first months of Covid-19 pandemic-related cuts, availability rose by 2 percent. Reinjection — where gas is pumped back into wells to maintain pressure levels — reached 65mn m³/d in July, 8.6 percent more than June and 14.4 percent above the same month in the prior year. Natural gas flaring increased by 12.3 percent in July compared to June and was down by 12.1 percent in comparison to the same month last year. Nearly 90 percent of Brazilian gas production is associated with oil output, so producers may choose to reinject the gas to elevate oil production or because of restrictions in gas processing, transporting or trading.
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EU-27 milk production returns to growth
Milk production in the EU-27 has seen more positive growth in the last quarter after a slow start to the year. However, annual comparisons need to be viewed in light of curtailed production in 2020 when markets were reeling from the initiation of lockdowns. Production in the first quarter of 2021 was roughly on par with year earlier levels, after adjusting for the leap year in 2020. Low production levels in the first part of the year, particularly in France and Germany, brought an end to the growth seen across the continent through the second half of 2020.
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Global black tea production up 14pc
Even as various stages of lockdown are implemented in different countries, India has helped the global black tea production to rise over the previous year. All countries except Kenya have produced more tea during the lockdown. “According to our compilation of the latest official data received from different countries, the global black tea production so far this calendar has risen to 894.52 million kg (mkg) from 786.32 mkg in the same months of 2020, source said. This increase of 108.20 mkg marked a gain of 13.76 percent. India contributed to the lion’s share of this increase with production increasing by 94.37 percent or an impressive 27 percent to reach 443.85 mkg from 349.48 mkg in the same months of 2020. Sri Lanka also produced more.
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China cuts steel production. how that hurts iron-ore prices
Iron-ore prices touched record highs this year, but look to suffer their biggest monthly loss ever as China’s curbs on carbon emissions include limits on the output of steel, hurting demand for the raw material used to produce it.
“The market is not short iron ore, but short in terms of consumption as steel mills have their hands tied in a market where global steel demand is healthy and yet mills find themselves unable to produce,” says Rhys Pittam, head of ferrous operations at Marex. The pessimism in the market is “China-led,” as the nation is the biggest producer of steel products and consumer of iron ore, he says. China announced crude-steel production restrictions this year as it aims to reduce carbon emissions.