What should be Bangladesh’s food security strategy?
The rapid increase in global food prices in recent months have put many countries including Bangladesh in a crisis, especially affecting low and middle-income families as they spend a large share of their income on food. The Food and Agriculture Organization (FAO) Food Price Index has reached 158.5 points, higher than the previous peaks of 132.5 and 137.6, reached during the 2007-2008 and 2011 food crises, respectively. The Russia-Ukraine war, dry weather in several countries, and high prices of agricultural inputs such as fertiliser are responsible for lower food production and higher prices. Across the world, rising food prices and reduced purchasing power due to inflationary pressure are worsening food security in many countries. Globally, according to FAO, as many as 46 countries including Bangladesh require external assistance to meet their food import needs. As per the Global Report on Food Crises 2022, 193 million people in 53 countries and territories are facing food insecurity.
July-August dairy risk management calendar: high prices, slimmer margins
High expense costs, further exacerbated by inflationary pressures, have lowered the real value of high milk prices, notes Daniel Munch, economist with the American Farm Bureau Federation. Writing in a recent Market Intel report, Munch said any impending recession could spell additional trouble on the dairy demand front if consumers begin to spend less and go out less, actions that would be compounded by increases in milk production. By milk prices alone, the past year or so has gone well for dairy producers, Munch wrote. Between May 2021 and May 2022, the base Class I (fluid milk) price increased by $8.35 (49 percent), the Class II (soft products like ice cream and yogurt) price increased by $9.65 (59 percent), Class III (hard cheeses and whey) prices increased by $6.25 (33 percent), and Class IV (butter and powders) prices increased by $8.83 (55 percent) per hundredweight (cwt).
Sugar tumbles after Brazil cuts gasoline prices
October NY world sugar #11 (SBV22) on Tuesday closed down -0.57 (-2.94 percent), and Oct London white sugar #5 (SWV22) closed down -14.50 (-2.62 percent). Sugar prices Tuesday sold off sharply after Brazil cut gasoline prices. Petroleo Brasileiro cut gasoline prices at its refineries by -4.9 percent to 2.86 reais ($0.72) per liter, which may curb ethanol demand in Brazil and is bearish for sugar prices. Sugar prices on Monday rallied to 5-week highs on dollar weakness and a jump of more than +5 percent in crude oil prices (CLQ22). Strength in crude oil benefits ethanol prices and may prompt Brazil’s sugar mills to divert more cane crushing towards ethanol and less towards sugar, thus curbing sugar supplies.
Egypt seeks sources to fill wheat needs
Egypt’s General Authority for Supply Commodities (GASC), the country’s ’s grains buyer, announced on July 17 a tender for an unspecified amount of wheat from the United States, Canada, Australia, Argentina, and Brazil. With shipments from Ukraine – traditionally one of Egypt’s largest wheat suppliers – severely limited because of its war with Russia, Egypt has been aggressively looking to other sources to satisfy its wheat needs. In recent weeks, GASC has contracted 1.28 million tonnes of wheat from France, Romania, Russia and Bulgaria, which are scheduled to be shipped to Egypt from July through October. It also has inked trade deals with India, which would have been an unlikely source for imports in years past. Egyptian officials have indicated that the country needs to import at least 5 million tonnes of wheat in the 2022-23 marketing year. Egypt also is aiming to increase domestic wheat production.
Saudi Arabia reveals oil production capacity limits
Saudi Arabia, the world’s top crude oil exporter, will not have additional capacity to increase production above the 13 million barrels per day (bpd) it has pledged to have by 2027, Saudi Crown Prince Mohammed bin Salman told the leaders of the United States, the Gulf Cooperation Council (GCC) states, Jordan, Egypt, and Iraq at a summit this weekend. “We also stress the importance of continuing to inject and encourage investments in fossil energy and its clean technologies over the next two decades to meet the growing global demand, with the importance of assuring investors that the policies adopted do not pose a threat to their investments to avoid their reluctance to invest and to ensure that no shortage of energy supply would affect the international economy,” Crown Prince Mohammed bin Salman said in his address.
Rystad: US natural gas output to top 100 bcfd by end-2022
US natural gas production is expected to hit a record high of more than 100 bcfd by the end of the year, Rystad Energy analysis shows. Production growth in major US gas-producing basins, in addition to associated gas production in the Permian, will cement the country’s position as the world’s largest gas producer, stretching its lead over Russia. Within shale gas plays, the Marcellus, Utica, and Haynesville are set to contribute the most. Rystad Energy expects production from the Haynesville alone to grow by 2.6 bcfd this year compared with 2021, pushing annual output to more than 14 bcfd. Production from the basin is forecast to jump next year as well, reaching 17.2 bcfd by end 2023. The company noted, however, that growth in Appalachia basin remains entirely dependent on progress of the proposed Mountain Valley Pipeline, which faces significant legal hurdles. The recent surge in global natural gas prices is pushing US exploration and production companies to increase investment in an effort to take advantage of competitive breakeven costs. A well-documented supply shortage in Europe is pushing up prices on the continent amid efforts to ease reliance on Russian gas. Given the wide US and European price differences, shipping US gas across the Atlantic, even considering the pricey liquefaction process, is economically advantageous.