OPEC+ Crude production at lowest since August 2021
OPEC+ cut its crude oil production to a near two-year low in July as a major voluntary cut by Saudi Arabia took effect, according to a Platts survey by S&P Global Commodity Insights. The latest Saudi cut as well as disruptions in Kazakhstan and Nigeria more than offset gains in Iran and Iraq, contributing to an almost 1 million b/d fall in OPEC+ output month on month. OPEC’s 13 members pumped 27.34 million b/d, while Russia and eight other allies added 13.06 million b/d, for a total of 40.40 million b/d, the survey found. That was the group’s lowest since August 2021, when major cuts implemented during the pandemic were still being unwound.
The impact of weather on wheat production in Europe
Europe is currently experiencing heat waves and poor rainfall, which are expected to negatively impact wheat yields. According to the European Centre for Medium-Range Weather Forecasts, parts of Greece, eastern Spain, and southern Italy are facing severely high temperatures. As a result, the EU Joint Research Centre’s Monitoring Agricultural Resources unit has reduced its soft wheat yield estimates for the marketing year 2023-24. This decrease in wheat output could potentially lead to a rise in prices in the coming months and may impact Europe’s wheat exports during the season.
Egypt’s power cuts persist amid heat, declining natural gas production
Electricity cuts in Egypt are threatening people’s well-being, a rights watchdog said on Tuesday, while natural gas production is also down. Human Rights Watch said that the Egyptian government’s scheduled electricity cuts are putting people’s economic and social rights at risk. “Egypt’s government has long demanded implicitly that Egyptians sacrifice their civil and political rights in return for economic prosperity,” the group’s deputy regional director, Adam Coogle, said in a press release. “But electricity cuts dramatically reduce people’s ability to realize their rights, including food, water and health care.
Tea production positive in 2q
Tea production from April-June 2023 (second quarter) recorded a total of 74.25 Mn Kg, showing a positive variance of 4.28 Mn Kg vis-a-vis 69.97 Mn Kg recorded in the same period of 2022. Tea export revenue for the second quarter witnessed a marginal decline in comparison with previous year’s figure of Rs.101.29 bilion, against April-June 2023 of Rs.99.70 Bn. This was mainly contributed with the improvement in the LKR against the USD coupled with the decrease in quantity during the respective period. Total Production for the period stands at 134.42 Mn Kg , an increase of 1.49 M/Kgs vis-à -vis 132.93 M/Kgs of January-June 2022 said Forbes & Walker Tea Brokers (Pvt) Ltd said.
After ban on rice export, sugar may face curbs owing to low production
Traders are worried that sugar will be the next target now that rice exports have been banned by India. The ban, an attempt to control domestic prices by the government, has affected supplies globally. According to a Bloomberg report, sporadic rainfall received across India’s agricultural regions has caused worries about a shortage in sugar production. The potential deficiency will affect India’s export abilities. While the global sale of wheat and certain rice varieties has already been restricted to preserve supplies domestically and keep a tab on prices, this has led to a severe impact on food markets worldwide which were already suffering due to bad weather and the conflict in Ukraine.
Govt to increase coal production by year-end
The Energy and Mineral Resources Ministry plans to ramp up national coal production in the second half of 2023 following requests from local producers. Lana Saria, the ministry’s coal business development director said on Monday that miners with mining permits, including work contracts (PKP2B) and special mining permits (IUPK), had presented proposals to augment coal production in the 2023 work plan and budget draft. “There’s a possibility to increase the production, given that numerous coal companies are pushing for expanded production,” Lana said as quoted from Kontan.
Imports of pulses hit record $946m
Amid a looming foreign exchange crisis and a drop in local production, Pakistan made a record import of 1.344 million tonnes of pulses worth $946 million during FY23, surpassing the previous all-time high arrival of 1.266m tonnes ($709 million) in FY21. In January 2023, importers held a protest outside the State Bank of Pakistan’s head office against the non-clearance of over 6,000 containers of pulses at the port for the past two months, due to a dollar shortage and banks’ reluctance to approve import documents.
Weather hangs over sugar production
Well-known market analyst Frank Jenkins, president, JSG Commodities, said he believes US 2022-23 sugar supplies are larger than indicated in the US Department of Agriculture’s July World Agricultural Supply and Demand Estimates (WASDE) report, with 2023-24 production declining due to dry weather and deliveries above the USDA forecast, which means more imports will be needed from Mexico. The USDA estimates may be revised in the Aug. 11 WASDE. Mr. Jenkins estimated the 2022-23 ending stocks at 2,074,000 tons and the ending stocks-to-use ratio at 16.36 percent, compared to the USDA’s 1,841,000 tons and 14.45 percent, respectively.
Uncertainty over China’s crude steel production cuts further
The iron ore market remains volatile, with prices trending downward despite a soaring ferrous-related futures market at the end of July. The most-traded September iron ore futures contract on the Dalian Commodity Exchange (DCE) decreased by 1.6 percent to 834.50 yuan ($117) per tonne on Friday from the previous closing price of 848.50 yuan per tonne. By 6:19 pm Singapore time, the most-traded September contract on the Singapore Exchange (SGX) moved down by $2.97 to $106.80 per tonne, compared with the previous settlement price of $109.72 per tonne.