April 1, 2011 No.72,723 Rice industry asks what will bring...

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Quote of the Week“We shouldn’t necessarily fear higher rice prices.’’

Jonathan Calland, head of external affairs, Tilda p1

April 1, 2011 No.72,723

Rice industry asks what will bring forward much-needed new supplyBy Ian Hart, Madrid

QUESTIONS surrounding which origins would be able to provide large quantities of the right quality rice both in the short- and long-term dom-inated Rice Trade Outlook in Spain, Madrid.

In his opening address to proceedings, Darren Cooper, senior economist at the International Grains Council (IGC), noted that while bench-mark Thai 100% B rice prices have fallen by 1% over the past year against a 49% gain in the IGC’s grain and oilseed index, prices have “never returned to previous levels” seen before the 2008 price spike.

As a result, world production in 2010/11 is forecast to gain by 2.4% to 450.4m tonnes from 439.9m tonnes a year earlier. A concern for the world market though is that China (up 2.6m tonnes to 139.2m tonnes) and India (up 4.9m tonnes to 94m tonnes) will account for most of the absolute gains in output. The former exports little while the latter has an export ban on non-basmati.

Indonesia’s white sugar output is expected to be bigger after weather improves

FULL CONTENTS PAGE 2

IN THIS ISSUE

Pakistan could streamline its rice industry in order to keep up recent high export pace

Quality issues send Indonesian nutmeg into another sharp price rally

EU industry gets in a paddy over increasingly challenging market conditions

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KEY INDICATORSNAPSHOT

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-4.3%$ vs € 0.714Weds close

-1.2%$ vs £ 0.6196Weds close

0.2%stt

With expected gains in production outweigh-ing those in consumption for a sixth year, the stocks-to-use ratio will improve modestly to around 22%. Mr Cooper noted that 45% of in-ventories were held in China, but even so those held in the leading exporters were at “comfort-able levels”.

The IGC is currently predicting a small drop in world trade of rice to 30.3m tonnes from 30.5m tonnes in 2010 but higher than 2009’s 29.1m tonnes and the five-year average of 29.8m tonnes. A key question within this re-mains the Philippines though, which the IGC has pegged to import 1.4m tonnes but where authorities have claimed they could take as little as 850,000 tonnes. “Even at 1.4m tonnes that would leave a stocks-to-use ratio of around 11%, 10 percentage points below that of Asia. I leave you with the question, is that going to be enough?” said Mr Cooper.

On the export front, Mr Cooper said Thai-land’s exports in the final quarter of 2010 and into the first quarter of 2011 suggest that is the origin that will benefit from tightness of sup-plies in the likes of Vietnam and Pakistan. “At 2m tonnes in the first quarter, cumulative ex-ports are up 55% year-on-year,” noted Mr Cooper.

Extra Thai sales and lower demand from the Philippines are likely to see Vietnam’s exports decline to below 6m tonnes in 2011 from the record of more than 6.5m tonnes a year earlier

as the country basically sold out but this re-mains well above the five-year average. This is despite a general lowering of the minimum ex-port price since the end of last year.

Other factors to watch are improving Indian grain stocks (although the 2011/12 rice ones will depend on the outcome of the kharif crop) that could result in the country considering removing its ban on non-basmati exports; the degree to which floods cut into Pakistani exports (the IGC sees a fall of 35% to just below 2.5m tonnes in 2010/11) (see page 8); rising shipments by Cam-

bodia (see page 3) and Myanmar which have ex-ceeded those of China in recent years; the impact of a smaller, lower quali-ty US crop (see page 8);

and developments in the EU (see page 23).Mr Cooper noted that because of rising

wheat prices, the rice/wheat price ratio has narrowed to $184 a tonne from $335 a tonne a year ago – more reflective of the historical av-erage. Concluding, he said: “The rice market has learned to live without exports from India, formerly the second-largest exporter. Rice has been steady on generally bearish fundamentals but we’ve not had the structural problems wheat has seen.”

Jonathan Calland, head of external affairs at Tilda, pointed out that only 6% of global rice production is traded versus around 19% in wheat. “It’s a thin trade and susceptible to price shocks,” he said, noting how looking at production

Continued on p3

“The market has learned to live without exports from India, formerly

the second-largest exporter.”

Darren Cooper, senior economist, IGC

WORLD RICE MARKET

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370

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390

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410

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440

450

460Production (m tonnes)

Consumption (m tonnes)

Stocks to Use (%, right axis)

STOCKS IN KEY EXPORTERS (tonnes)

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35Pakistan USVietnam ThailandIndia Average

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Source: IGC

Source: IGC

The Public Ledger | April 1, 20112

CONTENTS

EDITORIAL

Managing Editor: Ian HartDeputy Editor: Julian GaleReporters: Amy Roskilly, Emile MehmetPrices: Matthew PenderedMarketing: Yelena KleynerProduction: Amy RoskillyEditorial Director: Chris HorsemanEditorial Team:+44 (0)20 7017 [email protected] [email protected] Services:+44 (0)20 7017 [email protected]

IS rice the forgotten commodity? There was a definite feeling at Rice Trade Outlook in Madrid that despite facing many similar challenges of how to increase production for a rising population in the developing world, the fact that prices only ended up 1% differ-ent from a year earlier , compared with stel-lar rises in wheat, maize and many others, meant rice just wasn’t “sexy” right now.

On prices alone, this might be the case, although ending the year flat does not mean the market has not been volatile. For one, prices dipped to $190 a tonne, rose back above $550 a tonne before settling back at $515 a tonne. An assessment of the Chicago Board of Trade’s rough rice futures shows volatility was at a three-year high in March. Anecdotally the same is true in the physi-cal markets. “I try to tell my buyers not to come to Dubai to discuss deals – let’s do it by email, messenger, telephone, whatever because as soon as others get wind of them being there the market jumps,” said one Asian supplier. “But they’ve got their corporate credit cards and travel budgets to max out.”

Farmers are also well known for overdoing it when responding to price signals. There are signs in the US, Europe and – impor-tantly – Asia that there will be a switch to wheat, maize, soya, cotton this year at the expense of rice.

As was seen in the 2008 price spikes, rice also tends to lag behind other markets. And it only takes one major problem in a market where the stocks-to-use ratio is low (especially when considering the bulk of inventories are in India and China) to spark a run-up in prices. Things are relatively com-fortable currently – but for how long?

Ian Hart - Editor - [email protected]

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Farnham Display Black- edited serif100c75m15y15k

Pantone Process E212

Gerwald Kras of Olam International notes that power in the pepper market is more and more in the hands of the sellers, a trend that is equally apparent in other sectors. See page 24.

THIS WEEK’SINTERVIEW

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MAIN NEWS 1-4

Rice industry asks what will bring forward new supply 1

Emerging Cambodia aims high with milled rice exports 3

Cocoa could flow as Ouattara force seizes San Pedro 3

FO Licht expects ‘sizeable’ rebound in sugar production 4

Canola crush margins slip to lowest level of 2011 4

SOFTS 5-7

Indonesia white sugar haul bigger after drier weather 5

Swaziland turns more plantings over to sugar production 5

Aged Cuba sugar sector struggling to hit crop target 5

Arabica to be balanced by low inventories, more output 6

Stalled sales see Vietnam’s coffee price weakening 6

Ghana cocoa output is racing ahead 6

Tea exports from India’s dry port hit by pest attack on crop 7

Egypt’s demand for tea saw massive increase last year 7

Brazilian coffee farmers eye cash aid for storage 7

GRAINS & FEED 8

Pakistan to streamline its rice sector to keep exports up 8

EU needs better farm management to cut high prices 8

Quality cuts US competitiveness 8

OILS & OILSEEDS 9

Smaller US soya area trims palm competition and prices 9

Yields overcome flooded crops to boost Brazil soya 9

Philippine coconut oil exports slow 9

MINORS 10-12

Quality issues send Indonesian nutmeg into sharp rally 10

February weather destroys Eastern Europe coriander 10

Long harvest sees cardamom drop 10

New US offers ease nearbys in very tricky walnut market 11

Australia to gain more from steady pecan production 11

“We shouldn’t necessarily fear higher rice prices.’’

Jonathan Calland - head of external affairs - Tilda

Rice industry asks what will bring forward much-needed new supply page 1

QUOTE OF THE WEEK

3The Public Ledger | April 1, 2011

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Emerging Cambodia aims high with milled rice exports

Rice industry asks what will bring forward supply

By Ian Hart, Madrid

CAMBOIA has the potential to be a greater force in the international rice market if it improves milling capacity and exports directly rather than smuggling paddy into neighbouring countries.

Production on a rough rice basis passed 7.5m tonnes in 2009/10 and could near 8m tonnes in 2010/11, according to the USDA, marking a re-markable come back after the country’s war years and leaving an exportable sur-plus above the 4m tonnes or so needed for local requirements.

“Typically rice goes across the border unprocessed. About 2.5m tonnes of paddy is thought to go to Thailand or Vietnam each year, with the former taking 1.5m tonnes although this is sensitive as it is technically illegal and is part of the border problems seen recently,” Bas Rozemuller of the International Finance Corpo-ration (IFC), which is helping develop the sec-tor, told Rice Trade Outlook.

However, direct exports have been growing because of better milling within Cambodia itself. These were 26,000 tonnes in 2009, 52,000 tonnes in 2010 and an expectation for 120,000 to 130,000 tonnes in 2011. “The government target is for 1m tonnes by 2015, which shows the po-litical support that this ‘white gold’ is getting. It will be a very big challenge given the infrastruc-ture and state of the milling sector,” he said.

While Mr Rozemuller thought that 500,000 tonnes might be more realistic by this point, Lim Bunheng, general director of Loran Import-Export, which is aiming to be the country’s top exporter, was assured it would be achieved, tell-ing The Public Ledger that this would not affect local consumption as there is an exportable sur-plus of at least 1m to 2m tonnes.

Although Thai rice is of better quality and has a better reputation in the market, Mr Rozemuller noted that Cambodia’s Phka Malis cost between $840 to $900 a tonne in September whereas the similar Thai Hom Mali grade cost $1,126 a tonne. “There’s an opportunity to promote a new product in the world marketplace,” he said. “One of the leading French supermarkets already has a Cambodia origin product on its shelves.”

Mr Bunheng said Cambodia was targeting the EU market, where it has duty-free access that is equivalent to €175 a tonne, Asian markets (especially those which have no duties under the ASEAN free trade agreement), as well

as Hong Kong/China, the US, New Zealand and elsewhere.

Mr Rozemuller stressed that although Cam-bodia’s advantage thanks to the Everything But Arms deal is due to run out later this year, it is only expected to be a procedural matter to get another five-year renewal.

One of the biggest challenges identified by the IFC is a lack of finance in the sector as only warehouses or mills can be used as collateral. “We’re now working on a scheme where paddy can be used instead,” said Mr Rozemuller.

alone there was no real reason for the 2008 price spike.

Rather it was bans, partial bans or just talk of bans on exports by India, Vietnam and Thailand and panic buying by the Philippines that drove the market up before one simple leaked report that the US would allow Japan to export a mere 300,000 tonnes sent the market plunging.

“Removing 10.5m tonnes of export potential when annual trade is only 29m tonnes – even for part of the year – caused disproportionate price rises,” he said. “Export bans provoke uncertain-ty and disruption, driving prices higher.”

Thus while Mr Calland thought switches in land use and improving yields could see rice play its part in bringing about the theoretical doubling of food production by 2050 (which he

noted was just 1.5% per annum), he said export restrictions and breaking existing contracts must become a point of debate at the WTO.

“Export restrictions hold down domestic rice prices which hurts domestic producers, it can also exacerbate the problem of tight world market sup-ply,” he said. “Public procurement programmes have a role to play in ensuring food security and avoiding shortages but they can distort markets.”

Overall, though, there will be concerns about how sufficient production will come forward if farmers are not incentivised. “We shouldn’t necessarily fear higher prices. They support in-comes by offsetting the smaller production of one year’s crop and provide increased incen-tives to plant more for next year’s harvest,” con-cluded Mr Calland.

Cocoa could flow as Ouattara force seizes San PedroBy Emile Mehmet

COCOA prices fell on Thursday as forces loyal to presidential claimant Alassane Ouattara seized the port of San Pedro, raising the prospect the flow of supplies may soon resume.

May cocoa on ICE Futures US fell to $2,952 a tonne, the lowest level for the front month since mid-January. Prices have fallen about 9% since Mr Ouattara’s forces began to seize towns in the western cocoa belt at the start of this week.

EU sanctions against Laurent Gbagbo, who has refused to step down since a presidential election last November which UN-certified re-sults showed he lost, have helped bring exports from Ivory Coast to a virtual standstill.

An EU diplomat said on Thursday that it would take “at least a few days” to exempt co-coa exports from San Pedro from the sanctions.

Premature market reaction?“I think people are putting out the flags a bit pre-maturely,” cautioned Gary Mead, analyst at VM Group, adding that Mr Gbagbo still appeared to have a lot of support in the largest city, Abidjan. “Until you have Abidjan the game is not over.”

Many believe a final assault to remove Mr Gbagbo from power could be very close and his choice to fight or flee may determine whether or not his country descends into a bloodbath. “The price should come down even more if the speed of the change is quick. If the speed of the change is not quick we could see it staying relatively high,” Mr Mead said.

San Pedro ships half the beans from the world’s top cocoa grower. Seydou Ouattara, a spokesperson for Mr Ouattara’s forces, said: “We have taken the port of San Pedro. Mr Gbagbo’s forces have all left. We are in full control.”

One San Pedro resident told a newswire: “Shooting started at around 9pm (on Wednes-day) then we saw the rebels’ vehicles drive into the town. Everyone’s staying indoors, but we’re still hearing a lot of gunfire.”

The disputed election was meant to draw a line under the 2002/03 civil war but has instead reig-nited it, as rebels who control the northern half of the country and now back Mr Ouattara to advance south into Mr Gbagbo’s territory from all sides.

They seized the official capital Yamoussoukro, in the centre, on Wednesday, and they have ad-vanced in the east towards the main city Abidjan, where analysts expect the fiercest battles will be. Mr Ouattara’s prime minister Guillaume Soro told French radio on Wednesday that Mr Gbagbo had just hours to leave power peacefully.

At least 472 people have been killed since the standoff began, according to the UN, and a hu-manitarian crisis is worsening, with 1m people displaced from Abidjan alone.

Continued from p1

CAMBODIAN RICE OUTPUT (000 tonnes)

0

1,000

2,000

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4,000

5,000

6,000

7,000

8,000

“Exporting 1m tonnes will be a very big

challenge.”

Bas Rozemuller, IFC

Source: USDA

4 The Public Ledger | April 1, 2011

MAIN NEWS



Barley sales to Saudi Arabia jumpSAUDI Arabia’s barley imports increased 11% year-on-year in the final three months of 2010 to 1.72m tonnes, the USDA’s Ri-yadh attache said. Of this, Ukraine provided 381,000 tonnes, or 31%, while Germany and Scandinavian countries supplied 16% and 11% respectively, the USDA said. Like many countries in the Middle East, the kingdom has been moving to boost its grain imports this year in order to dampen domestic food inflation and ensure political stability.

End of harvest sees cocoa arrivals slipBRAZIL’S cocoa arrivals fell sharply in the last week as the harvest tailed off in top growing state Bahia, but a decrease in deliveries in other areas may be due to lower prices, said Thomas Hartmann, a local cocoa analyst. Total Brazilian cocoa arrivals, includ-ing imports, reached 3.93m 60kg bags from May 1, 2010 to March 27, up 15% from the same period of last season, according to data from the Bahia Commercial Association.

Half of planned maize sales completeZAMBIA has exported nearly half of the maize it plans to sell to countries in the Southern African Development Community (SADC) region this year, the state-run Food Reserve Agency (FRA) said. Mwamba Siame, a spokesperson for the FRA, said the country has so far exported 238,000 tonnes of the planned 500,000 tonnes of maize into the SADC.

Kenya tea prices creeping upTHE average price of Kenya’s top grade tea edged higher at auction for the second week running, rising to an average $3.40 per kg from $3.36 a week earlier, brokers said on Wednesday. Mombasa-based African Tea Brokers said in its weekly market report that 20% of the 130,180 packages (8.39m kg) on offer were left unsold.

South African sugar crop shrinkingSOUTH Africa’s 2010/11 sugar output is estimated at 1.909m tonnes, slightly down from a previous forecast of 1.911m tonnes, the latest estimate by the South African Sugar Association showed on Monday. The sugarcane crush forecast was unchanged at 16.016m tonnes.

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NEWS IN BRIEF

By Julian Gale

INCREASED planting of cane and beet due to a sharp rise in prices for sugar should boost global production in 2011/12 if the weather is favoura-ble, analyst FO Licht said on Tuesday.

This larger supply, including expectations of a bigger harvest in Brazil’s centre-south belt, should contain sugar prices in the next few months, after futures hit 30-year highs earlier this year.

“There could be a sizeable increase in sugar output in 2011/12,” said Stefan Uhlenbrock, sen-ior analyst at FO Licht at its event in Sao Paulo.

He said high sugar prices in recent years pro-vided a strong stimulus for planting cane and beet in practically all major producing countries, es-pecially Russia, Ukraine and Indonesia.

However, the effect was negated by bad weather in 2010 that cut 8.5m tonnes from the output that had been forecast early in the season (October to September).

FO Licht estimated global sugar output in 2010/11 at 166.9m tonnes, up 5% from 158.6m tonnes in the previous season. The increase would have been higher still if drought in Brazil and excessive rains in other major producer Australia had been avoided.

FO Licht does not have an estimate for 2011/12 output so far. It said if producing coun-tries repeated their past production records in 2011/12, this would equate to an increase in sugar output of 16.5m tonnes. This was unlikely to be achieved, however, after last year’s weath-er problems, Mr Uhlenbrock said.

James Kirkup, head of sugar brokerage at ABN AMRO, agreed that it was a fair assump-tion that high sugar prices should help spur a rise in output in 2011/12. “We are expecting a supply response to the high prices we have seen over the past 12 to 18 months. Also, there is an expecta-tion that weather, which has been calamitous for quite a lot of the global agri production, will per-haps normalise,” he told The Public Ledger.

Mr Kirkup noted that the Australian Bureau of Agricultural and Resource Economics is ex-pecting the La Nina phenomenon to wane over coming months, which suggests a more favour-able weather situation for sugar and other crops.

In terms of Australian sugar specifically it could take two crop cycles to recover from the impact of Cyclone Yasi, Mr Kirkup cautioned. However, other origins might see an earlier re-bound in production. For example, higher plant-ings should help Russia lift output from the drought-reduced levels seen in 2010.

Mr Kirkup added: “With the supply pipeline very low or even empty in some places I am not expecting the market to fall off the edge of a cliff as we go into a statistical supply and de-mand surplus because we need to replenish re-serves. So prices will probably hold up in the medium term, despite an evident supply re-sponse and a return to surplus.”

Slight slowing in demand growthFO Licht expects the pace of growth of global sug-ar consumption to ease slightly over the next few years from the current annual rate of 2.6%, but pro-jected world demand in 2020 would reach 200m tonnes. “We would need a second centre-south of Brazil,” Mr Uhlenbrock told delegates, adding that the country is the only one that would have land available to meet such a demand. “The world’s reli-ance on Brazil is sure to continue growing.”

FO Licht forecast that Brazil’s sugar output would rise almost 3% to 42m tonnes (raw equivalent) in 2011/12 from 40.8m tonnes in 2010/11, while production of ethanol would rise to 25.1bn litres from 24.9bn litres.

Last week’s start of the 2011/12 cane harvest should help lower the price of ethanol in Brazil. It has risen to its highest level in five years amid scarce supplies during the interharvest period.

The US would see its output of the biofuel rise to 50.7bn litres in 2011 from 50.1bn litres last year, FO Licht said.

FO Licht expects ‘sizeable’ rebound in sugar production

Canola crush margins slip to lowest level of 2011By Brent Harder, Winnipeg

WITH Canada’s canola (rapeseed) values on the rise last week, crush margins have taken a hit, falling to their lowest point in the current calen-dar year.

Bill Craddock, a southern-Manitoba based trader and producer, said last week was a bad one for those in the crushing sector. “There has been strength in the canola, relative to soya oil and soyameal,” he said. “The Canadian dollar has been up a bit to, as opposed to where it had been.”

Mr Craddock said the decline in the margins is likely to take those in the domestic crushing sector out of the market for the time being,

which will probably have a negative effect on canola values.

“Demand won’t be there from the crushers. They should have bought up good amounts of quantity so they don’t have to chase it when it is higher like it is at the moment,” he said. “We may have seen our highs for canola futures for the next little while.”

Although margins aren’t as strong as they have been, crushers would still be making mon-ey, according to Mr Craddock. Canola crush margins were at C$77.00 (US$79) a tonne above the nearby May contract on Thursday 24 March, according to ICE Futures Canada. That was C$11.99 a tonne lower than a week earlier.


NEWS | SOFTS

Aged Cuba sugar sector struggling to hit crop targetCUBA’S dilapidated sugar industry will strug-gle to produce 1m tonnes of raw sugar this sea-son, with only around 800,000 tonnes harvested and less than a month of ideal yield weather re-maining, according to official media.

“The harvest is at more than 80% of plan,” a television spot on the national news said.

Officials have repeatedly stated the harvest will weigh in at a bit less than last year’s record low 1.1m tonnes due to a lack of cane. Reuters estimates current tonnage at just over 800,000 tonnes, based on local reports and sources.

The season stretches from December into May, but yields start to decline by mid-April as the hot and humid summer begins.

Weather has beem ‘ideal’The weather has been ideal this year and there has been little rain, although nine of the 39 mills that opened have performed under the 68% of capacity planned, according to a recent report in Granma, the Communist party newspaper.

Just eight of Cuba’s mills were built after the 1959 revolution, the last in the 1980s.

Yields have in general been good, averaging between 10% and 11% of cane ground, accord-ing to official media. “Up to now the harvest has presented a situation very different than last year to the benefit of the economy,” the week-end television spot said, referring to efficiency.

Eastern Granma province and Central Sancti Spiritus province have already completed their plans, with two more provinces out of 14 ex-pected to do so by early April, reflecting both greater efficiency and less cane to work with.

By Julian Gale

INDONESIA’S white sugar production will in-crease by 16% this year on drier weather, with planting rising by 3.5%, the Indonesian Sugar Association (AGI) said on Monday.

Indonesia produced about 2.25m tonnes in 2010 after heavy rains hit crops, leading to government permits for 450,000 tonnes of imports, but this year output is seen jumping to about 2.6m tonnes, Farukh Bakrie, chairman of AGI, told Reuters.

Domestic output is only used for household demand and home-based industry. The AGI sees white sugar demand steady at around 2.7m tonnes this year – a level that would reduce the need for imports but not remove them.

“We were self-sufficient before but not any-more,” Mr Bakrie said. “They want to go back to that, but it is not easy.”

The association’s output forecast is in line with the Agriculture Ministry, which has revised down white sugar production for this year by 31% to 2.69m tonnes from an initial forecast of 3.88m tonnes.

Prolonged rains in Java island, which sup-plies 60% of Indonesia’s sugar output, delayed the domestic crushing season from May to June last year, and reduced the sugar content in cane, resulting in lower production. Mr Bakrie said new planting was estimated to increase by 15,000 hectares to 440,000 hectares this year.

“The land is already there, but how to find the land (is a problem),” he said, adding it was easier in the days of former autocratic leader Suharto.

Investors such as Wilmar and the Rajawali Group are aiming to grow sugarcane in the gov-ernment’s planned food estate in easternmost

province Papua, as they expect a continued shortfall in Indonesia’s sugar supply.

Mr Bakrie said there is an urgent need to overhaul the Indonesian sugar industry, cur-rently split between numerous government de-partments, to make it more coherent and to boost production.

Lobbying for stronger government bodyHe added that AGI was lobbying to streamline and strengthen government body the Indonesian Sugar Council (DGI), which would then report to the president and be responsible for all sugar policies.

“We have an opportunity now,” said Mr Bakrie. “I want to re-organise the council,” he said, citing a lack of decision making at the body.

Total Indonesian consumption, including large-scale industry, is about 4.5m tonnes, according to the AGI. The country imports more than 2m tonnes of sugar – both raw and white – to meet household and industrial consumption.

The government issued a permit to import a total of 450,000 tonnes of white sugar for house-hold consumption until the cane crushing season starts in May this year, although so far state firms have only imported less than 100,000 tonnes.

Higher import demand can help bolster world prices. May white sugar in London hit a record high in February on supply worries in Australia, but are now down 8% this year as investors cut risk exposure.

Indonesia was once the world’s second larg-est sugar exporter after Cuba in the 1930s. But ageing sugar mills, a vast network of smallhold-ers and an influx of cheaper imported sugar put pressure on local production.

Indonesia white sugar haul bigger after drier weather

Swaziland turns more plantings over to sugar productionSWAZILAND’S sugar production is likely to jump by a quarter in the next five years, due to more land being put under cultivation, accord-ing to Mike Matsebula, chief executive of Swa-ziland Sugar Association.

Mr Matsebula told Reuters the southern Afri-can producer of the sweetener will also raise production by about 11% this year.

“We are currently producing, in round num-bers, 600,000 tonnes (per year). In five years, we will be producing an additional 150,000 tonnes at least,” he said on the sidelines of a conference on sugar in the Kenyan capital Nairobi.

Sugar is the second biggest source of foreign exchange for the country, which is the third-largest sugar producer in Africa.

“More land is being brought under cane. There are at least two major irrigation projects, which are intended to provide water for more cane that is going to be cultivated,” Mr Matsebula said.

He put the new land to be planted with sugar at 12,000 hectares in the next five years and 1,000 hectares this year, on top of the 44,000 hectares already under cultivation.

Although it has low lying lands with good soil and a warm climate ideal for sugar growing, a drought cut Swaziland’s output to 582,000 tonnes last year from just over 600,000 tonnes in 2009.

However, that will also serve to spur the ex-pected jump in production this year, Mr Matse-bula said. “We are starting from a lower base than it would have been the case otherwise,” he said.

Prospects for exportsSwaziland exports half of its sugar output to east Africa and Europe, while the rest is consumed locally and in the Southern Africa Customs Un-ion, under the Southern African Development Community, which is treated as a domestic mar-ket.

“We are investigating west Africa and we are doing so jointly as the SADC sugar industries because as an individual country we can’t com-pete with the present supplier to west Africa be-cause of distance and other logistical considera-tions,” Mr Matsebula said.

However, to get to that market, SADC will seek preferential terms to compete with other suppliers, mainly Brazil, which enjoys low freight costs due to bulk-shipping, he added.

“For us to be able to really exploit the west Af-rican markets there has to be preferential arrange-ments given by west Africa,” Mr Matsebula said.

Swaziland has not benefited from the jump in the international price of sugar. “Because you have long term contracts, then you are not able to benefit from those spikes ... we have only benefited a little bit where we were able to move uncommitted sugar to the world market includ-ing east Africa,” Mr Matsebula said.

WEEKLY SOFTSSNAPSHOT

ICE RAWS No.1125.94¢ per pound, Weds close

-13.7%LIFFE WHITE669.40$ per tonne, Weds close

-11%ISO DAILY24.03¢ per pound, Weds close

-15.4%ISO 15-DAY27.33

(Moving average) ¢ per pound, Weds close-3.7%

KINGSMAN DAILY 710.00$ per tonne, Weds close

-11.6%ss s ss

Related stories at www.public-ledger.com/softs


NEWS | SOFTS

Stalled sales see Vietnam’s coffee price weakeningVIETNAMESE coffee prices dropped nearly 6% this week on limited domestic sales as spec-ulators held back stocks to wait for prices to re-bound.

Most coffee farmers have sold out their stocks to export firms and buying agents, who are bet-ter financed and often hold back beans for spec-ulation, as Vietnam has nearly ended the first half of its 2010/11 coffee crop.

“Vietnam now still has around 20 to 25% of the crop left in the country,” a trader in Ho Chi Minh City said after conducting a field trip to survey on production in the Central Highlands. As such, the current stock level in the country would be equivalent to 3.95m to 4.94m 60kg bags, going by a crop output of 19.75m bags found in a Reuters poll on March 1.

Coffee exports between October 2010 and this month, the first half of the 2010/11 crop year, could reach an estimated 13.32m bags, ac-cording to government statistics, up 28.4% from the corresponding period a year ago.

“While export prices fall, domestic prices are still high and there is much speculation now,” another trader at a foreign company in Ho Chi Minh City said. He estimated the current stock at 6.67m bags, half of which was in the hands of foreign firms operating in Vietnam, while an-other 1.67m bags are kept by exporters and the rest held by farmers and speculators.

Hold stocks in case of devaluation“Rich people do not like to sell (coffee) now, they are waiting for prices to rise,” the first trader said, adding that fears the government may move again this year to devalue the currency lead many to hold onto physical assets like coffee.

Vietnam conducted a major devaluation of the dong, its non-convertible currency, by 8.5% against the US dollar in February.

The market in Vietnam, the world’s top ro-busta producer, has switched to using London’s July contract for pricing as roasters have their purchase well covered for May, traders said.

Discounts narrowed to $60 a tonne on Tues-day from $70 a tonne on Monday, placing Viet-namese robusta grade 2, 5% black and broken at $2,346 to $2,356 a tonne fob, about 6% below $2,463 to $2,533 a week ago. On domestic mar-kets, robusta eased to between dong47.3m and dong47.6m ($2,267 to 2,281) a tonne on Tues-day in the largest growing province of Daklak, from dong47.5 to dong48m early last week.

Farmers in the Central Highlands coffee belt have been watering trees during the dry season. Several unseasonal rains earlier this month have helped them save the watering costs, traders said.

The rainy season would arrive in the Central Highlands in early May as usual, state forecast-ers said this week.

By Emile Mehmet

ARABICA coffee prices, which have recently been at around three-decade highs, are likely to stay within a range of $2.50 to $2.70 per pound in the coming years due to dynamic consump-tion, low inventories and an uptick in output, Colombia’s coffee federation said on Monday.

Output in Colombia, the world’s number three coffee exporter, should recover to between 9m and 10m bags in 2011, depending on the ex-tent of upcoming rains, said Luis Munoz, head of Colombia’s coffee growers’ federation.

It also said it has not yet seen any signs that the disaster in Japan is affecting demand. Re-garding the health of the crop, it said 65% of the coffee trees remain vulnerable to fungi.

The coffee futures market has doubled in value in a sustained rally that began in June 2010 with much of the latest push that has seen coffee prices hit a 34-year high this month being driven by a scramble for high-quality beans.

“Analysts generally agree that mild, washed Arabicas ... have possibly found a new floor (of) two dollars,” Mr Munoz said. “That floor is found in a market with dynamic consumption, production that is starting up and low invento-ries, prices should be in a band where they’ve been, around $2.50 and $2.70, and that should (continue) in the coming years.”

Tight supplies in Colombia, the world’s top producer of high-quality washed arabica beans along with another top producer Brazil, were the main impetus for a spike in Arabica prices last year that has continued into 2011.

Higher prices and margins have squeezed ex-porters and importers, forcing them either to take on more risk by abandoning hedges or to pony up

hefty financing costs. Colombia was hit by bad weather, tree renovation and pests in the previous two years, cutting output by about a third of its norm. This year’s crop is forecast to rebound al-though still below historical averages of 11m bags.

“Colombia has to recover to its normal levels ... (2011) could be between 9m and 10m bags, ap-proximately. It will depend a little also on how the weather behaves in the next few months,” Mr Mu-noz noted. “The rainy season could affect the cof-fee. That’s why one of our rescue programmes is to protect output at this stage between April and June. There are two umbrellas to protect it, pro-mote fertilization, 20% more than other years, and control very well the spread of roya (fungus).”

Better floweringBright sun in main Colombia coffee areas has boosted flowering this year – a key process for predicting the main harvest at the end of 2011. But heavy downpours predicted by climatologists in the coming months may still drench trees.

Abrupt moves from dry weather to strong rains can result in fungi, Colombia’s agriculture insti-tute says. “About 65% of the country isn’t reno-vated (for diseases). We have a challenging goal of renovating around 120,000 hectares annually,” Mr Munoz said, adding Colombia has 900,000 hectares of coffee and expects to have 1m hec-tares under cultivation in the next four years.

“If we renovate 120,000 hectares in the com-ing years, we’ll achieve more than 90% of cof-fee with resistant varietals, that would be ideal and Colombia would be at a production level of 14m bags.” He added that Colombia was look-ing to tap more markets in Eastern Europe and Asia, and that it had broken into Australia.

Arabica to be balanced by low inventories, more output

Ghana cocoa output is racing aheadGHANAIAN cocoa production is running near-ly 43% higher than last season, according to of-ficial data released on Tuesday.

The boost could ease the impact of supply disrup-tions from top grower Ivory Coast.

Declared purchases by private cocoa buyers to Ghana’s industry regulator Cocobod reached 734,150 tonnes by March 17 from the start of the season in October – 43% over the same pe-riod last year and also well above the roughly 632,000 tonnes produced during the full 2009/10 season, the data from Cocobod showed.

Cocobod said this month it had raised its tar-get for full-season purchases to a record 850,000 tonnes from 750,000, citing favourable weather and improved husbandry.

Analysts have said the escalating conflict in Ivory Coast could pad the Ghanaian figures by spurring massive cross-border smuggling, though

Ghanaian officials have said they have seen only limited volumes of smuggled beans so far.

Ghana is hoping to further raise its cocoa pro-duction to 1m tonnes per year by the 2012/13 season and may be able to hit between 850,000 to 900,000 tonnes during the 2011/12 season, Yaw Adu-Ampomah, Cocobod’s deputy chief executive said on Tuesday.

“We could get very close to the 1m-tonne tar-get,” he said, adding that an official forecast for 2011/12 was not yet ready. He said Cocobod expected to raise $2bn through syndicated loans in September to fund next season’s cocoa crop purchases.

Some 7,544 tonnes of purchases were record-ed in Ghana during the week to March 17, the 24th of the 33-week main crop, according to the Cocobod data, marking a decline from 11,917 tonnes the week before.


ICE ARABICA264.55¢ per pound, Weds close

-8.5%LIFFE ROBUSTA2400.00$ per tonne, Weds close

-4.8%ICO DAILY220.41¢ per pound, Weds close

-5.1%ICE COCOA3260.00$ per tonne, Weds close

-10.7%LIFFE COCOA 2102.00£ per tonne, Weds close

-6.6%t t

Related stories at www.public-ledger.com/softs

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NEWS | SOFTS

Tea shipments from India’s dry port hit by pest attack on cropBy Julian Gale

INDIAN tea crop losses due to pest attack have taken their toll this year on the inland container depot at Amingaon — the only dry port in the region —as 7m kg of tea could not be sent.

Sources said 2,285 containers were sent in 2010/11, compared with 2,954 in 2009/10, which was the highest in the history of the in-land container depot since its inception.

Production in the Brahmaputra Valley from January to Decem-ber 2010 decreased by 16m kg to 420m kg, because of incessant rainfall early in the sea-son leading to pest attacks, particularly in up-per Assam.

The highest number of containers, sent from the inland container depot was by McLeod Rus-sell, which sent 1,572 containers, followed by Apeejay and MK Shah Exports, which had sent 336 and 224 containers respectively.

In 2009/10, McLeod Russell had sent 2,273 containers. The rail-linked depot is under the Container Corporation of India.

Gillanders Arbuthnot, which had never sent tea from the depot, made its debut this year by sending six containers.

Nine companies are currently sending tea from the depot. Tea is mainly sent to the UK, Europe and West Asia. Other countries where tea is sent are Sri Lanka, the United Arab Emir-ates, Canada and the US.

Since 1986, when the depot became opera-tional, 50,121 kg of tea was shipped.

Huge investment has been made by the Con-tainer Corporation of India, which is looking

after the depot to improve facilities so that more tea could be sent. “Every segment in-volved in despatching tea has been hit,” a source said.

Industry officials said more companies should use the route to export their tea for better use of the facility.

A number of shipping lines are involved in exporting tea, with the Shipping Corporation of

India shipping the most — 1,135kg.

The increase in de-duction from agricul-ture income on tea ex-

ported from the inland container depot at Amingaon from Rs1 ($0.02) per kg to Rs5 per kg of tea under the Assam Agricultural Income Tax Act, 1939, has helped tea produced in the state to remain competitive in the international market, which is encouraging companies to use the facility.

A tea industry official said although it has done well in the quality and price front, the export tar-get of 200m kg was unlikely to be met and was significantly down by 8m kg to 190m kg.

“We, therefore, will have to continue to strive to meet our export targets by producing more orthodox tea,” the official said.

He said it was imperative to continue the manufacture of good Assam orthodox to meet the growing international demand as this would also help in meeting the export targets, since most importing countries — with the exceptions of Pakistan and Iraq — prefer orthodox teas to crush, tear, curl varieties.

The total turnover of the tea industry in As-sam is about Rs50bn and another 1m people are dependent on this industry in the state, whether for employment or services.

Brazilian coffee farmers eye cash help for storageBy Emile Mehmet

COFFEE farmers may get financial assistance to store beans, according to Marcos Pinta Gama, Brazil’s permanent representative to internation-al organisations in London.

Financing is being discussed at International Coffee Organisation (ICO) meetings this week in London, Mr Gama said on Wednesday.

“We will explore financing possibilities and dis-cuss problems faced by small and medium-sized coffee producers, especially the issue of storage,” Mr Gama said. “That will allow stocks to be kept in producing countries and not in consuming nations.”

Brazil’s coffee production was 54.5m bags last year, according to the USDA. “Brazil is already the second largest consumer and according to es-timates it will (overtake) the US, the largest con-sumer, in four years,” Mr Gama predicted.

Can’t rely on exports“Exports only do not constitute guaranteed rev-enue to producing countries,” he said. “It’s very important to develop the domestic market and Brazil is an example to other producers.”

Increased usage in the South American coun-try as well as in other developing nations may have “some impact over future stocks,” said Mr Gama. Stocks in producing nations are currently at 13m bags, the lowest since ICO records began.

Brazil’s government is seeking to improve the quality of coffee produced in the country. “We are investing a lot in fine cups,” he said.

The acceptance of beans from Brazil in the New York contract on ICE Futures US may be a “stabilising factor” to prices, Mr Gama noted. Brazilian beans will be included in the New York contracts from 2013.

EGYPT recorded a substantial boost in its im-ports of tea in 2010, turning to Kenya, India and Sri Lanka for the bulk of its requirements.

Customs data shows that the key global buyer purchased a total of 138,978 tonnes of tea last year, 58.40% up from the volumes it acquired in 2009.

One UK trader observed that this reflected a general ongoing upturn in tea consumption in Egypt, along with a rising population.

The volumes imported from Egypt’s top sup-plier Kenya were up 51.54% to 118,069 tonnes. The UK trader noted that with Egypt being a ma-jor player at the Mombasa tea auctions it was not surprising to see increases of this magnitude.

Purchases from India surged by a massive 182% to 8,077 tonnes.

The UK trader remarked that the volumes im-ported from India can fluctuate from year to

year according to when the flow of supply filters through from the Asian producer. In addition, Egypt’s purchases can switch between its pre-ferred origins according to which is offering it the best price at the time.

Imports from Sri Lanka escalated by 248.51% to 4,984 tonnes. The UK trader suggested that alternative origins would probably have pro-vided better value for money and Kenya would have been using Sri Lankan supplies as a “top up” – i.e. to supplement its other options.

There was also a significant advance in Egypt’s imports from Indonesia, which gained 146.46% to 2,047 tonnes. “They (Indonesian teas) are fair-ly interchangeable with other African origin teas, depending on value again. They also have more CTC (crush, tear, curl) teas that will suit them (Egyptian buyers),” the UK trader commented.

Egypt’s tea imports slowed down this Febru-ary due to civil unrest in the country, so it is anticipated that overall volumes in 2011 could end up slightly lower than those of 2010.

Egypt’s demand for tea saw massive increase last year


ICCO DAILY3283.68$ per tonne, Weds close

-9.6%MOMBASA3.31$ per kg, Weds close

-0.6%COLOMBO365.00LKR per kg, Weds close

-6.4%CALCUTTA105.00INR per kg, Weds close

0%CHITTAGONG 137.50BDT per kg, Weds close

-15.4%t tu

EGYPTIAN TEA IMPORTS (tonnes) 2008 2009 2010

Kenya 48,817 77,911 118,069India 6,150 2,864 8,077Sri Lanka 1,133 1,430 4,984Indonesia 836 831 2,047UAE 20 96 1,036Malawi 190 760 962Rwanda 56 1,190 935Vietnam 31 274 932China 123 50 479Zimbabwe 274 0 446Others 711 2,333 1,011Total 58,341 87,739 138,978Source: Central Agency for Public Mobilisation and Statistics

“We will have to continue to strive to meet our export targets.”

Indian tea industry official

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NEWS | GRAINS & FEED

Pakistan looks to streamline its rice industry to keep exports up By Ian Hart, Madrid

PAKISTAN could restructure its rice industry to better provide the foundation needed to grow more and improve quality in order to sustain higher exports in the long-run.

Samad Khan, chief executive of Engro Ex-imp, told Rice Trade Outlook in Madrid, that cutting out the middleman between farmer and millers would help improve finance for farmers, traceability and other factors.

Pakistan produces rice on 2.9m hectares of the 23.8m hectares sown to all crops, with 1.4m hectares of this focused on basmati, which grows best in certain areas of Punjab.

The country has seen strong exports of late, partly because of pesticide issues that have hurt Indian exports and partly because of improved parboiling of coarse rice at 200 or so plants that is then sold to the Middle East and Africa.

Following floods in Pakistan, net farmer in-come for coarse rice leapt to $368 a hectare from $103 a hectare, while the extra demand for basmati saw returns double to $428 a hectare. Yet, rice still faces competition – especially in the non-core basmati areas of Punjab – from cotton where returns soared to $1,583 a hectare from $403 a hectare.

Thus, while Mr Khan expected basmati exports to remain steady at 1m tonnes, the weather prob-lems could curb non-basmati exports to 1.3m tonnes from 3.6m tonnes (milled white basis).

“Pakistan’s share of the EU basmati imports jumped from 30% to 48% because of India’s prob-

lems,” he said. “But if you only consider the sup-ply and demand factors, there is easily 150,000 tonnes of potential exports that Pakistan could maintain that. It might depend on the margins from the EU versus those from the Middle East.”

Mr Khan is a proponent of a farmer to mill mod-el rather than farmer to market one, which he said can cause fungal growth if held for four or five days. “It would also help traceability and avoid future problems with pesticide residues,” he said.

Revival of pesticide problemsOne Pakistani delegate at the conference ex-pressed concern about the introduction of ge-netically modified crops (such as cotton) and increasing use of pesticides that risk causing contamination problems. “We have had pesti-cide problems before and got rid of them,” he said. “Now multinationals and other large agro-chemical firms are forcing this on us again.”

Overall, Mr Khan said that there is a need for farmers to earn more, but that higher absolute prices can erode margins all down the chain. Thus an alternative is to help farmers improve their yields via better seeds (which would also improve milling yields), crop inputs and farm management.

“Contract farming would be interesting to get the investment in the supply chain as currently the lending for farm inputs is done by the mid-dlemen but the mills under the system could go to the banks,” said Mr Khan. “It is not easy but I expect in the next four or five years to see more of these initiatives.”

EU needs better farm management to cut high pricesEU grain farmers have said that a poor supply response to strongly rising prices shows that measures must be taken to improve market man-agement and rein in costs of production.

New cereals figures from Copa-Cogeca, which encompasses producers’ unions from across the EU, suggested that total grain pro-duction for 2011/12 would rise by a modest 2.4% to 282.1m tonnes.

Copa-Cogeca said wheat production in the EU, the world’s largest growing region, is set to climb 2.3% this year to 138m tonnes from 134.9m tonnes but this was actually down to ex-pectations of better yields in Germany and the UK, with overall planting to the grain down 0.8% to 25.6m hectares.

“Producers are squeezed by high input costs,” Arnaud Petit, director and cereals specialist at Copa-Cogeca, told The Public Ledger. “The ex-pected rise in production is mainly due to yields and not area. The main concern for the coming campaign is costs: fertilisers are more and more difficult to predict, not just because of the energy price but the lack of transparency in the market.”

There is a feeling among farmers, which can relatively easily lock in prices, that a similar pro-cess is needed on the inputs side. This would be more difficult for fertilisers and other inputs but Mr Petit noted that better co-operation and clarity be-tween EU farmers and input providers would help stem a slide in acreage that is bad for both sides.

Longer-term, Copa-Cogeca wants stronger market management under the Common Agri-cultural Policy to dampen volatility in the phys-ical markets. Mr Petit said that if the safety net of a public management system which provides a fixed minimum price in Europe was taken away it would increase volatility. “Direct pay-ments to farmers must continue in the future to help farmers cope with the increasing volatili-ty,” the group said.

AN improvement in the quality of the US rice crop will be vital if the country is to be competi-tive on export markets in the coming year, ac-cording to Liza Konnert Rendon, analyst at TRC Trading.

US exporters face increasingly tough compe-tition from Brazil and Uruguay, which both have produced bumper crops and improved quality.

By contrast, the US is likely to rein in its pro-duction this year by up to 40% from its past big but low quality crop as other options such as wheat, maize, soyabeans and cotton provide farmers with better returns.

US analyst First Grain most recently project-ed a 20 to 30% drop, Informa Economics gave a figure of a 12% fall to 3.2m tonnes, while the USDA is set to bring out its first figure on March 31, although many believe it to be conservative.

There are decent ending stocks in the US but concerns surround quality. Ms Konnert Rendon told delegates at Rice Trade Outlook in Madrid that some old crop might be kept on farms and

some blended into the new crop.One broker attending the event saw it as in-

evitable that the old crop supplies would be blended into the new crop, potentially reducing the high quality that is needed to compete with Brazil and Uruguay.

Another source told The Public Ledger that concerns were so great over the effect on quality that some are putting into the contract with farmers that supplies can only be new crop, but that this would probably carry a premium.

The US has seen some improvement in its exports to the EU (notably the UK) following the GM contamination problems that saw a slump from the traditional level of around 330,000 tonnes and now says LL601 has been eradicated from the commercial supply. Yet, even though the EU is easing its zero tolerance policy on GM crop contamination for feed, it is likely to be a while before a similar 0.01% level is applied to food. “We expect the EU will continue to be quite conservative,” said Ms Konnert Rendon.

Quality of US rice will be paramount

WEEKLY GRAINSSNAPSHOT

CBOT WHEAT667.75¢ per 60-pound bushel, Weds close

-11.4%MATIF WHEAT207.00£ per tonne, Weds close

-13.8%CBOT MAIZE632.75¢ per 56-pound bushel, Weds close

-8.3%THAI 100% RICE515.00$ per tonne, Weds close

0%CBOT SOYAMEAL 345.80$ per short ton, Weds close

-1.5%t

EU-27 CEREALS AREA AND YIELD 2010/11 *2011/12 % change

Soft WheatArea 22,993.9 22,903.0 -0.4%Yield 5.5 5.7 3.1%Durum WheatArea 2,862,4 2,738.8 -4.3%Yield 3.0 3.0 0.7%Total WheatArea 25,856.3 25,641.8 -0.8%Yield 5.2 5.4 3.2%BarleyArea 12,398.3 12,341.1 -0.5%Yield 4.3 4.3 1.0%MaizeArea 7,967.2 8,568.0 7.5%Yield 6.9 6.9 -0.6%TotalArea 56,257.9 56,371.1 0.2%Yield 4.9 5.0 2.2%Source: Copa-Cogeca (*Estimates)

Related stories at www.public-ledger.com/grains

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NEWS | OILS & OILSEEDS

Yields overcome flooded crops to boost Brazil soyaBRAZIL looks set to turn out a record soya crop in the 2010/11 season thanks to higher yields and despite the loss of some produce to floods in the centre western soya belt, forecaster Agro-consult said on Tuesday.

The soya crop, now being harvested, should produce around 72.7m tonnes, the local consul-tancy said, raising its previous estimate of 72m tonnes in February.

Brazil is the world’s number two soya export-er after the US. Excellent productivity in south-ernmost state Rio Grande do Sul and in Parana would more than compensate for the flooding in Mato Grosso do Sul. Those floods contributed to an expected drop in output there of about 500,000 tonnes from last year.

Andre Pessoa, Agroconsult’s director, said: “Climate problems will not detract from this very good harvest, with optimal profitability and productivity.”

The latest government estimate in early March for the soya crop is lower than Agrocon-sult’s at 70.3m tonnes. But even by the official number, that would still be a record harvest.

On March 25, researcher Safras & Mercados pegged Brazil’s soya production at a record 71.5m tonnes this year – higher than the 70m-tonne forecast by the USDA earlier in March. Farmers have sold 58% of their crop as of March 25, according to crop-consulting firm Celeres.

“It looks like the rains in Brazil have not dam-aged the crop as much as people were expecting,” said Greg Grow, the director of agribusiness for Archer Financial Services in Chicago. “Demand for US soyabeans should slow.”

If the country does produce a record harvest it could not come at a better time for growers, with soya prices up around 40% since the mid-dle of last year. Chicago May soya futures end-ed trade at $13.6150 per bushel on Tuesday.

Despite the start of the soya harvests in South America and large output in the US, Chicago soya futures were unlikely to fall below $10 per bushel, Mr Pessoa said.

Higher prices would provide farmers with ex-tra cash to increase investments in the following harvest. “If 2011 looks good in profit terms, 2012 looks even better,” he said.

The consultancy’s analysts journeyed a total of 55,000km (34,375 miles) through the coun-try’s soya areas between January and March to gather producers’ views and make their own visual inspections, and ended the tour last week.

Agroconsult expected yields to rise in most of the main soya states with the exception of flood hit Mato Grosso do Sul. Rio Grande do Sul was likely to achieve record productivity this season of 46.3 bags per hectare versus last season’s 43 bags per hectare.

By Emile Mehmet

MALAYSIAN palm oil futures rose nearly 2% on Wednesday on market views for a smaller US soya acreage this year that could lead to less competition with soya oil and boost demand for palm.

The benchmark June crude palm oil contract on Bursa Malaysia Derivatives closed up 1.9% at M$3,312 (US$1,093) a tonne. The contract touched a high of M$3,323 earlier, its highest since March 25.

Palm oil traders are waiting for the US plantings report due as The Public Ledger went to press on Thursday, which may help re-verse the market’s 13% decline so far this year.

Higher palm oil output and the current dip in demand have pressured prices. “Local senti-ment is getting driven by overseas markets. The planting of soyabeans is very important to the palm oil market,” said a trader with a foreign brokerage firm in Kuala Lumpur.

Technical charts showed Malaysian palm oil could revisit its February high of M$3,967 over the next three months, based on its wave pattern. But palm oil’s Malaysian fundamen-tals remain bearish. Output is moving into a higher cycle from the first quarter of 2011 af-ter two years of weak yields and erratic weather.

“Market sentiment is still bearish due to good supply expectations for this month... It can be more than a 20% (rise),” said another trader.

Cargo surveyors were due to issue Malaysia’s March exports on Thursday and traders earlier in the week expected volumes to reach 1.15m

tonnes, slightly higher than the 1.1m-tonne lev-els seen in February and hastening a build-up in inventories.

There is far from a consensus among market players on production. “The export figures will be quite disappointing but it cannot be viewed in isolation,” said one analyst. “The reason why, is because production levels are poor.”

Looking at the first two months, Malaysia’s output was about 15% below the same period last year, he added. “Production levels are down

substantially, and there has been increased off-take from places like Indonesia, where pro-duction is growing.”

The most active September soya oil in Chi-na’s Dalian Commodity Exchange rose to yuan10,100 ($1,540) a tonne versus yuan10,086 a tonne when the market opened. A Reuters poll showed that the US soyabean area plantings for 2011 will be 76.87m acres, down 534,000 acres from the 2010 acreage.

Meanwhile, palm oil producer Sinar Mas Agro Resources and Technology said on Wednesday it plans to invest up to Rp9tn ($1bn) until 2015 to make downstream products.

Also on Wednesday, a Norwegian finance ministry official said Norway’s $550bn sov-ereign wealth fund will keep investing in Southeast Asian oil palm planters, but may exclude firms that severely damage the envi-ronment.

Environmentalists have broadened their cam-paign to involve investment funds holding shares in palm oil firms that fell rainforests to expand – a practice that pumps vast global warming gases into the atmosphere.

Smaller US soya area trims palm competition and prices

Philippine coconut oil exports slowPHILIPPINE coconut oil exports during the month of February fell 5% in volume from a year earlier as bad weather cut local copra out-put. However, value of the shipments nearly doubled on record high prices, industry data showed on Monday.

Shipments by the world’s biggest coconut oil exporter dropped to 70,835 tonnes in February from 74,578 tonnes a year earlier, higher than an estimate made early this month, the United Co-conut Associations of the Philippines (UCAP) said in a report. Last month’s exports of the commodity used in food, detergents and biofu-els generated total revenue of $103.23m com-pared to $54.03m a year earlier.

“Coconut oil continued to benefit from the strong world vegetable oils market. Persistent supply concerns also provided underlying sup-port to coconut oil price gains,” UCAP said.

The price of coconut oil hit an all-time high of $2,244.30 per tonne last month, nearly double the year-ago level of $796.81 a tonne, it said. The industry group has forecast coconut oil exports this year to reach 900,000 tonnes, almost a third lower than last year’s shipments of 1.32m tonnes, after severe drought last year.

WEEKLY OILSSNAPSHOT

CBOT SOYA1291.50¢ per 60-pound bushel, Weds close

-4.7%CBOT SOYA OIL53.15¢ per pound, Weds close

-6.8%PALM OIL FUTURES3390.00

(Kuala Lumpur) M$ per tonne, Weds close-6.8%

ICE CANOLA532.80C$ per tonne, Weds close

-8.3%LIFFE RAPESEED417.75$ per tonne, Weds close

-10.6%

PHILIPPINE COCONUT OIL EXPORTS (tonnes) 2011 2010 YTD 2011 YTD 2010January 101,391 146,971 101,391 146,971February 70,835 74,578 172,226 221,549 FEBRUARY 2011 Volume % ShareEurope 33,700 47.6USA 26,200 37.0China 9,221 13.0Japan 1,714 2.3Total 70,835 100Source: Reuters

“Export figures will be disappointing but can’t be viewed in isolation.”

Malaysian market trader

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NEWS | MINORS

Quality issues send Indonesian nutmeg into another sharp rallyBy Julian Gale

INDONESIAN nutmeg prices have shown fur-ther sharp increases of late due to the continued severe shortage of material resulting largely from demand pressure and quality issues.

In the week ending March 25, European trad-ers quoted Indonesian sound shrivels at spot prices of $17,500 a tonne compared with $16,800 a tonne a week earlier. Shipment offers on sound shrivels were said to be at $17,000 a tonne against $16,000 a tonne previously.

One Rotterdam trader told The Public Ledger that the latest price advances reflected a further tightening in overall availability. “There is de-mand but no supply,” he added.

The trader noted that sound shrivels are one of the main types of nutmeg used in European markets for grinding purposes. “Ground nutmeg is always more important than whole nutmeg,” he remarked. “It is what people are now looking for. They need nutmeg for grinding.”

Demand remains constant, so there is no sign of any relief to the situation, particularly with Grenada remaining out of the equation following severe crop damage from Hurricane Ivan in 2004. “Nutmeg is a product of course which tra-ditionally is being used in many recipes. Many people grew up with the taste and flavour of nut-meg so it’s not so easy to skip it or replace it with anything else,” the Rotterdam trader commented.

Andrew Barker, managing director of PBA Brokerage, said he had been quoted spot prices as high as $21,000 a tonne for Indonesian ABCD grades – substantially higher than the levels of $18,500 a tonne indicated to The Public Ledger in the week to March 25. “Last week, I called about 10 companies in Europe and I couldn’t

find one seller. Eventually I found a seller in Bel-gium and it was at $21,000,” he said.

One UK trader said: “It is very difficult to get hold of anything, particularly from the regular suppliers, that know they have to supply nutmeg with levels of aflatoxin and ochratoxin that are within the EU limits. It is still proving difficult with nutmegs from Indonesia.”

Further chemical preservative issuesThe market is also struggling because of find-ings of biphenyl, a colourless crystalline aro-matic hydrocarbon which was permitted until 2003 as a food preservative and is included in the EU list of flavouring substances. Moreover, it was for many years permitted as a plant pro-tection product.

Gerhard Weber, secretary general of the Eu-ropean Spice Association, told The Public Ledg-er that in 2010 biphenyl was found to be present in many food items, among them fresh herbs. “Only last August, we found the highest levels to be in nutmeg and mace,” he added.

However, it has not yet been determined whether it is naturally occurring in the spice or has emerged as a result of a contamination from products containing the hydrocarbon.

The ESA has asked the European Commission (EC) to set a new maximum residue limit for bi-phenyl in nutmeg and mace to what it views as an achievable level of 1 milligram per kg.

The EC has decided that any decision must be made on an EU-wide basis from the outset. The German Institute for Risk Assessment has con-cluded that 1 milligram would be an acceptable level. The relevant data has been sent to the Eu-ropean Food Safety Authority, and it is hoped that it will reach the same conclusion.

February weather destroys Eastern Europe corianderEARLY reports have suggested that this year’s Eastern European crops of coriander seed could be smaller than hoped for following adverse weather in February.

Andrew Barker, managing director of PBA Bro-kerage, said he had heard that farmers in Eastern Europe planted in February, but due to wet and cold weather, seeds were destroyed and farmers were switching to sowing other more lucrative crops. This would lead to a decline in planted area for coriander in Eastern Europe, he added.

Mr Barker told The Public Ledger that a lot of farmers in Eastern Europe had not replanted co-riander seed since the adverse conditions in February. “The feeling I have is that if they have replanted it’s going to be a late crop,” he said.

Mr Barker explained that contacts in Ukraine, Bulgaria and Romania had all reported that se-verely cold winter weather had hampered output. However, he noted that despite this, prices re-mained stable and he recalled that there had been no dramatic movement in prices over the last six months.

One UK trader said he had also seen reports that plantings would be lower this year. “I have not had any offers through on (coriander) seed for quite some time which would signal that maybe there is some shortage or potential short-age on seeds coming through.”

Outlook in BulgariaBobby Dyulgerov, general manager of Nikea Trade in Bulgaria, told The Public Ledger that total plantings in the country would be down by some 50 to 60% from those of last year. This was partly because farmers did not like the quality of the seeds for planting this year and knew that the yields would be much less as a result of this.

Moreover, most farmers in Bulgaria have been switching to planting sunflower seeds which give a higher financial return of around £400 ($639.74) per tonne. In addition, sunflow-er seeds have the advantage of an average yield which is double that achieved from coriander seed, Mr Dyulgerov explained.

Plantings of coriander seed would normally be completed by the end of February but the ex-treme winter this year meant that some plantings were still being undertaken in mid-February.

Mr Dyulgerov recalled that in years of fa-vourable output Bulgaria has achieved crops in the range of 20,000 to 30,000 tonnes. He sug-gested that this year’s crop might reach around 15,000 tonnes at most.

The UK trader added that there had also been a lot of talk about India’s coriander seed crop be-ing substantially lower, leading to expectations that Indian material could see price advances over the coming months, fuelling any upward pressure on the Eastern European material.

INDIAN spice traders are expecting declines in prices of the country’s cardamom in the coming weeks as farmers release stocks on fears of an extended harvest season.

A report in The Financial Express said that following a slow down in February, arrivals had increased at the auction centres as farmers re-leased more cardamom into the market. Good summer rains in the producing regions indicated an extended cardamom harvest, traders said.

P C Punnoose of the Cardamom Processing Marketing Company in Kumily, told the news-paper: “Farmers were holding stocks expecting prices to move up. Now they realise that the prices may come down as demand wanes from North India. They are selling more cardamom.” As a result, prices had dropped below Rs1,000 ($21.97) per kg and were facing downward pressure, he added.

On Tuesday, the average prices declined to Rs893.57 per kg from Rs959 a kg on Monday. In-dian cardamom prices reached a record high of Rs1,950 to Rs2,000 per kg in June 2010 due to a global shortage driven by lower production in Guatemala. Imports from Guatemala, which tend to depress the domestic market, have been low in the last two years, The Financial Express reported.

Indian traders fear that demand might decline from up country buyers during the peak of sum-mer. High prices and problems in west Asia have compounded the problems faced by exporters.

“We might see continuous arrivals of carda-mom as we go for an early harvest of the new crop. Earlier cardamom supply used to be re-stricted to eight months,” Mr Punnoose said. Rains in the cardamom growing regions of Ker-ala revealed that there would be an early crop for the next season, he said.

Long harvest sees cardamom drop

WEEKLY MINORSSNAPSHOT

DILL SEED1450.00(India cif) $ per tonne, Weds close

-3.3%CUMIN3200.00(Syria cif) $ per tonne, Weds close

-3%WHITE PEPPER7700.00(Vietnam spot $ per tonne, Weds close

1.3%CARAWAY SEED1572.00

(E.European fot) € per tonne, Weds close -0.9%

FENNEL SEED2400.00(Egypt cif) $ per tonne, Weds close

14.3%s sttt


NEWS | MINORS

Australia to gain more from steady pecan productionAUSTRALIA’S pecan crop is expected to be a steady size once again last year but quality and the price outlook seem good.

The pecan harvest in Australia is due to start later this month, with the crop expected to reach about 2,400 tonnes in-shell.

“This has changed little over the last decade as most orchards are mature and the prolonged drought since 2002 has inhibited new plant-ings,” explained Richard Genest, general man-ager of sales and marketing at Stahmann Farm Enterprises, which accounts for about 85% of the country’s production.

However, growing conditions this year have improved. “The 2010/11 growing season has been a good one and although volume will be modest, the quality of the Australian crop is ex-pected to be very good,” said Mr Genest.

A dramatic increase in Chinese consumption since 2008 and more stable demand in core markets have combined to push prices to re-cord levels. “It is expected that prices will ease only slightly during the year from the February peak of US$7.00 a pound factory door,” Mr Genest continued. “Chinese buyers are again hungry for product although these prices should dampen demand to some extent. Still, it is hard to see a surplus emerging anytime soon.”

Although the US is dominant supplier to the world market, its crop is a long way off. “There won’t be another crop in North America until the end of this year. There’ll be no new source of significant supply until 2012, so we’re look-ing at a very high price season,” said Mr Genest.

About 70% of the Australian crop is typically sold at home with the balance exported either as kernel or as in-shell to China.

As a result, the sector is putting in some longer-term investment. “The prospect of sus-tained higher prices along with breaking of the drought in mid-2010 has encouraged renewed interest in pecan plantings and should also see an improvement in many underperforming or-chards,” explained Mr Genest. “That said, the Australian pecan crop is unlikely to grow much beyond 3,000 tonnes in-shell in the near future due to the long lead-time to production.”

By Ian Hart

NEW offers to sell Californian walnuts have brought some prices down over the past week, but getting quotes for deferred months appears to be extremely tricky and costly.

Quotes from California fell by around £100 ($159.85) a tonne in the week to £7,390 a tonne for light halves (80%). This is an easing from the close to £8,000 a tonne level seen in January, but in the final quarter of 2010 prices had been be-tween £4,000 and £4,500 a tonne. European trad-ers put US prices at $4.70 to $4.80 a pound hav-ing been over $5.00 a pound in recent months. Indian prices also slipped by about £100 a tonne.

“There has been some weakness in the mar-ket as all of a sudden there are all kinds of offers that have come out from Californians,” said Joost Penning, manager of the dried fruit and nut department at Rotterdam trader Catz. “For the past two or three months they have said they are sold out and now you can buy shelled wal-nuts on every corner of every street. It’s part of their tactics that have helped them as prices have gone up and now they have ‘found’ some stocks prices are still high.”

Mark Benjamin, of leading London-based trader Kenkko, did not agree there had been an easing of the market, except perhaps on the Eu-ropean resale market. “California is still saying the supply is sold out and there is not much in-ventory,” he said. “I regularly deal with 10 to 15 companies on a regular basis and am only get-ting sporadic offers from two or three currently. Prices are as firm as ever.”

Mr Benjamin said this appears to be especial-ly true of deferred months, generally May to September. “We have plenty of customers who want to book for shipment later in the year. But suppliers just want to sell prompt and can pre-pare processing plants for the new crop,” he said. He thus said he had seen or heard of quotes ranging from $4.90 to $5.50 a pound fas.

Another European nut trader noted how a number of markets had seen a slight easing on the prompt shipments as some players had over-bought prior to Christmas but the deferred months remain firm as suppliers did not want to over-commit in tight markets.

Future price trendWith the new US crop not until September and Indian crop a month after that, Californian players are still claiming the market is tight. Mr Penning said cash generation and stock management would dictate market direction for now. “As we approach September, they will need cash and clear the stocks to allow their summer maintenance. No-body will want to be stuck with a few hundred tonnes of walnuts they can’t sell,” he said.

The Chilean crop will come in May, bringing some respite to the market despite the country being a premium producer of light and extra light. “Prices are currently $6.60 a pound cfr Europe for light halves and $7.00 a pound for extra light halves. This is much higher than the US but there will be some demand as the Chil-ean hand-cracked walnuts are nice looking ver-sus the US which are typically machine cracked,” said Mr Benjamin.

New US offers ease nearbys in very tricky walnut market

Italian hazelnuts may change outlookA BIGGER Italian hazelnut crop could make the coming year’s market a different beast to the past tight season.

Although Italy’s typical crop is far smaller than the dominant Turkish one, early signs are that it could bounce back strongly from the 70,000 to 75,000 tonnes that appears to be the consensus for the past season.

“The Italian crop has had a fantastic pollina-tion and a bigger crop could mean a different picture for the market,” said Vittorio Friedmann of UK trader Voicevale. “It may be that a similar size crop that preliminary estimates are suggest-ing for Turkey may not mean a bull market.”

Showing how difficult output is to predict, Mr Friedmann noted how prior to the past Italian crop producers were talking about 100,000 tonnes of production, by Christmas this was down to 60,000 tonnes before some upward revisions.

“Italy can produce 90,000 to 100,000 tonnes when things go well, but if the pollination and weather is perfect there is 130,000 tonnes of poten-

tial there. That would nearly double the last crop,” he said. It is even more difficult to get a handle on the likely Turkish crop size. “Preliminary esti-mates from the flowering survey suggest the crop will be a similar size as last year, which most put between 625,000 and 630,000 tonnes, though some might say 650,000 tonnes,” Mr Friedmann continued. “So early thoughts are 600,000 to 650,000 tonnes based on the flower counting but that could still go 100,000 tonnes either way. The next four weeks are crucial in Turkey.”

Although there was a modest £100 ($159.85) a tonne slip in prices in sterling last week this was chiefly down to currency factors. Mr Friedmann said the market was still firm and the key factor to watch was the price of material in the local mar-ket. This was still stubbornly high at Tlira9.7 ($6.23) to Tlira9.8 a kg, having peaked at Tlira10 a kg after starting the season at Tlira7.5 a kg, re-flecting continued strong export demand. “There has not yet been a change in psychology among the stockholders,” concluded Mr Friedmann.

WEEKLY MINORSSNAPSHOT

RAW PISTACHIOS5800.00(Iran 28-30) € per tonne, Weds close

1.8%INDIAN CASHEWS5543.00(Spot UK 320s) £ per tonne, Weds close

0.4%RAW PISTACHIOS6600.00(Iran 20/22) € per tonne, Weds close

4.8%DES COCONUT2750.00

(Sri Lanka faq c&f) $ per tonne, Weds close-6%

DES COCONUT2660.00(Sri Lanka fob) $ per tonne, Weds close

-6.2%s ss

AUSTRALIAN PECAN EXPORTS (tonnes)

0

200

400

600

800

1000

1200

1400

Shelled

In‐Shell

Source: Source: Australian Bureau of Statistics

t t


NEWS | MINORS

WEEKLY MINORS SNAPSHOT

NO.9 SULTANAS1518.14(Turkey) £ per tonne, Weds close

0%TS RAISINS1550.51(California) £ per tonne, Weds close

-5%CARDAMOM OIL440.00

(Spot) $ per kg, Weds close4.8%

ANISEED OIL25.00(China cif) $ per kg, Weds close

-3.8%ORANGE PERA9.50(Brazil spot) $ per kg, Weds close

-5%s t t

Sudden alcohol industry buying pushes Turkish sultanas higherBy Andrew Ciclitira

TURKISH sultana prices have risen in the past week as a leading domestic player stepped into the market.

Prices of Turkish sultanas firmed slightly fol-lowing news that one of the leading alcohol manufacturers in Turkey purchased a significant quantity of fruit. It seems increasingly unlikely therefore that the price of either Turkish sultan-as or raisins will fall until definite news of the new season’s crop becomes available. Specially cleaned standard No.9 sultanas are being quoted between $2,550 and $2,650 a tonne fob Izmir.

However, exports of Turkish sultanas have reached 127,742 tonnes for the season to date, with approximately 3,500 tonnes being shipped per week – a very similar quantity to last year. This is surprising as the cost of the fruit is sig-nificantly higher and it might have been as-sumed that demand would decline.

South Africa has confirmed that its vine fruit crop is one of the smallest on record following flooding. Total production of dried grapes is thought to be a maximum of 23,000 tonnes, which compares to a tonnage of 50,000 tonnes last year. Reports are that the quality is also poorer and that much of the fruit will be sold as Thompson seedless raisins

There has been fierce bidding between the different packers as they struggle to obtain products from the farmers to sell.

European importers still await new season South African sultana prices, but the expecta-tion is that these will be very expensive.

There should, however, be a similar size crop of South African currants this year when compared with last year as the fruit is grown in a different area and was unaffected by the recent flooding.

Exports of Californian raisins to the UK have reduced significantly this year with major manu-facturing buyers changing their allegiance to other origins in an attempt to reduce their raw material costs. This could be a short-sighted pol-icy as in reality US raisins still remain a premium quality product. Although the newer producing countries have improved their standards of clean-ing in some cases this is not always consistent.

Prices of US select Thompson seedless rai-sins range between $1.15 and $1.18 per pound c&f Felixstowe, with shipments available through until September.

Unsold stocks of Greek currants are scarce and prices have increased both on the UK spot market to around £1,750 a tonne ldp ex store for provincial fruit or €1,800 ($2,554) a tonne fob Piraeus for shipment.

New season Greek currants will not be avail-able until mid-September but early reports sug-gest the new crop will be of a similar size to this year. It is to be hoped therefore that the Greek currant packers can encourage their farmers to begin to plant new vines to increase the acreage that is available as this has become too small to fulfil global demand. If sultana and raisin prices remain high, demand for Greek currants could increase.

The author is the managing director of Demos Ciclitira, London

Short crop causes Brazil’s essential oil sales to fallEXPORTS of essential oils, mostly comprising of citrus oils, from Brazil have seen a signifi-cant year-on-year dip in the first two months of 2011, despite annual sales climbing from 2009 to 2010.

The latest data released by Brazil’s Foreign Trade Secretariat showed that essential oil ship-ments during January and February 2011 to-talled 8,190 tonnes, a drop of more than 44% from the 14,632 tonnes shipped in the same pe-riod of 2010.

However, in contrast to this annual exports from the country topped 70,216 tonnes in 2010, up from the 68,681 tonnes shipped throughout the whole of 2009.

The top destination for the essential oils was the US taking 2,796 tonnes in the two-month period, however sales were also down signifi-cantly by 45% year-on-year, from the 5,081 tonnes.

Japan and Germany, the second and third biggest destinations of the oils respectively, also both registered a decline in purchases from Brazil.

Sales to Japan for the two-month period on 2011 reached 1,634 tonnes, down by almost 32% from the 2,387 shipped in 2010. Germa-ny meanwhile saw its purchases drop by al-most 47% to 517 tonnes from 973 tonnes in the 2010 period.

The UK, the fifth biggest buyer of Brazilian essential oils, also saw a significant drop of 71% to 166 tonnes in 2011 from 574 tonnes the year before.

THE Mumbai-based Forward Markets Commis-sion has directed Indian commodity exchanges to increase margins on mentha oil futures from March 23 onwards.

“Mentha oil prices have been increasing sharply since the last two weeks mostly on spec-ulation and not much on fundamentals. There-fore, both on the buying and selling side (long and short), margins have been increased with a special margin on long-side for March and April expiry contracts,” said an official close to devel-opment.

Since March 1, mentha oil futures have shot up from Rs1,135 ($25.45) a kg to Rs1,314 a kg. Similarly for the April contract, prices have gone up from Rs1,070 per kg to Rs1,127 per kg.

On India’s Multi Commodity Exchange (MCX), mentha oil for delivery in April rose by Rs20.70, or 1.85%, to Rs1,137 per kg. On Monday, March 28 mentha oil for delivery in May rose by Rs12.10, or 1.24% to Rs984 per kg. March contract and April contract of men-

tha oil futures expire on March 31 and April 29.

“As against the usual margin of 5% paid in cash for both long and short positions in the contract, an additional margin of 10% has been imposed on both positions. In addition to this, a special margin of 20% has been directed for only long positions,” said an official. In effect, the margin for long position is 30% (inclusive of 5% paid in cash) and 10% for short positions (inclusive of 5% paid in cash).

US rumours prompted fluctuationsTraders said that much of the sudden volatility in mentha contracts had arisen because the US had earlier decided to ban mint cigarettes, the Busi-ness Standard reported. However, it is now be-ing reported that they have decided to continue the use of mint based/menthol cigarettes. Trad-ers said there no confirmation on this front but speculations are adding to the confusion. India is the largest producer and exporter of menthol and

mint oil in the world.India’s mint belt lies in Uttar Pradesh, Pun-

jab, Himachal Pradesh, Haryana and Bihar. Al-most 80% of the crop in India comes from Uttar Pradesh (Rampur, Moradabad, Bareilly, Bara-banki and Badaun) and the remaining from the other states.

At present, major producers of mint oil are India, China, Brazil and the US. The estimated export of mint products from India in 2009/10 was 19,000 tonnes having a value of around Rs120bn.

“The price range of Rs1,200 to Rs1,300 for mentha oil has been the highest since 2006. In fact, the price, until sometime back, used to be in backwardation (future prices below spot prices). Suddenly, the contracts are in con-tango (future prices higher than spot) without much increase in productivity. Since March, spot prices ruled in the range of Rs1,206 to Rs1,195 before settling at Rs1,195 per kg,” said an official.

Futures regulator ups margins against wild mentha prices

tu


NEWS | COMPANY

By Julian Gale

GLOBAL animal nutrition group Provimi has announced a 10.8% increase in total revenues for the year to December 31, 2010 largely due to a solid performance in Latin America and other high growth regions.

Total revenues for the period reached €1.615bn ($2.27bn) while earnings before tax-es, depreciation and amortisation (EBITDA) were up 8.2% to €461m.

The results exclude the pet food division as this is treated as a discontinued activity follow-ing the announcement on March 23 that this was being sold to Advent International for an enter-prise value of €188m.

Provimi said it has a solid platform in place to support further international growth. This included a very strong performance in its key growth markets Brazil, Mexico, Russia and Asia, which contributed 43% of total EBIT-DA.

The company also cited the successful acqui-sition of NASSA, a leading Mexican animal nutrition business, and said the integration was progressing well and would be finalised in the second quarter of this year.

Ton van der Laan, group chief executive, said: “This is an excellent set of results driven largely by our strong performance in high growth regions, such as Latin America, Russia and Asia, and we see considerable opportunities in these areas for the future. Our ability to offer superior nutritional solutions to our customers, strategically positioning ourselves in the centre of the value chain, is also delivering real com-petitive advantage to the group.”

Ruminants sector especially strongProvimi Latin America boosted revenue by 33.4% to €240.4m from €180.3m in 2009. In Brazil the group delivered EBITDA growth of 47%, driven by a volume increase of 23% pri-marily in the ruminants segment as well as a clear focus on the ingredients and additives business, the company said.

Mr Laan added: “Provimi has a clear strate-gy to focus on its core animal nutrition busi-ness. There are considerable growth opportu-nities in the fast growing emerging markets for our animal nutrition business today, driven by the rise in protein consumption, and we remain focused on expanding our presence in those regions.”

FRUTAROM Industries, the world’s seventh-largest flavours and specialty ingredients maker, has posted a 17% rise in quarterly net profit, boosted by growth in emerging markets.

Frutarom’s fourth-quarter net profit rose to $8.8m from $7.5m a year earlier. Sales rose 3.6% to $112.4m and increased 7.3% in local currency.

“Frutarom is continuously accelerating its penetration into emerging markets, which are characterised by a high growth rate and increas-ing demand for the company’s products, while continuing to grow in traditional markets,” said Ori Yehudai, president and chief executive.

“In recent months, we have witnessed a glob-

al trend of increased prices of raw materials, including some of the raw materials used by Frutarom in the manufacture of its products.”

As a result, Mr Yehudai said the company ad-justed its selling prices of affected products.

Frutarom also continued with its acquisition strategy, buying the industrial spices savoury activity of Rieber & Son from Norway and the assets and activities of EAFI in the UK.

The company said it would put a greater em-phasis on acquisitions in the growing target markets of Asia, Eastern Europe and Central and South America, alongside acquisitions in traditional markets such as North America.

THE Hershey Company has announced an in-crease in wholesale prices across most of its US, Puerto Rico and export portfolio.

A weighted average price rise of around 9.7% has been introduced across the compa-ny’s instant consumable, multi-pack, packaged confectionery and grocery lines. Hershey said the changes would help offset part of the sig-nificant increases in its input costs, including raw materials, packaging, fuel, utilities and transport.

David West, president and chief executive of Hershey, said: “We remain committed to the

higher levels of global brand support, consum-er spending and investment in go-to-market capabilities communicated in February. We will work with our retail customers to ensure that the implementation of the price increase is supported with customer trade promotions and merchandising that continues to grow the cat-egory.”

Mr West explained that Hershey does not ex-pect a seasonal net price realisation until Easter 2012 so most of the financial benefit from the price changes would impact the company’s earnings in 2012.

Latin American growth gives Provimi a boost in earnings

Emerging markets up Frutarom profit

Hershey offsets costs by increasing its prices

Higher tea prices lift Limuru income to greater heights

New facility to see Nestle output jumpNESTLE plans to double output of its Nes-cafe Dolce Gusto coffee capsules through a Sfr64m ($69.68m) investment in a new international production facility at its fac-tory in Girona, near Barcelona. Nestle said it will ramp up output to over 2.5bn coffee capsules a year by 2012 for export to more than 20 European countries, as well as the US, Canada, Mexico, Brazil, Argentina and Chile.

Huge increase in ADM storage plannedARCHER Daniels Midland has announced a tripling in storage capacity at its grain eleva-tors in Novelty and Center, Missouri, while a barge loading terminal in Quincy, Illinois, will add grain storage and improve receiving efficiencies.

Cargill to purchase Mumbai’s SweekarCARGILL has struck a deal to acquire Mum-bai-based firm Marico’s refined sunflower oil brand Sweekar, its second move for an Indian brand in five months.

Full stories: www.public-ledger.com

COMPANIES IN BRIEF

KENYAN agricultural firm Limuru Tea post-ed a 169% increase in 2010 pre-tax profit, due to a weaker Kenyan shilling and high interna-tional tea prices, the company said on Wednesday.

The firm said it produced 3.84m kg of green leaf and made 841,439 kg of black tea, which also helped to boost pre-tax profit to Ksh104.3m ($1.23m) from Ksh38.7m the previous year.

“The combination of a higher crop, a higher US dollar tea price and a weaker Kenyan shil-ling increased total revenues by 36% from Ksh91.1m in 2009 to Ksh123.9m in 2010,” Limuru Tea said in a statement.

It said part of the profit jump came from a net gain of Ksh49.8m in the fair value of bio-logical assets.

Earnings per share rose to Ksh62.4 from Ksh22.5 in 2009. The dividend was unchanged at Ksh7.5.

The company said crop volumes in the first quarter 2011 had been much lower than in 2010 due to poor rains. However, it said 2011 should be a good year if international tea prices and the shilling’s level remain favourable, and rainfall improves.

WEEKLY SHARES SNAPSHOT

NUTRECO 52.39Weds close

-0.8%SUDZUCKER19.88Weds close

3.8%BUNGE72.83Weds close

3.1%IMPERIAL SUGAR13.21Weds close

14.4%CORN PRODUCTS51.21Weds close

6.6%t s sss


ANALYSIS | MARKETS

Maize – CBOT Futures (¢/bushel)

MAIZE prices bent lower on ideas that the USDA would estimate larger US planted area and March 1 stocks in keynote reports this week. A firmer US dollar and fears of higher interest rates also contributed to losses. As in the wheat market, there was supportive news too including a sustained wet outlook for the US Midwest corn heartlands just when farmers need to prepare fields for planting. Some traders also thought whatever acreage estimate the USDA came up with this week had been mostly factored in and would not be enough to extrapolate into a significant surplus and rebuilding of tight stocks. Possibly the most important undermining influence, however, was the ongoing lack of confirmation of Chinese import purchases, especially after last week’s 1.25m-tonne US sale reported to ‘unknown’ buyers. The markets still appear to expect a sizeable Chinese order but silence on this front made recent talk of 3m tonnes of orders look inflated.

Wheat – CBOT Futures (¢/bushel)

MIXED fundamentals kept CME futures choppy and largely range-bound. Support came from yet more dry weather eroding yield prospects for the coming US hard red winter crop – its top export grade. US weekly export shipments and sales were good while Iraq bought another 200,000 tonnes from the US and 100,000 from Australia. On the downside were rumours that Russia might have more stocks than expected after its export ban which, along with partial crop recovery this year, could allow an earlier return to exports. India’s massive stocks and approaching near record crop are also thought likely to start its first significant export programme for four years, as early as next month. Japan meanwhile dropped its weekly tender due to adequate supplies and signalled lower needs for 20011/12. Wheat was also restrained by weaker maize, news that funds had cut their involvement in grain markets and ideas that a firmer dollar could maintain that trend.

Trade were 20¢ to 30¢ per bushel higher amid concerns that US producers would not seed suf-ficient area to replenish the tight supply situa-tion and rain-related harvest delays in Brazil and talk of quality downgrades due to flooding.

A lot of attention was also given to the USDA quarterly grain stocks in all positions and its prospective plantings report due out on Thurs-day, March 31.

“To tell you the truth, the market is going to react to the USDA numbers, and then begin to resume looking at new crop fundamentals,” said Ron Frost, analyst at Frost Forecasting.

He said factors about how tight old crop sup-plies really are will quickly move to the fore-front of concerns, with the loss of acres to maize and cotton adding to the worries of the industry.

“There are already all kinds of weather con-cerns surfacing, including potential delays to seeding in the US Midwest because of exces-sively wet conditions,” Mr Frost said.

He also pointed out that the oilseed crops in Europe and Poland were not faring as well as they should be, with the dry growing conditions in China’s soyabean growing regions also start-ing to grab attention.

Chicago corn (maize) futures lost roughly 11¢ to 20¢ per bushel during the week as the specula-tive community reduced risk ahead of USDA re-ports scheduled for release on March 31.

Talk of increased acreage in the US helped to spark some of the price weakness as did news that China was seeking out cheaper corn from Argentina rather than buying US product.

Mr Frost also felt that the reaction to the USDA reports by corn will also be quick.

Cocoa futures were $232 to $264 per tonne lower during the week ended March 30 and Mr Cordier said the market is likely to continue its bearish trend. “Any upside that the market has is already priced in, so we could be looking at the market giving back the gains it has made in the first quarter of 2011,” he said.

ICE Futures Canada canola (rapeseed) con-tracts edged higher as the wet conditions that could hamper spring planting operations across much of western Canada provided underlying support.

The release of the USDA’s Prospective Plant-ings report on March 30 will provide some short-term direction for the oilseed markets, but attention will quickly turn to actual seeding conditions and the weather heading into spring planting in North America.

The 15-day weather forecasts are calling for showers across at least 75% of the Canadian Prairies for April 4 to 8, said Jerry Klassen, man-ager of GAP Grains and Produits. “It looks like we’ll have some rain and snow, and it looks like temperatures will drop below zero until April 15. That makes the market a little cautious. There is the potential for huge acres, but as it looks now, we will not be seeding any of those acres in April.” He thought the market would hold value until production forecasts are more certain.

Mr Klassen said some commercial crusher and exporter demand was providing support under the market as were drier conditions in the rape-seed growing regions of France and Germany.

On the other side, producers were using the recent bounce in prices as an opportunity to liq-uidate some stocks before spring.

Soyabean futures on the Chicago Board of

By Phil Franz-Warkentin & Dwayne Klassen

COFFEE on ICE Futures US was mostly lower during the week ended March 30 as traders an-ticipated a strong crop from the world’s top pro-ducer, Brazil, with supplies expected to arrive in April or May.

Coffee futures were 0.05¢ per pound higher to 3.80¢ per pound lower during the week.

James Cordier of Liberty Trading Group said Brazil isn’t the only nation expected to have a sig-nificant crop, which will push the market lower.

“A number of Latin American countries will see production that is greater than first thought, and the Colombian production and exports are much greater than people had talked about. They are up about 15%,” he said.

Sugar futures on ICE rose 0.58¢ to 0.91¢ a pound as the market attracted buyers thanks to a weaker US dollar.

Mr Cordier said the fact that the price of en-ergy is rising, but only slight fluctuations were seen in sugar values, means values will soon be on the move again. “Sugar should have seen much higher gains this week given how much the price of energy has gone up.”

Cocoa futures on ICE saw significant de-clines as reports surfaced that forces backing Ivory Coast’s internationally-recognised presi-dent were advancing on key political and eco-nomic centres.

Should incumbent leader Laurent Gbagbo be forced out of office, market watchers said it would probably mean 400,000 tonnes of prod-uct that have been locked in the country are re-leased for export.

Coffee and cocoa slip on outlook and unrest

Markets Review Keep up-to-date with these markets and more with The Public Ledger’s Daily Futures Reviews: Go to www.public-ledger.com/DFR

Analysis of the world’s leading futures and physical markets

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ANALYSIS | MARKETS

WITHOUT a firm lead from the CME soya complex, ICE futures failed to build on the previous week’s late rally. Even talk of fresh sales to China was sidelined by flatter Canadian crush margins. The bulls continue to cling to talk of wet weather and slow snow melt delaying Canadian sowing and preventing all this season’s targeted large area being sown. There has even been talk of a long-term threat from earlier than usual autumn frosts but this is too far off for many participants to swallow – and many analysts still think farmers will pull out all the stops once drier soils permit. Otherwise, the dynamics of this market remain fairly stable. The EU is in tighter balance amid the competition from biodiesel for food oil supplies with traders absorbing some mixed news on the coming domestic crop. Reports that China sold most of the rapeseed oil it auctioned this week were taken neutrally, an indicator of narrower market supplies there.

BEARISH news continued to weigh on sugar futures although declines were muted by trade ideas that import buyers, previously frustrated by high world prices, could be waiting in the wings to start rebuilding their wafer-thin stocks. On the supply side, market talk continued to focus on Indian export potential, seen by the industry there as likely to add at least another 1m tonnes this season to the 500,000 already released. With Indian output apparently exceeding earlier estimates, though, observers might be forgiven for thinking trade could expand further in the months, or the season, ahead. As well as the approach of Brazil’s new crop flush of supplies, markets are also factoring far higher than expected Thai production – forecast by some observers up to 8m tonnes against less than 7m a few months ago. Some of the difference should go to exports as well as local stock re-building while world prices stay up. Mexico’s crop is also well ahead of forecast.

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Canola – ICE Futures (C$/tonne)Sugar – NYSE Liffe Futures ($/tonne)

COCOA futures saw one of their steepest collapses for some time as trade hopes built that the Ivory Coast’s political crisis might be finally nearing resolution. Although supporters of president-elect Ouattara looked closer to ousting former incumbent Laurent Gbagbo, hopefully soon enabling release of supplies blocked in port warehouses, some caution was still demanded by uncertainty over the beans’ condition (not to mention the fact that stocks still appeared to be, so far, in Mr Gbagbo’s control). Dealers also warned of logistical problems moving these beans as the mid-crops arrive. However, the markets appear to be taking an optimistic view of these risks in the broader context of a world market in theoretical surplus. Recent data promises large crops in Ghana, Nigeria and Cameroon and if the bulk of blocked Ivorian supplies is in fair condition, their release may demand a major rethink of the lofty levels to which prices recently soared.

ICE prices fell to six-week lows as a rising US dollar discouraged speculative support, while NYSE Liffe futures also leaned lower on more talk of increasing supplies from top robusta producer Vietnam. The latter’s March exports have been estimated 22% higher on the year while February shipments were also revised up putting season to date movement 17% ahead. ICE futures also noted further reports of improving supply from the Central American quality arabica producers with higher production and exports from Costa Rica and Ecuador respectively. Along with a pickup in previously halted Guatemalan sales, this strengthened consumer hopes that the market for quality coffees may be peaking. That said Brazil is still heading into its cyclical off-year with all the uncertainty that implies for forward supplies. The bears will be hoping that supplies from Colombia and the Central Americas will offset this somewhat.

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Cocoa – NYSE Liffe Futures (£/tonne)Coffee – NYSE Liffe Futures ($/tonne)

ORIGIN and destination markets appeared to be consolidating after a 10% to 12% decline in the month to date. Support came from better-than-expected Malaysian March export figures, so far almost pacing February’s total against earlier expectations of a possible 5 to 10% drop. Steep declines have been seen in European and Indian demand for Malaysian oil but these have been offset by much improved offtake from Pakistan and the US. Shipments to top buyer China have also held up better than expected. Malaysian crude palm oil exports continue to decline – down by about a quarter on the month – whereas refined oil and olein are doing better. However, drier weather in the Far East has also lifted consumer hopes that regional output might rally seasonally from next month, stemming the long winter decline in origin stocks and helping to cap prices. Less volatile energy markets last week have also trimmed ideas of a surge in biodiesel demand for palm oil.

THE complex opened on a weaker note but quickly resumed the previous week’s late rally on persistent unease over the adequacy of US 2011 plantings and news of more wet weather delaying an already late harvest from number two soya producer Brazil. Weighing against that were ideal finishing rains for the Argentine crop and uprated estimates for Paraguay, firming up ideas that the Latin American crop (Brazilian quality threats aside) will be another big one. Early weakness in beans also came from lower than expected US crush and while this was trimming product stocks (supportive for oil prices), this was countered to some extent by this season’s continued higher extraction rates. Ideas that lower crush margins might be reducing China’s near term needs also hit the bulls along with further statements from India pointing to higher domestic oilseed output and lower oil import needs from the world’s second largest (1m tonnes a year) soya oil buyer.

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Palm Oil – Malaysian Olein ($/tonne)Soya Oil – Dutch Physicals (€/tonne)


ANALYSIS | PRICES16

Market PricesThese prices are updated every working day:Go to www.public-ledger.com/dailypricesPlot, analyse and download prices from our database back more than a decade:Go to www.public-ledger.com/pricegraphsPrices from the world’s leading futures and physical markets

WHEATFUTURESs Liffe grade B (£/mt)May 11 198.50 195.50 212.75 170.00Jul 11 200.05 196.75 215.00 172.90Nov 11 161.50 158.50 181.00 145.00Jan 12 164.25 157.75 166.00 157.75 Total volume: 145 790 1854 342t CBOT (¢/60lb bu) (opening prices)May 11 736.00 736.50 917.00 667.75Jul 11 770.75 772.25 943.25 705.50Sep 11 807.75 809.00 968.75 741.00Dec 11 833.75 837.00 844.50 768.75s Kansas (¢/bu) (opening prices)May 11 865.25 853.00 999.25 780.25Jul 11 875.75 863.75 1008.00 791.25Sep 11 889.75 878.00 1020.00 806.50Dec 11 909.00 894.75 909.75 825.75s Minneapolis (¢/bu) (opening prices)May 11 890.50 884.00 1041.75 809.50Jul 11 899.75 893.25 1048.25 818.50Sep 11 905.50 898.50 1046.50 822.25Dec 11 914.50 907.25 914.75 831.50s Liffe milling wheat (€/mt)May 11 238.75 228.25 275.50 203.00Aug 11 209.25 192.75 244.50 171.50Nov 11 205.50 204.00 246.00 187.75Jan 12 206.25 205.25 210.25 187.25PHYSICALSCanada export in store basis St. Lawrence No. 1 (C$/mt)No. 1 CWs 13.5% protein 416.25 412.55 488.95 394.20s Hard Amber Durum Wheat US origin in-store Atlantic Coast (C$/mt)Spot 426.40 422.70 500.31 404.35F English feed (export) fob UK (£/mt)May 11 201.00 192.00 203.40 187.25Nov 11 164.00 193.00 205.00 164.00PRODUCTSF flaked 146.00 146.00 146.00 146.00

CORN/MAIZEFUTURESt CBOT (¢/56lb bu) (opening prices)May 11 670.25 697.75 737.75 608.00Jul 11 677.50 704.50 741.25 612.25Sep 11 632.25 655.00 665.00 556.75Dec 11 600.25 618.50 618.50 560.00PHYSICALSF US No.3 Yellow/ transhipped E.Coast (£/mt) 161.50 161.50 161.50 161.50Argentine Upriver fob differentials (CBOT Board) ($/mt)Feb 11 (Buyer) unq unq Feb 11 (Seller) unq unq PRODUCTSBulk ex-works flakedF Flaked (£/20kg sacks)Feb 11 208.00 208.00 209.00 208.00F Bulk ex-works large/kibbledFeb 11 188.00 188.00 189.00 188.00FUTURESs TGE Corn Futures (¥/mt)May 11 28690 28390 29450 23850Jul 11 28500 28050 30220 23590Sep 11 27500 27200 29530 23500Nov 11 25910 24940 27050 22410

BARLEYF ICE Futures Canada (C$/mt) (opening prices)May 11 200.00 200.00 205.00 190.00Jul 11 205.00 205.00 205.00 194.00Oct 11 195.00 195.00 195.00 180.00Dec 11 200.00 200.00 200.00 190.00PRODUCTSF Bulk ex-works flakedFeb 11 136.00 136.00 136.00 136.00

OATSFUTURESs CBOT Oat Futures ($/mt)Mar 11 236.30 235.20 291.80 212.70PRODUCTSBulk ex-works rolled/flaked

F Rolled 136.00 136.00 136.00 136.00

RICEPHYSICALSF Thai long grain white 100% B grade fob, Bangkok ($/mt) 490 490 550 490F Pakistan Basmati super fob Karachi ($/mt) 1200 1200 1200 1200F Pakistan Basmati ordinary fob Karachi ($/mt) 1150 1150 1150 1150s Vietnam 5% broken fob Saigon ($/mt) 455/490 440/445 495/540 440/445F US domestic Texas long grain ($/mt) 512/591 512/591

MILLETF N. American No.1 99.9% purity, ex-store UK (£/mt) EU Levy paid 460 460 460 460North American No.1 cif UK (excl.EU levy) ($/mt) unq unq unq unq

LENTILSF Turkish red split 0+0 fob Mersin ($/mt) 1050 1050 1050 1050F Turkish Red whole fob (Mersin/Turkey) ($/mt) 850 850 850 850F Red Whole fob Australian ports ($/mt) 700 700 750 700F Red whole fob Canada ($/mt) 700 700 750 700F Green fob Canada ($/mt) 950 950 950 800

BEANSF US No.1 haricot beans, ex-store UK (£/mt) 500 500 500 500F US No.1 haricot beans, cif UK ($/mt) 650 650 650 650F Dark red kidney UK recleaned polished, ex-store UK (£/mt) 630 630 630 630F Dark red kidney beans, No.1 grade cif UK ($/mt) 800 800 800 800F Black Eye beans No.1, ex-store UK (£/mt) 650 650 650 650F Black Eye beans, cif UK ($/mt) 900 900 900 900F Butter beans, Californian No.1, ex-store UK (£/mt) 710 710 710 710F Butter beans Californian No.1, cif UK ($/mt) 1000 1000 1000 1000

CHICKPEASF Turkish 1%, recleaned, ex-store UK (£/mt) 601 601 601 601F Turkish 1%, cif UK ($/mt) 940 940 940 850

SOYABEANSFUTURESs CBOT (¢/60lb bu) (opening prices)May 11 1372.50 1352.50 1463.00 1299.50Jul 11 1382.50 1362.50 1469.25 1296.25Aug 11 1381.50 1360.50 1447.75 1279.50Sep 11 1371.00 1349.00 1376.00 1287.50PHYSICALSs US No.2 Yellow Gulf ports cif Rotterdam ($/mt)Oct 11 561.10 552.70 588.70 531.30s Brazil cif Rotterdam ($/mt)Jun 11 551.90 549.10 586.30 531.50s Argentina cif Rotterdam ($/mt)Apr 11 519.70 516.80 555.80 490.10FUTURESt TGE Non-GMO Soyabean Futures (¥/mt)Apr 11 48510 49500 49830 46900Jun 11 52000 51350 52890 47360Aug 11 57590 58400 58400 48380Oct 11 57200 57400 57400 50580

SOYA OILs CBOT (¢/lb) (opening prices)May 11 57.32 55.88 60.13 53.15Jul 11 57.89 56.45 60.58 53.74Aug 11 58.06 56.65 60.69 53.93Sep 11 58.16 56.76 58.16 54.02PHYSICALSs Crude Dutch ex-mill fob (€/mt)Apr 11 925.00 893.00 1058.00 885.00May 11/Jul 11 931.00 893.00 1035.00 888.00s Refined, bleached & deodorised ex-tank Rotterdam (£/mt)Mar 11 867 848 1017 834Apr 11 867 848 959 834May 11 877 859 946 842Jun 11 877 859 918 842s US export fob Gulf crude (previous day’s prices) ($/mt)Mar 11 1286 1245 1352 1188May 11 1299 1258 1363 1200Jul 11 1303 1262 1303 1204s US, crude rail basis Central Illinois (¢/lb) (previous day’s prices) 55.82 53.98 57.48 51.24F fob Argentina compared to CBOT, sellers $/mtJan 11 + 70 + 70 + 70 + 70Feb 11 + 80 + 80 + 80 + 80Mar 11 + 90 + 90 + 90 + 90F Fob Argentina compared to CBOT, buyers $/mtJan 11 + 25 + 25 + 25 + 25Feb 11 + 40 + 40 + 40 + 40Mar 11 + 30 + 30 + 30 + 30

RAPESEED/CANOLAFUTURESs ICE Futures Canada (C$/mt) (opening prices)May 11 584.10 574.00 626.10 430.75Jul 11 592.40 581.50 633.10 432.00Nov 11 569.90 561.00 605.00 436.50Jan 12 575.20 565.00 577.50 519.20s Liffe rapeseed (€/mt)May 11 478.00 462.25 497.00 412.50Aug 11 432.25 417.00 457.75 387.00Nov 11 433.00 420.00 460.50 389.00Feb 12 436.25 421.00 462.25 391.25 Volume: 20 15 2330 8PHYSICALSs UK rapeseed, delivered Erith (£/mt) (buyer)Mar 11 410 395 415 375s UK rapeseed, delivered Erith (£/mt) (seller)Mar 11 412 397 415 377

RAPESEED OILs Crude Dutch/EU, fob mill (€/mt)May 11/Jul 11 1010.00 985.00 1120.00 960.00Aug 11/Oct 11 960.00 935.00 1100.00 900.00s Crude fob Rotterdam ($/mt) 1585 1575 1650 761s Refined, ex-works UK (£/mt) 1066 1046 1167 836s Hardened, ex-works UK (£/mt) 1156 1137 1287 926s Refined, bleached & deodorised ex-tank UK, broker price (£/mt)Mar 11 979 951 1050 925Apr 11 979 951 1048 925May 11 976 951 1018 925Jun 11 976 951 1018 925

SUNFLOWERSEED OILt Crude EU origin ex-tank cif RotterdamMay 11/Jun 11 1355.00 1365.00 1500.00 1340.00t Crude, fob Rotterdam ex-refinery ($/mt) 1595 1620 1725 872t Refined, ex-works UK (£/mt) 1090 1094 1174 972t Hardened, ex-works UK (£/mt) 1210 1215 1295 1092s Refined, bleached & deodorised ex-tank Rotterdam (£/mt)Mar 11 1033 1020 1167 1009Apr 11 1033 1020 1150 1009May 11 1033 1020 1109 1009Jun 11 1033 1020 1070 1009s US export fob Gulf crude ($/mt) (previous day’s prices)Mar 11 1594 1554 1660 1496May 11 1607 1566 1672 1509Jul 11 1612 1571 1612 1513

SUNFLOWERSEEDF US hulled cif UK ($/mt) 1470 1470 1600 1470

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GRAINS

SEEDS AND PULSES

OILSEEDS, OILS AND FATS


ANALYSIS | PRICES

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FEEDS

F Ukraine unhulled Black Sea Origin ($/mt)Mar 11 615.00 615.00 680.00 455.00F US hulled ex-store UK (£/mt) 940 940 940 940

GROUNDNUT/PEANUT OILCrude fob Argentina ($/mt)Apr 10 unq unq unq unqF Crude any origin cif Rotterdam ($/mt) Mar 11 1600 1600 1600 1375F US crude fob S. East (¢/lb) (previous day’s prices) 74.00 74.00 75.00 74.00

COTTONSEED OILs US crude fob Mississippi Valley (¢/lb) (previous day’s prices) 57.82 55.98 60.62 53.95s US export fob Gulf crude ($/mt) (previous day’s prices)Mar 11 1374 1333 1440 1276May 11 1387 1346 1451 1289Jul 11 1391 1350 1391 1293

SESAME SEEDGuatemala hulled 99.9% purity ex-store (£pence/lb) unq unq unq unqGuatemala cif Europe ($/mt) unq unq unq unqF Nigerian natural 98% cleaned fob Lagos ($/mt) 1325 1325 1325 1200Nigeria natural 99.95% UK cleaned ex-store UK (£/mt) unq unq unq unqF Sudan natural cif Europe ($/mt) 1400 1400 1400 1300F India natural cif Europe ($/mt) 1275 1275 1475 1275F Indian origin mechanically hulled & sun dried 99.9% pure $/mt 1825 1825 1825 1825F Ethiopian natural (Humera type) fob Djibouti 1400 1400 1400 1350F Ethiopian natural (Wollega type) fob Djibouti 1400 1400 1400 1325

MAIZE/CORN OILUS bulk fob Midwest (¢/lb) (previous day’s prices)F Crude 75.00 75.00 75.00 60.00Refined 83.50 83.50 83.50 68.50

PALM OILFUTURESs Kuala Lumpur Commodity Exchange, closing (M$/mt)Apr 11 3378 3323 3955 3320May 11 3345 3289 3906 3261Jun 11 3326 3270 3695 3262Jul 11 3311 3255 3428 3247 Total volume : 29824 45341 48704 17660PHYSICALSs Crude Malaysia/Sumatra, cif Rotterdam ($/mt) May 11/Jun 11 1155.00 1130.00 1335.00 1130.00Jul 11/Sep 11 1155.00 unq 1155.00 1140.00s Crude oil, cif duty paid Liverpool ($/mt) 1357 1352 1532 686s Refined oil, ex-works UK (£/mt) 963 949 1083 806s Hardened oil, ex-works UK (£/mt) 1023 1008 1143 866F Refined, bleached & deodorised ex-tank Rotterdam (€/kg)Jan 09 unq unq unq unqs Malaysia crude (broker), cif Merseyside ($/mt) 1165 1150 1350 1135s Malaysia refined, bleached & deodorised fob ($/mt) May 11/Jun 11 1155.00 1135.00 1355.00 1120.00t Malaysia refined, bleached & deodorised cif Rotterdam ($/mt)May 11/Jun 11 1202.50 1205.00 1395.00 1185.00s Malaysia olein, refined, bleached & deodorised fob ($/mt)May 11/Jun 11 1155.00 1135.00 1310.00 1135.00t Crude olein, fob Rotterdam ($/mt) 1445 1475 1610 819s Refined olein, ex-works UK (£/mt) 977 959 1104 924s Hardened olein, ex-works UK (£/mt) 1025 1010 1145 969s Malaysia stearin, refined, bleached & deodorised fob ($/mt)Apr 11 1140.00 1130.00 1300.00 1125.00

COCONUT OILs Crude Philippines/Indonesia, cif Rotterdam ($/mt)Mar 11/Apr 11 1980.00 unq 1950.00 1940.00Apr 11/May 11 1940.00 1870.00 2280.00 1800.00May 11/Jun 11 1875.00 unq 1860.00 1840.00Jun 11/Jul 11 1850.00 1890.00 1900.00 1800.00t Crude, cif duty paid Liverpool ($/mt) 1980 2015 2385 981F Refined ex-works UK (£/mt) 1101 1101 1101 1101F Hardened ex-works UK (£/mt) 1151 1151 1151 1151

PALM KERNEL OILs Crude Malaysia/Indonesia, cif Rotterdam ($/mt)Apr 11/May 11 1825.00 1820.00 2330.00 1820.00F RB&D Palm Kernel Oil, fob Malaysia

Mar 11 2355.00 2355.00 2355.00 1898.50t Crude, cif duty paid Liverpool ($/mt) 2081 2131 2556 1008t Refined, ex-works UK (£/mt) 1345 1362 1688 1123t Hardened, ex-works UK (£/mt) 1396 1413 1738 1173

CASTOR OILt Any origin fot Rotterdam ($/mt)Feb 11/Mar 11 2800 2925 2950 2070t Castor Oil Commercial fob Kandla ($/mt)Apr 11/May 11 2375 2380 2665 1850s Castor Oil fsg fob Kandla ($/mt)Apr 11/May 11 2400 2390 2675 1875

FISH OILF Crude, cif Rotterdam ($/mt) 810 810 810 810

LARDF UK ex-works (packers) (£/mt)Jan 11 720 720 795 690F EU packers delivered UK, boxed (£/mt)Feb 11 780 780 835 750F EU refined delivered UK, boxed (£/mt)Feb 11 760 760 860 730

TALLOWs US technical edible fob Houston ($/mt)Mar 11 1180 1170 1225 690F US top white fob Houston ($/mt)Mar 11 1140 1140 1190 680F US packer beef fob Houston ($/mt)Mar 11 1140 1140 1190 680s US bleachable fancy fob Houston ($/mt)Mar 11 1120 1110 1150 660s US yellow grease fob Houston ($/mt)Mar 11 1090 1070 1100 610F Australia top white in bulk, fob Australian ports ($/mt)Aug 10 760 760 830 710F Australia extra fancy in bulk, fob Australian ports ($/mt)Aug 10 710 710 760 650F Australia bleachable fancy in bulk, fob Australian ports ($/mt)Aug 10 710 710 760 650F Max 15% free fatty acid, ex works Rotterdam (£/mt)Mar 11 625 625 630 600F UK high grade, delivered UK (£/mt) 630 630 630 370F UK technical use only grade basis 15% ffa, delivered UK (£/mt) 580 580 580 290

COPRAs Philippines, cif Rotterdam ($/mt)Apr 11/May 11 1250.95 1200.00 1454.00 1111.00

OLIVE OILNaked, EU origin in bulk ex tank UKs Extra virgin less than 0.8% ffa (£/mt) 1977 1905 1977 1881s Olive oil less than 1% ffa (£/mt) 1855 1816 1855 1829

ACID OILSt Palm fatty acid distillate, fob Malaysia ports ($/mt)Apr 11 810.00 860.00 1045.00 810.00F Palm fatty acid distillate cif Merseyside ($/mt) 970 970 1175 970F Palm fatty acid distillate, ex-tank Liverpool (£/mt) 650 650 790 650F Mixed hard, ex-tank Liverpool (£/mt) 600 600 700 600s Mixed soft ex-tank Liverpool (£/mt) 645 630 650 600F Soya/Sunflower/Maize ex-tank Liverpool (£/mt) 680 680 700 630

FOSFA Prices fixed by the Price Settlement Committees of the Federation of Oils, Seeds and Fats Associations Ltd. (FOSFA International) for settlement purposes in respect of excess or deficit deliveries-

ALL PRICES IN US$ PER METRIC TONNE

Malaysian/Indonesian Crude Palm Kernel Oil (basis 5.5% FFA on Arrival) Contract No 54May 21 1925.00 May 24 1847.00 Philippine/Indonesian Crude Coconut Oil (basis 3% FFA on Ar-rival) Contract No 54Mar 21 1948.00 Mar 24 1943.00 Any Origin Crude Groundnut Oil (basis 2% FFA on Arrival) Contract No 54Mar 21 1683.50 Mar 24 1673.50 Malaysian/Sumatran Crude Palm Oil (basis 5% FFA on Arrival) Contract No 80Mar 21 1180.00

Mar 24 1133.50 Malaysian RBD Palm Oil Cif Rotterdam (Contract No 81)Mar 23 1206.50 Malaysian RBD Olein CIF Rotterdam (Contract No 81)Mar 23 1220.00 Malaysian RBD Stearin CIF Rotterdam (Contract No 81)Mar 23 1203.50

SOYAMEALFUTURESt CBOT (opening prices) ($/short ton)May 11 360.90 364.50 392.70 346.10Jul 11 365.20 368.20 392.70 348.90Aug 11 365.90 368.70 385.40 345.60Sep 11 364.80 366.10 369.50 346.00PHYSICALSF Brazil pellets 48% ex-Tilbury (£/mt)Mar 11 262.00 262.00 272.00 262.00t Brazil pellets 48%, cif Rotterdam ($/mt)Afloat 421.50 429.50 482.50 418.00Apr 11 415.00 427.00 468.00 415.00May 11/Sep 11 415.00 422.00 465.00 410.00t Argentina pellets 45%, cif Rotterdam (€/mt)Mar 11 412.00 420.00 465.00 410.00Apr 11 410.00 419.00 467.00 406.00s UK produced 49% oil & protein (‘hi-pro’) ex- mill Seaforth UK bulk (£/mt)Mar 11 288.00 284.00 317.00 284.00Apr 11 288.00 284.00 288.00 284.00May 11/Oct 11 285.00 279.00 317.00 279.00t Non-GM Soyameal 49% profat ex -mill Seaforth UK bulk (£/mt)Mar 11/Apr 11 324.00 326.00 357.00 321.00May 11/Oct 11 320.00 321.00 332.00 315.00s US/Dutch, 49% (‘hi-pro’), ex E.Coast UK (£/mt)Mar 11/Apr 11 288.00 283.00 319.00 283.00May 11Oct 11 285.00 277.00 309.00 277.00t Hamburg, fob ex mill (€/mt)Mar 11 299.00 303.00 347.00 298.00Apr 11 298.00 300.00 347.00 294.00May 11 296.00 298.00 307.00 291.00

RAPESEED MEALs Lower Rhine fob (€/mt)May 11/FH Jul 11 191.00 185.00 235.00 175.00Aug 11/Oct 11 180.00 177.00 180.00 165.00s EU 34% p+o, 00, ex-store Exmouth/Teignmouth (£/mt) Mar 11/Jul 11 185.00 189.00 213.00 185.00Aug 11/Oct 11 177.00 173.00 178.00 172.00Nov 11/Apr 11 181.00 179.00 213.00 179.00s UK-produced HP 37%, 00, resell Erith (£/mt)Mar 11/Apr 11 163.00 154.00 204.00 154.00May 11/Jul 11 162.00 155.00 200.00 155.00s UK-produced, ex-mill Liverpool (£/mt)Mar 11/Apr 11 178.00 159.00 210.00 159.00May 11/Jul 11 178.00 158.00 203.00 158.00

SUNFLOWERSEED MEALt Argentina/Uruguay pellets 36/37% p+o fob Rotterdam (€/mt)Apr 11/Jul 11 180.00 185.00 210.00 180.00t Argentina/Uruguay pellets 32/33% p+o ex-store Liverpool (£/mt)Mar 11/Apr 11 174.00 176.00 205.00 174.00s EU pellets 29% p+o ex-store Southampton (£/mt)Mar 11/Apr 11 152.00 148.00 175.00 148.00May 11/Oct 11 157.00 149.00 177.00 149.00

PALM KERNEL CAKEt Palm Kernel expellers fob Rotterdam (€/mt)Afloat 138 140 175 138Apr 11/May 11 138 140 176 138F Indonesia/Malaysia 21/23%, ex-store UK (£/mt)Mar 11/Oct 11 144.00 144.00 159.00 144.00

COTTON MEALArgentina extracted 37/38%, ex-mill Tibury (£/mt)May 09 unq unq unq unq

COPRA MEALPhilippines/Indonesia expellers ($/mt) unq unq unq unqPhilippines/Indonesia extracted ($/mt) unq unq unq unq

MAIZE/CORN GLUTEN FEEDUS pellets 23/24%, cif Rotterdam ($/mt)Jan 11 unq unq unq unqUS pellets 23/24%, ex Tilbury UK (£/mt)Jan 11 unq unq unq unq

CITRUS PULP PELLETSs EU, cif Rotterdam (€/mt)Apr 11 201 200 218 200


ANALYSIS | PRICES18

EXOTICS AND MINORS

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TAPIOCAThai hard pellets, fob Rotterdam (€/mt)Jan 11 unq unq unq unq

FISH MEALUK-produced ‘Provimi 66’ in bags ex-store Hull/Grimsby (£/mt) unq unq unq unqF Peru/meal 65% Protein cif UK (£/mt)Mar 11 /Apr 11 1090 1090 1375 1000Peru/meal ex store UK (£/mt)

MEAT AND BONE MEALF 50% protein 10% oil high grade ex-works England (£/mt) 135.00 135.00 135.00 135.00

POULTRY MEAT MEALF 64% protein, 12% oil ex-works England (£/mt) 450.00 450.00 450.00 450.00

ESSENTIAL OILSIn $/kg unless statedLondon/Rotterdam/Hamburg basisAmyris Oil Haiti spot unq unq unq unq Haiti fwd unq unq unq unqAniseed OilF China spot 27.00 27.00 28.00 27.00t China cif 23.80 24.00 26.00 23.80Bay OilF West Indies spot 77.00 77.00 77.00 77.00Camphor OilF China spot 8.00 8.00 8.00 8.00F China cif 7.00 7.00 7.00 7.00Cananga OilF Java cif 82.00 82.00 82.00 82.00Caraway Oil Egypt spot unq unq unq unqF Egypt fwd fob 95.00 95.00 95.00 95.00Cardamom OilF Spot 440.00 440.00 480.00 400.00F Cif 400.00 400.00 420.00 380.00Cassia OilF China fwd 39.00 39.00 39.00 38.00Cedarwood OilF China cif 11.00 11.00 11.00 11.00Cinnamon Leaf OilF Sri Lanka spot 26.00 26.00 26.00 20.00F Sri Lanka cif 24.00 24.00 24.00 19.00Cinnamon Bark Oil (60%) Spot unq unq unq unqCitronella OilF Sri Lanka spot 32.00 32.00 32.00 28.00F Sri Lanka cif 26.00 26.00 26.00 23.50F Java cif 20.00 20.00 20.00 15.00F China cif 20.00 20.00 20.00 16.00Clove Leaf OilF Madag. spot 25.00 25.00 25.00 24.00F Madag. c&f 22.00 22.00 22.00 22.00 Indonesia spot unq unq unq unq Indonesia cif unq unq unq unqCoriander Seed OilF Russian Spot 87.00 87.00 87.00 87.00Cumin Oil Iran/Egypt spot unq unq unq unq Iran/Egypt fwd unq unq unq unqD’limoneneF Brazil spot 9.50 9.50 9.50 6.50 Brazil fob unq unq unq unqEucalyptus OilF China spot 17.50 17.50 17.80 16.00F China cif 15.00 15.00 16.00 14.00Garlic OilF Mexico spot 38.00 38.00 38.00 38.00F China spot 80.00 80.00 80.00 80.00F China fwd 75.00 75.00 75.00 75.00Geranium OilF China spot 300.00 300.00 300.00 300.00F China cif 280.00 280.00 280.00 280.00F Egypt fwd fob 325.00 325.00 480.00 260.00Ginger OilF China spot 84.00 84.00 84.00 80.00F China cif 68.00 68.00 68.00 68.00 India cif unq unq 140.00 140.00Lavender Spike Oil Spot unq unq unq unqLemon oilF Argentina spot 35.00 35.00 35.00 35.00F Argentina fob 31.00 31.00 31.00 31.00Lemongrass OilF Cochin spot 20.00 20.00 20.00 20.00F Cochin cif 19.00 19.00 19.00 19.00Lime OilF Mexico spot 28.50 28.50 28.50 28.50 Mexico fob unq unq unq unqLitsea Cubeba Oil

F China spot 26.00 26.00 26.00 26.00F China cif 22.00 22.00 22.00 11.50Menthol CrystalsF China spot 33.00 33.00 37.00 33.00F China cif 30.00 30.00 34.00 30.00F India spot 33.00 33.00 36.00 33.00F India cif 30.00 30.00 34.00 30.00Nutmeg OilF Indonesia spot 88.00 88.00 88.00 88.00F Indonesia fwd 83.00 83.00 83.00 83.00 Grenada c&f unq unq unq unqOrange PeraF Brazil spot 9.75 9.75 10.00 6.80 Brazil fob unq unq 8.00 6.00Patchouli OilF Indonesia spot 88.00 88.00 108.00 88.00F Indonesia cif 78.00 78.00 99.00 78.00Peppermint OilF China spot 28.00 28.00 28.00 28.00F China cif 20.00 20.00 20.00 20.00 Brazil spot unq unq unq unq Brazil fob unq unq unq unqF India Spot 28.00 28.00 28.00 28.00F India fwd 26.00 26.00 26.00 26.00Petitgrain OilF Paraguay spot 34.00 34.00 34.00 34.00F Paraguay fob 28.00 28.00 28.00 28.00Pimento Leaf OilF Jamaica spot 92.00 92.00 92.00 92.00Sandalwood OilF E.Indies spot 2125 2125 2125 2000 E.Indies cif unq unq unq unqSpearmint Oils China 60% spot 33.00 32.00 33.00 28.50F China 60% cif 30.00 30.00 30.00 26.00F China 80% cif 35.00 35.00 35.00 33.00Teatree OilF Australia spot 50.00 50.00 50.00 50.00F Australia c&f 45.00 45.00 45.00 45.00Terpineol M.U.F China spot 6.00 6.00 6.00 6.00F China cif 5.00 5.00 5.00 5.00Vetivert OilF Indonesia cif 160.00 160.00 160.00 150.00F China cif 90.00 90.00 90.00 90.00F Indonesia spot 170.00 170.00 170.00 160.00

WAXES AND GUMSGum arabic ($/mt)t Sudan Kordofan fob 3700 3800 4200 2150Nigerian cleaned cif, main European port (€/mt)FNo.1 1356 1356 1356 1356F No.2 (€/mt) 1461 1461 1461 1461Guar Gum Powder ($/mt)s 100 mesh 3500 cps fob KandlaSpot 2995 2970 2995 1785Mar 11 2895 2870 2895 1685s 200 mesh 3500 cps fob KandlaSpot 3015 2990 3015 1805Mar 11 2915 2890 2915 1705s 200 mesh 5000 cps fob KandlaSpot 3010 2985 3010 1800Mar 11 2910 2885 2910 1700s 200 mesh 5500 cps fob KandlaSpot 2871 2846 2871 1661Mar 11 2771 2746 2771 1561s 200 mesh 3500 cps technical grade fob KandlaSpot 2920 2895 2920 1710Mar 11 2820 2795 2820 1610Beeswax ($/mt) main European port basisF Australia c&f 6300 6300 6300 6300F Ethiopia c&f 4200 4200 4200 4200F Tanzania c&f 5150 5150 5150 5150F NZ c&f unq unq unq unqChina c&f 4000 4000 4000 4000CandelillaF Candelilla fob Mexico ($/mt) 4750 4750 4750 4750Carnauba (fob Brazil port) ($/mt)F Fatty grey 5180 5180 5180 5180F Light fatty grey 5622 5622 5622 5511F Prime yellow 8157 8157 8378 7937Shellac ($/kg)OrangeFCif 13.00 13.00 13.00 11.00Lemon 1FSpot UK 13.95 13.95 13.95 11.95FCif 13.50 13.50 13.50 11.50Lemon 2FSpot UK 13.85 13.85 13.85 11.85FCif 13.40 13.40 13.40 11.40Pure buttonFSpot UK 14.50 14.50 14.50 12.50FCif 14.20 14.20 14.20 12.20India seedlac OBSFSpot UK 13.00 13.00 13.00 11.00FCif 12.70 12.70 12.70 10.70

HERBS AND SPICESPrompt shipment in US$/mt unless otherwise stated

CardamomsF Guatemala bold green (nominal approx. 8mm) 26000 26000 27000 26000F Guat. seeds 29000 29000 32000 29000F Guat. (MYQ) 20000 20000 25500 20000Cassia ligneaChinaFWhole cif 2100 2100 2100 2100F China whole c&f Indian ports 825 825 825 825F Broken cif 2100 2100 2100 2100Indonesia CassiaF Corintji b broken & cleaned spot 1350 1350 1350 1350F Corintji b broken & cleaned cif 1250 1250 1250 1250F Corintji a sticks spot 1750 1750 1750 1750F Vera a sticks spot 1750 1750 1750 1750F Vera a sticks cif 1650 1650 1650 1650F Corintji a sticks cif 1650 1650 1650 1650Caraway seedt Dutch ex store (€/mt) 1617 1629 1907 1617t East Europe fot Rotterdam (€/mt) 1547 1558 1830 1547Celery seedF India ASTA cif 1500 1500 1600 1500ChilliesF Africa birds eye 2009 crop cif 6200 6200 6200 6200F India S4 cif 2500 2500 2500 1800Cinnamon barkF Seychelles cif 1800 1800 1800 1800F Madagascar cif 1100 1100 1100 1100F Sri Lanka 3/6 inch sticks 13000 13000 13000 10500Sri Lanka chips unq unq unq unqClovesF Indonesia c&f Singapore 8000 8000 8000 6300F Madagascar cif Singapore 7150 7150 7150 5700s Madagascar cif European ports (€/tonne) 5850 5300 5850 4500s Sri Lanka fob 9000 8000 9000 5600Coriander seedF East European cif whole 1150 1150 1150 1150F East European cif split 1050 1050 1050 1050F India cif whole 1150 1150 1150 1150F Russia cif whole 1250 1250 1250 1250Cumin seeds India cif 3600 3400 3600 3200s Iran cif 3400 3300 3400 3100s Syria cif 3500 3200 3500 3000Dill seedF India cif 1450 1450 1500 1450Fennel seedF India cif 2600 2600 2600 2150F Egypt cif 2400 2400 2400 2100Fenugreek seedF India cif 850 850 850 800Australia cif unq unq unq unqGarlic F Garlic dehydrated flakes Grade A c&f main European Ports 4700 4700 4700 4700F Garlic granules top grade c&f main European ports ($/mt) 7200 7200 7200 7200F Garlic granules first grade c&f main European ports ($/mt) 3200 3200 3200 3200F Garlic powder c&f main European ports ($/mt) 2200 2200 2650 2200Gingert Nigeria split cif 4100 4200 4600 4000F Cochin cif European ports ($/mt) 5000 5000 5000 5000F China whole cif European ports ($/mt) 5500 5500 5500 5500F China sliced cif European ports ($/mt) 4500 4500 4500 4200MaceF East Indies broken No.2 cifSpot 30000 30000 30000 28000Shipment 29000 29000 29000 27000F Papua broken No.2 cif 26000 26000 26000 26000NutmegIndonesia sound shrivelss Spot 19000 17500 19000 14800F Shipment 17000 17000 17000 14000Indonesia BWPs Spot 14000 12500 14000 11000F Shipment 12000 12000 12000 10500Indonesia ABCDs Spot 19900 18500 19900 15200F Shipment 17500 17500 17500 15000Pepper (Black)Sarawak, black labelSpot unq unq unq unq

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ANALYSIS | PRICES

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s Shp 5800 5700 5800 5150Brazil, grade 1sSpot 5500 5300 5500 5150s Shp 5400 5200 5400 5050India, MG 1FSpot 5650 5650 5650 5300F Shp 5550 5550 5550 5200Lam Pong, min 500 g/lFSpot 5800 5800 5800 5350F Shp 5600 5600 5600 5400Vietnamese black pepper, min 550 g/lsShp 5500 5300 5500 5000Pepper (White)s Muntok, white faqSpot 8200 8100 8350 7450s Cif 8100 8000 8200 7350Sarawak white faq ($/mt) Spot unq unq 7900 7800Cif unq unq 7750 7700ChinasCif 7750 7650 7800 7300Vietnamese white peppersSpot 7950 7800 7950 7500Shp 7750 7700 7750 7450Pimentos Jamaica spot 8400 8200 8400 6200s Jamaica cif 8200 8000 8200 6050F Mexico spot 4600 4600 4600 4050F Mexico cif 4500 4500 4500 3800s Guatemala/Honduras spot 6000 5800 6000 4700s Guatemala/Honduras cif 5700 5500 5700 4500PoppyseedF Turkish White 99.9% pure fob Turkey ($/mt)May 10 2905 2905 3665 2815F Czech Euro blue fob (€/mt) 1975 1975 1975 1975F Euro blue ex-store UK (£/mt) 880.00 880.00 880.00 880.00SaffronF Iran c+f Europe Sargol ($/kg) 4500 4500 4500 4500TurmericF Madras fingers cif 4100 4100 4200 3400F Madras fingers fob 4900 4900 4000 3200VanillaF Madagascar type, extract grade, delivered US ($/kg) 25.00 25.00 25.00 25.00F Madagascar origin standard grade, cif Europe (€/kg) 20.00 20.00 20.00 20.00

EDIBLE NUTSAlmondsF 23/25 US Non Pareil select cif European Main Ports ($/mt) 5600 5600 5700 5280F US Standard sheller run cif European Main Ports new crop ($/mt) 4600 4600 5150 4400Apricot Kernels (main European ports)F Chinese c&f ($/mt) 5000 5000 5150 4850 Turkish c&f ($/mt) unq unq unq unq Iran c&f ($/mt) unq unq unq unqBrazilsF Medium ($/lb) 3.98 3.98 3.98 3.75F Midgets ($/lb) 3.98 3.98 3.98 3.75Cashew kernels (Indian) ($/lb)F Spot UK 240s 4.45 4.45 4.45 4.15s Spot UK 320s 4.07 4.05 4.07 3.90s Spot UK 450s 3.93 3.90 3.93 3.68F Spot UK 320s (£/mt) 5315 5315 5584 5315Desiccated coconutEx-store UK (£/mt)sFine grade 2150 2100 2150 1850 Medium grade unq unq 1925 1850Sri Lanka (faq), c&f Europe ($/mt)sFine grade 2800 2700 3095 2620s Medium grade 2710 2660 3090 2620F Philippines (faq), fine & medium grade c&f Europe ($/mt) 2990 2990 3060 2640t Indonesia fine & medium grade c&f Europe ($/mt) 2650 2700 2800 2650sFine Grade fob Sri Lanka ($/mt) 2710 2610 3005 2530Hazelnut kernels Turkey Levants ex-store UK duty paid (£/mt)FStandard 1 (13/15) 4500 4500 4600 4400F Standard 2 (11/13) 4300 4300 4400 4200MacadamiasF Australian macadamia nuts (Style1) ex-store UK (£/mt) 10400 10400 10400 10400F Australian macadamia nuts (Style 2) ex-store UK (£/mt) 10100 10100 10100 10100F South African macadamia nuts (Style1) ex-store UK (£/mt) 10650 10650 10650 10250F South African macadamia nuts (Style 2) ex-store UK (£/mt) 10200 10200 10200 9850F Australian macadamia nuts (Style 4) ex store UK (£/mt) 9600 9600 9600 9600F South African macadamia nuts (Style 4) ex store UK (£/mt)

9650 9650 9650 9400Peanuts/groundnutsUS 2010 Runners crop cif N.W European Ports (EU spec) ($/mt) 38/42 Mar 11 unq unq unq unq40/50 Mar 11 unq unq unq unqArgentina runners 2011 new crop c&f NW European Ports ($/mt)t 38/42 Mar 11 (nominal) 1630 1650 1650 1500F 40/50 Mar 11 (nominal) 1600 1600 1600 1470 India 60/70 Bold ($/mt) 2010 crop Mar 11 unq unq 1280 1280China Hsujis cif N.W European ports 2010 crop ($/mt)F 40/50 Mar 11/Apr 11 1850 1850 1850 1650PecansUS kernels ex-store UK duty paid (£/mt) new cropFhalves 10020 10020 10020 10020F pieces 9600 9600 9600 9600PistachiosF Iran, 28/30 (raw in shell) fot Hamburg (€/mt)Mar 11 5800 5800 6500 5700F Iran, 20/22 (raw in shell) fot Hamburg (€/mt)Mar 11 6600 6600 7500 6300F US 21/25 (naturally opened) New Crop fas California ($/lb)Mar 11 3.60 3.60 4.00 3.60 US 22/26 (mechanically opened) New Crop fas California ($/lb)Jan 11 unq unq unq unqWalnutsIndia duty paid ex-store UK (£/mt)sLight halves 7020 6850 7235 6850s Light broken 6210 6060 6210 6060s Light amber halves 5800 5660 5800 5000s Light amber broken 5110 4985 5110 4950California duty paid ex-store UK (£/mt)sLight halves 80%/pieces 7575 7390 7950 7390s Large light pieces 6610 6450 6800 6450

DRIED FRUITSultanass Turkish specially cleaned standard No 9 cif UK (£/mt) 1617.15 1514.59 1639.89 1457.05 S A Orange River crop2011 crop n/a n/a n/a n/aF Australian 5 Crown (where available) cif UK (£/mt)2010 crop 2150 2150 2150 2125 Greek type No.2 cif UK (£/mt) unq unq unq unqF Iran natural sultanas (Gouchan) cif UK (£/mt) 2010 crop 1337.50 1337.50 1337.50 1250.00Currantss Greek Vostizza cif UK (£/mt) 1680.64 1615.56 1680.64 1535.69s Greek Provincial crop cif UK (£/mt) 1592.18 1528.33 1592.18 1452.11Raisinst Californian Thompson seedless raisins cif UK (£/mt) 1597.47 1608.05 1637.50 1537.72 S. African Thompson seedless raisins cif UK (£/mt)2011 crop n/a n/a n/a n/aF Australia Lexia raisins cif UK (£/mt) 2010 crop 2237.50 2237.50 2237.50 2237.50Apricots F Turkish whole pitted No. 4 cif UK ($/mt) 4875 4875 5875 4875F Turkish Industrial Quality ($/mt) 4125 4125 4875 4125F Turkish whole pitted No.2 cif UK ($/mt) 5375 5375 6375 5375s Turkey Apricots Size 8 cif UK ($/mt) 4500 4125 5250 4125Datess Iranian pitted Sayer dates cif UK (£/mt) 886.32 880.88 925.53 875.71FigsF Turkey Lerida Figs No.6/7 fob Izmir (£/mt) 2025 2025 2025 2025

HONEYCif main European port ($/mt)F Chinese white 2325 2325 2350 2325F Chinese extra light amber 2300 2300 2330 2300F Chinese light amber 2300 2300 2330 2300F Mexican Yucatan 3615 3615 3615 3600 Mexican Orange Blossom unq unq unq unqF Argentine 25mm 3575 3575 3575 3575F Argentine 34mm 3425 3425 3550 3400F Argentine 50mm 3400 3400 3550 3400F Argentine 85mm 3375 3375 3425 3375F Australian extra light/light amber 3750 3750 3750 3700

COCOAFUTURESt Liffe (£/mt)May 11 1943 2073 2397 1932Jul 11 1948 2073 2324 1945Sep 11 1950 2074 2284 1950Dec 11 1960 2075 2121 1960 Total volume : 14115 14115 18499 7436t ICE Futures US ($/mt) (1st column opening)May 11 3004 3200 3745 2853Jul 11 3015 3200 3680 2867Sep 11 3025 3197 3640 2883Dec 11 3040 3202 3290 3015INDICATORSICCO daily price (previous day’s prices)t SDRs 1934.55 2089.37 2367.92 1907.40t $/mt 3056.01 3318.59 3730.25 2921.62PHYSICALSBeans, liquor & butter ex-dock US spot ($/mt) (previous day’s prices)s Main crop Ivory Coast beans 3842 3727 4257 3285s Main crop Nigeria Beans ($/mt) 3817 3702 4235 3702s Ghana maincrop 3955 3840 4332 3400s Sanchez Faq beans 3642 3482 4010 3208s Sulawesi Saq beans 3567 3442 3994 3434s Ecuador liquor 3742 3627 4179 3343s Ecuadorian butter (£/mt)Spot 3517 3466 3762 3099s African type pure pressed butter 5058 4878 5841 4361DIFFERENTIALSIvory Coast beans, cif UK/NE based on London Terminal (£/mt)Mar 11 unq unq F Ghana beans, cif UK/NE based on London Terminal (£/mt)May 11 185.00 185.00

COFFEEFUTURESs Liffe coffee futures $/mt (opening price)Mar 11 2525 2505 2575 2005May 11 2524 2538 2615 2023Jul 11 2416 2401 2492 2035Sep 11 2430 2415 2490 2234F Liffe ($/mt)Mar 11 2470 2505 2569 2014May 11 2510 2556 2620 2030Jul 11 2411 2408 2490 2042Sep 11 2427 2418 2461 2345t ICE Futures US ¢/lb (opening price)May 11 265.35 273.30 293.65 231.90Jul 11 268.20 274.05 295.50 224.75Sep 11 270.45 275.25 296.75 232.50Dec 11 271.80 unq 271.80 268.75s ICE Futures US ¢/lb (closing price)Mar 11 266.30 264.00 292.35 230.50May 11 268.50 266.35 291.00 232.65Jul 11 270.75 268.35 293.00 231.55Sep 11 272.55 269.50 294.75 226.30t Sao Paulo (BM&F) (¢/kg)May 11 342.00 345.00 370.00 266.50s TGE Coffee Futures Arabica (¥ per 69 kg bags)May 11 34810 34500 37050 31900Jul 11 35280 34800 37390 32100Sep 11 36190 35680 37150 32400Nov 11 36050 36210 36210 31970F TGE Coffee Futures Robusta (¥ per 100 kg)May 11 19690 17870 17870 15460Jul 11 19650 19650 19650 15680Sep 11 19520 19520 19520 17110Nov 11 19620 19620 19620 19620PHYSICALSICO (¢/lb)t Composite daily ICA (2001) 220.08 223.25 239.13 192.01ICO Colombian New York arabicas 300.25 297.00 320.25 273.75ICO Colombian Bremen arabicat 294.00 297.74 322.39 270.46 ICO Colombian daily weighted averaget 296.88 297.40 321.41 273.50Arabicast New York arabica 287.19 290.69 316.44 257.25t Bremen/Hamburg 279.95 286.93 313.20 258.00Mild arabica other daily weighted averaget 282.84 288.43 314.49 257.70t Brazilian New York arabica 249.25 253.00 278.25 202.75Brazil Bremen arabicat 255.83 261.07 281.59 216.82Brazil daily weighted averaget 254.25 259.14 280.79 213.64Robusta

SOFTS


ANALYSIS | PRICES20

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t New York 124.17 124.67 128.17 101.00Le Havre/Marseille Robustat 118.43 119.44 122.84 95.60t Robusta Daily weighted average 119.35 120.28 123.62 96.64

RAW SUGARFUTURESt ICE Futures US (¢/lb) (1st column opening)May 11 27.05 27.45 32.94 25.94Jul 11 25.00 25.29 29.55 23.88Oct 11 23.99 24.10 27.44 22.83Mar 12 23.61 23.69 25.86 22.45PHYSICALSs ISO daily price (¢/lb) 25.59 24.93 32.57 23.91t ISO 15-day moving average (¢/lb) 25.64 26.32 30.48 25.64

WHITE SUGARFUTURESt Liffe ($/mt)May 11 713.00 704.50 798.70 667.10Aug 11 659.00 669.50 750.40 635.10Oct 11 640.70 646.50 694.70 609.30Dec 11 628.30 629.00 673.00 596.70 Volume: 11227 4020 F Sao Paulo crystal (BM&F) (¢/50kg) bagsJan 11 17.00 17.00 17.00 17.00PHYSICALS

MOLASSESF EU Cane Molasses (ex-tank ARA) €/100kg 15.30 15.30 15.30 15.30

TEAKenya Tea Auction multi origin ($/kg)s Best BP1 3.40 3.36 3.88 3.20t Best PF1 3.17 3.22 3.81 3.17

t Best P Dust 3.22 3.25 3.85 3.22t Best Dust 1 3.33 3.37 3.83 3.28s Good BP1 3.07 3.05 3.81 3.05t Good PF1 2.97 3.07 3.66 2.97Colombo Tea Auction Sri Lanka Origin (LKR/kg)F HG GR Bops 430 430 450 400t HG GR Bopfs 430 440 455 425s MD GR Bops 420 390 420 350s MD GR Bopfs 385 370 400 365t Nuwa Bops 360 440 440 260s Nuwa Bopfs 405 390 405 295t Uva Bops 310 340 375 300s Uva Bopfs 375 370 410 330Dhaka Tea Auction Bangladesh OriginF Large Brokens 172.50 172.50 177.50 172.50F Medium Brokens 105.00 105.00 182.00 105.00F Small Brokens 137.50 137.50 198.50 137.50F Plain Brokens 50.00 50.00 177.50 50.00F Best Fannings 190.00 190.00 207.50 190.00F Good Fannings 155.00 155.00 203.00 155.00s Medium Fannings 127.50 127.30 195.50 127.50F Plain Fannings 52.50 52.50 185.00 52.50Calcutta Tea Auction Indian originF Med DRS Broken 100.00 100.00 114.00 100.00 Med DRS Fanning unq unq unq unq Good DRS BR unq unq 140.00 130.00 Good DRS FN unq unq 130.00 130.00F Med Assam BR 105.00 105.00 135.00 105.00F Med Assam FN 105.00 105.00 125.00 102.00F Good Assam BR 128.00 128.00 150.00 128.00F Good Assam FN 124.00 124.00 140.00 124.00

PETROLEUM PRODUCTSFUTURESt CBOT ethanol ($/gallon)

Apr 11 2.476 2.483 2.602 2.239May 11 2.441 2.475 2.613 2.280Jun 11 2.440 2.475 2.617 2.288Jul 11 2.439 2.474 2.609 2.290s Brazil Ethanol (weekly) BM&F anhydrous $/litreMar 11 0.92 0.87 0.92 0.70t Nymex light crude oil ($/barrel) May 11 105.33 106.60 106.65 89.90Jun 11 105.87 107.07 107.27 91.04Jul 11 106.41 107.39 107.67 98.88Aug 11 106.90 107.45 107.45 104.82

COMMODITIESINDICESs REUTERS (Base: 18/9/31=100) 3258.67 3213.99 3384.39 3065.13t CRB Futures (Base: 1967=100) 353.76 357.03 362.89 322.83t GSCI Agricultural (Base: 1970=100) 516.37 526.00 563.87 485.00t GSCI Energy (Base: 1983=100) 356.14 358.09 359.07 296.78t GSCI Total Return (Base: 1970=100) 5405.53 5434.18 5494.24 4844.83

This Week

Last Week

2011 Low

2011 High

This Week

Last Week

2011 Low

2011 High

ANALYSIS | TRADING

Weak laws and fragmented sector stall exchange launchBy Ian Hart

KENYA is continuing to struggle to get an agri-cultural commodity exchange off the ground, citing a lack of laws and the fragmented nature of the farming sector.

Well known for its tea and coffee auctions in Mombasa and Nairobi, Kenya has struggled to set up a sophisticated exchange for grains and other commodities.

Currently, a number of partners led by the Na-tional Cereals and Pro-duce Board (NCPB) are driving efforts to set up such a market. Even though former chairman of the Nairobi Stock Exchange, Jimnah Mbaru, was appointed as chairman of the NCPB and championed the idea of an exchange, pro-gress has been slow.

One key problem is that an effective ware-housing scheme has not been set up which can handle a regular flow of supplies and store prod-uct when not required.

According to those working with the NCPB on a warehousing receipt system, farmers are not suf-ficiently aware and educated in the project, mean-ing supplies are unlikely to come forward.

Furthermore, global standards suggest the mini-mum delivery to a commodity exchange should be 100 bags of 90kg each, according to a Business Week report. Yet while exchanges in Ethiopia, South Africa, Europe and the US use this, for Ken-ya most farmers are smallholders and may not produce this volume in one season.

Farmers could join as groups or firm co-oper-atives to meet these requirements, but this is another hurdle to getting participation.

There is also a lack of laws surrounding the sec-tor, with the Commodi-ties Trading Bill and the Warehouse Bill yet to be debated in Parliament.

The lack of a com-modity exchange means that foreign agri-inves-tors have been put off or when they have en-tered the sector they have tended to skew their attention to the primary sector rather than value addition further down the chain.

“What the commodity exchange does is to eliminate two major risks faced by agro-inves-tors, namely price volatility and assures them of the market and supply. As a result, more invest-ments are pulled into the cereals growing mar-ket,” said Kenneth Kaniu, senior investment manager at Stanbic Investments.



MCX ready to go public amid huge turnover growthINDIA’S Multi-Commodity Exchange, the coun-try’s largest, looks set to go public this year, allow-ing investors to tap into the fast-growing sector.

Lamen Rutten, managing director and chief executive at MCX, told NDTV that the company had not set a deadline to file the next required document. “We will file the draft red hearing pro-spectus with the market regulator Securities and Exchange Board of India as and when we are ready,” he said.

However, everything points to the exchange operator going public this year, with Mr Rutten saying the company is only waiting for “the last box to be ticked”.

Currently, Financial Technologies has 31% a stake in MCX but this has to be brought down to 26% by September 2011 to comply with For-ward Markets Commission (FMC) regulations.

The exchange received an unconditional ap-proval from the FMC to launch an initial public offer in June last year.

On Friday, industry trading reached a mile-stone of Rs100trn ($2.2trn) in turnover. Mr Rut-ten said if the trend continues trading will hit Rs200trn by 2014. “2010 to 2020 will be the dec-ade of commodity derivatives and exchange-traded businesses,” he declared.

ENERGY

INDICES

“More investments are pulled into the cereals growing market.”

Kenneth Kaniu, Stanbic Investments


ANALYSIS | ENERGY

By Emile Mehmet

BRAZIL needs to invest more in biofuel produc-tion despite ranking as the number one destination for investment in renewables, to meet higher fu-ture demand, analyst FO Licht said on Tuesday.

“The investments (in Brazil) are still suffer-ing from the fallout of the financial crisis in 2008,” said Christoph Berg, managing director at FO Licht.

Brazil drew one quarter of the $5.6bn invested worldwide in biofuel production plants in 2010, or $1.76bn. Bio-fuels projects in the US and EU attracted $1.13bn and $893m respectively. But investments in Brazil are still perceived to be lagging behind a demand curve that is expected to take a steep up-ward turn through the end of the decade.

“Signals from the world market will prompt new investments probably later this year but certainly by next... The world will need Brazil-ian exports of ethanol,” Dr Berg said during the seventh FO Licht Sugar and Ethanol Confer-ence in Sao Paulo.

The analyst’s figures on investments include spending on biodiesel and advanced biofuels production as well. Brazil also saw the most ac-tivity among the world’s ethanol producers in terms of takeovers, accounting for an estimated $3.5bn out of $4.5bn in transactions.

The number of mergers and acquisitions grew substantially in Brazil’s ethanol sector after the worsening of the global financial crisis in late 2008 and 2009. The crisis hit hard several com-panies that had leveraged to expand.

Echoing FO Licht’s warning, Brazil’s sugar and ethanol industry association Unica said in-

vestments in ethanol production capacity would fall increasingly short of demand for biofuel from the country’s growing flex-fuel car fleet. Launched in 2003, these cars can run on any mix-ture of ethanol and gasoline and currently ac-count for nearly all new cars sold in Brazil.

Marcos Jank, president of Unica, said the Brazilian cane crop, which should turn out about 632m tonnes in 2011/12, would fall short of the 775.6m tonnes needed to meet demand for sugar and ethanol from that crop.

The deficit in cane only gets bigger going forward, according to Unica. In 2015/16, Brazil cane output is

seen at 778m tonnes with demand rising to 975.7m tonnes. And in 2020/21, output is seen at 974m tonnes of cane compared with demand of 1.37bn tonnes. “The growth in cane output has to pick up,” Mr Jank said on the sidelines of the seminar.

The ethanol industry says one inhibitor of fast-er expansion is a government policy of maintain-ing stable gasoline prices, independent of world oil prices, which effectively sets a ceiling for ethanol pump prices in order for it to compete.

Ethanol used in pure form in flex-fuel cars must be priced at no higher than 70% of the cost of gasoline otherwise it is no longer competi-tive. That is because cars travel further on gaso-line than an equivalent amount of ethanol.

Mr Jank said the government policy, which helps to keep inflation under control, was un-likely to change but the state could still take other steps to stimulate the ethanol sector.

“It’s not just that the government fixes the price of gasoline. There are a lot of distortionary taxes that need to be reformed,” he said.

Brazil needs to invest more in biofuels to meet demand

Crude nears biggest quarterly gain in two yearsCRUDE oil rose again this week, heading for its biggest quarterly gain in almost two years in London, as Middle East supply worries led con-cerns.

Brent crude rose over $1 on Thursday to $116.35 a barrel, while on the New York Mer-cantile Exchange it rose 71¢ to $104.98 a barrel.

Traders, analysts and investors see a new floor for prices around $100 a barrel, supported by supply risks and expanding economies after the most turbulent and volatile quarter for the oil market since the end of 2008.

In Syria, where more than 60 people have al-ready been killed in protests, president Bashar al-Assad defied calls to lift a decades-old emergency law as hundreds chanting “freedom” marched in the port city of Latakia on Wednesday.

“Friday prayers may be a key issue supporting the market now, and some of the focus is starting

to shift back to Japan and the cost of rebuilding the country,” said Thorbjoern Bak Jensen, ana-lyst at Global Risk Management.

Japan’s oil product sales rose 0.8% in Febru-ary from a year earlier as improvement in the economy helped boost gasoline demand for a fourth straight month, although the outlook for consumption in the aftermath of the earthquake was uncertain.

Lost nuclear power and reconstruction efforts could boost Japanese demand for oil. The Inter-national Energy Agency has said an additional 200,000 barrels per day will be needed to fill in after Japan’s nuclear disaster. But traders say the impact on world supply could be higher.

“The nuclear issue in Japan could have quite significant consequences. A lot of countries are now debating nuclear and new building is on hold,” a gasoil trader said.

WEEKLY ENERGYSNAPSHOT

CBOT ETHANOL2.297$ per gallon, Weds close

-9.7%T1 ETHANOL725.00€ per m3, Weds close

-2.7%PLATTS BIODIESEL

1150.00$ per mt, Weds close

7.0%NYMEX CRUDE99.55$ per barrel, Weds close

-4.3%ICE BRENT CRUDE 112.54$ per barrel, Weds close

-2.7%

EU to tackle duty evasion with new import tax on USTHE EU is planning to widen punitive import taxes on US biodiesel and extend them to Cana-da, citing evidence of illegal tariff evasion.

Certain biodiesel blends entering the EU from Canada and all US blends will face tariffs of up to more than €400 ($566.40) per tonne of biodiesel, according to initial European Com-mission (EC) plans, sources said.

The plan, which needs approval from EU governments, highlights the intensifying battle to clinch a slice of a renewable energy market that has been growing amid global efforts to fight climate change.

It follows a year of investigations and sei-zures of biodiesel shipments suspected as origi-nating from the US but labelled as coming from other countries’ ports.

The EU imposed tariffs on US diesel blends containing at least one in four parts of biodiesel in 2009, after it found US exporters benefited from illegal subsidies and sold their blends to Europe at below cost, hurting EU producers.

The EC now says it has evidence of illegal transhipments via Canada and that US exporters switched to weaker biodiesel blends, hurting EU producers, according to the sources.

If endorsed by EU governments, the commis-sion’s plan could result in extended duties launching in November 2011 and staying in place until 2014.

US exports to the EU plummeted in 2009 to less than 400,000 tonnes from 1.5m tonnes in 2008. At the same time, EU data shows Cana-dian sales to the EU soared to more than 140,000 tonnes in 2009, from about 1,700 tonnes in 2008 – a move Canada has attributed to growing EU demand and a supply gap left by the US.

Some exemptions plannedSingapore, which had also been investigated as a potential transhipment port for US biodiesel, will be exempt from duties under the plan.

Canadian exporters BIOX and Rothsay Bio-diesel, affiliated to Maple Leaf Foods, are to be exempted under the plan, the sources said. “The commission found the two companies were able to prove they were not involved in circumven-tion,” said one source.

Yet the inclusion of Canadian exports is like-ly to sour talks for a multi-billion dollar trade deal between the EU and Canada already trou-bled by EU environmental standards.

The plan – on which EU industry, US and Ca-nadian exporters and later EU governments must comment – is likely also to open debate on the EU’s strategy for sourcing fuel from renew-able sources and questions on what measures are allowed under EU law to battle circumven-tion. US and Canadian biodiesel industry groups could not be reached for comment.

“The world will need Brazilian exports of ethanol.”

Christoph Berg, MD, FO Licht

t t tt s


ANALYSIS | WEATHER & FREIGHT

Phil Franz-Warkentin

OCEAN freight rates have lifted off their two-year lows over the past month but are still rela-tively soft, which is beneficial for Canadian grain exports as the country is traditionally at a freight disadvantage to some of its competitors.

The Baltic Dry Index, which tracks global ship-ping rates, is currently sitting at around 1,500 points which compares with the low hit in mid-February of just over 1,000 points, but is still less than half the level seen at the same point a year ago and well below the highs set in 2008 of above 10,000 points.

David Przednowek, manager of marine logis-tics at the Canadian Wheat Board, said the rela-tively soft freight rates were generally favoura-ble for Canadian grain shippers.

Moving grain from Canada to many destina-tions, particularly Asia, takes longer than mov-ing from Australia. As a result, when freight rates are lower, Canada’s shipping disadvantage becomes less pronounced.

Mr Przednowek said that ocean freight rates were expected to “chop around in a holding pat-tern” in the near-term, with the longer-term out-look pointing to lower freight costs overall.

Meanwhile, freight markets are dealing with

both the disaster in Japan and unrest in the Mid-dle East and North Africa.

While a number of ports in northern Japan will probably remain closed for an indefinite period, Mr Przednowek noted that southern ports are still operating normally with no seri-ous disruptions to grain movement.

Looking farther ahead, Mr Przednowek said “a couple hundred million deadweight of additional capacity” is set to be added to the dry bulk market in the next two years, as ships that were ordered at the height of the market in 2008 are finished being built. Demand won’t be able to keep up with that extra capacity, keeping costs softer overall.

RAINS were somewhat less across the coffee belt in Brazil last week, allowing dryness to ease very slightly. However, rains are expected to increase this week across southern Minas Ge-rais, southern Espirito Santo, and Sao Paulo, which should increase wetness some.

In Vietnam, rains favoured flowering across the Central Highlands. Rains will continue in central and southern Vietnam this week. In Indonesia, dryness remains a minor concern in Sulawesi.

Widespread rains will continue in Colombia this week, favouring flowering and early cherry growth in most areas.

WIDESPREAD rains occurred across the West African cocoa belt last week, with the heaviest amounts in eastern Ivory Coast and Cameroon. The rains increased wetness concerns across western Ivory Coast, but relatively drier weath-er eased some of the wetness in eastern Ivory Coast and western Ghana.

Rains will be fairly light and will favour Ivo-ry Coast, Ghana, southern Nigeria, and southern Cameroon this week. Conditions are generally favorable for cocoa in most areas.

In Southeast Asia, rains favoured cocoa de-velopment in most areas last week, but some dryness is lingering in north central Sulawesi.

RAINFALL will continue to ease some of the dryness in south Florida cane areas, but south Texas cane areas will remain far too dry. Dry weather is expected to continue in India, Mexi-co, and Cuba this week, favouring fieldwork.

Somewhat drier weather prevailed in Brazil last week, but wetness remains a concern across northern portions of the belt. With rains expect-ed to increase, wetness will remain a concern.

Light showers eased some of the dryness across western portions of the south China cane belt. Dryness will remain a concern in the south-eastern belt.

Rain raises wetness fears in Africa

Dryness easing in Brazil crop areas

Mixed bag for US sugar cane crops

SHOWERS were very limited across China’s grain and oilseed crop regions last week, which allowed moisture shortages to increase again across the Yangtze Valley, US meteorologist MDA Federal said on Wednesday.

However, rains are expected to return to much of the Yangtze Valley by the end of this week and continue into next week which should help re-plenish moisture a bit. This will be very benefi-cial for flowering rapeseed as well as wheat and maize early growth. Moisture from earlier show-ers in the North China Plain combined with sup-plemental irrigation is preventing significant stress on wheat. However, the ongoing dry pat-tern there for the next 10 days from Wednesday will allow soil moisture and irrigation supplies to

continue to decline. This will begin to stress wheat, and will stress germination of any maize that has been planted as well.

Dry weather also prevailed across eastern China over the last weekend (March 26 and 27), MDA said on Monday. While short-term mois-ture supplies were adequate across the North China Plain, dryness remained across central and eastern Yangtze Valley, stressing rapeseed growth and germination of maize.

Long-term moisture supplies remain short across North China Plain and nearly all of Yang-tze Valley, so winter wheat growth is likely to face some stress if rains do not increase.

Looking ahead to this week, the few light showers that are expected in western Yangtze

Valley will not be heavy enough to significantly improve soil moisture reserves.

COCOA CROP ESTIMATES(m tonnes) 2010/11 2011/12West Africa 2.445 2.420Indonesia 0.500 0.500Brazil 0.153 0.153World 3.556 3.531Source: MDA Federal

COFFEE CROP ESTIMATES(m tonnes) 2010/11 2011/12Brazil 51.00 40.00Vietnam 17.00 18.00Colombia 9.50 10.50Indonesia 9.00 9.20Central America 12.06 12.20World 134.05 124.07Source: MDA Federal

SUGAR CROP ESTIMATES(m tonnes) 2010/11 2011/12US 7.03 7.39Brazil 35.50 33.00Australia – 4.20China 12.50 12.55World 157.35 157.82Source: MDA Federal

Expected showers won’t be enough for dry China crops

FREIGHT Lloyd’s List is the world’s foremost shipping newspaper.Contact Chris Rowe +44 (0)20 7017 4187 or [email protected]

Canada’s disadvantaged exporters gain from weak freight

A map showing precipitation as a percentage of normal in China between February 13 and March 29

Source: MDA Federal

Now in its 72nd edition, FO Licht’s World Sugar Yearbook is the essential reference manual for the global sugar and sweetener industries. Call +44 (0)20 7017 7583 or see www.public-ledger.com for more details

NEW SUGAR YEARBOOK


ANALYSIS | FEATURE

The EU might be a bit part player in the Asia-dominated rice market but Ian Hart finds out that it will have to tackle more than its fair share of challenges if the sector is going to thrive

€175 a tonne and brown €30 a tonne, whereas in early 2004 these were around €400 a tonne and €250 a tonne, respectively.

However, access is even greater when consid-ering quotas and other import tax exemptions, which mean that about 70% of imports enter Europe with no levy, 10% attract some and 20% pay the general tariff.

In 2010, Thailand supplied 31% of foreign deliveries, Pakistan made up 19%, India was

at 17%, the US repre-sented 10% and Cambo-dia was at 7%.

This is making new imports possible. “I would have previously

said that imports of packed milled rice don’t make sense but in the last three years they have doubled to 56,816 tonnes,” said Mr Brun.

He noted that those non-EU suppliers that would get ahead in coming years would be those able to access a homogenous and well controlled supply of paddy year-round; were certified with ISO, HACCP; could show tracea-bility documents the same day of a buyer’s re-quest and direct millers or exporters from ori-gins (which is already the case in India, Pakistan, Thailand and Cambodia).

Overall, the speaker noted a switch from ja-ponica to indica varieties, with consumers re-sponding to a large gap in prices. This might be even more pronounced in 2010 with EU produc-tion of indica falling 10% and – if a pattern of boom-and-bust continues – prices of that variety climb.

Another concern for whoever supplies the market is that EU consumption is struggling to move upwards from around 2.5m tonnes a year: in fact, over the past four years it has eased by 7 to 8%. “If we look at 2006 to 2010 consumption the countries that have not increased, or have even decreased their consumption, are the larger consumers in Mediterranean countries such as Spain, Greece and Italy,” said Mr Brun. “It has grown strongly where there is not traditional consumption as there have been more offerings such as basmati, fragrant and speciality rice as an alternative to potatoes.”

Another speaker, Rolf Eick, managing direc-tor of Germany’s Rickmers Reismuhle, fo-cused on the EU’s restrictions surrounding pesticide residues in rice, which recently be-came more stringent. He said pesticides are needed but with a survey showing that 72% of EU consumers saying they are concerned about residues in fruit, vegetable and cereals, EU regulations should be obeyed. He noted that with one study in Bangladesh, 47% of farmers were overusing pesticides and only 4% had formal training in how to use them. While

there is a need for better education at origin, Mr Eick said the onus is on importers to do the testing and ensure compliance with the regula-tions. If a pesticide is not among the 430 listed by the EU, it is forbidden.

However, many – including EU producers – have complained that the maximum residue lev-els set for key pesticides are unrealistically low and not based on science. This means some au-thorities within member states take a more prag-matic view.

One UK delegate noted how this reflects dif-fering mentalities within the member states, with Germans, for example, typically saying these regulations are set in stone and must be adhered too and others, such as the UK, more willing to push back when regulations do not reflect the reality on the ground.

Asked whether there was any other way than just complying, Mr Eick said: “Everyone should tell the supplier to check and then check at entrance whether this is a GM or pesticide issue. People need to be sensible. There is al-ways someone trying to be cheaper and closing their mind to the consequences. Take, for ex-ample, basmati where 25% can be found to be mixed. The penalties for those working like that must be much higher than before.” He de-scribed the EU’s levels for pesticides as “rela-tively OK”.

While issues surrounding the presence of isoprothiolane – the main pesticide that caused a slump in Indian basmati exports to the EU – appear to be close to being resolved, there re-main others that can cause problems as pesti-cide companies do not have an incentive to register out-of-patent pesticides or those that are little used in the EU. Not only can it cost millions of euros to do this, but because a pes-ticide is registered against all crops to calculate consumers’ total exposure, submitting it for rice (a relatively small crop versus wheat etc) may end up diluting the allowable level for more major crops.

The EU might be small in both consumption and production of rice but there is plenty to keep the trade occupied. l

THERE are a large number of challenges thatwill need to be overcome if the EU is going to continue being a meaningful

rice producer, including farmers’ returns versus other crops, slow consumption growth in traditional markets, increasingly competitive deliveries from abroad and the impact of Common Agricultural Policy reform in 2012.

Jean Pierre Brun, managing director of Mari-us Brun et Fils of France, told the Rice Trade Outlook 2011 conference in Madrid, Spain that EU rice planting has risen to 470,000 hectares in 2010/11, up from 417,470 hectares in 2006/07.

A combination of great yields (6.89 tonnes per hectare) and a decent planted area in 2009/10 led to a record crop of 3.17m tonnes, but this is set to slip to 3.06m tonnes in 2010/11 as yields return to a historical average of 6.5 tonnes per hectare.

However, Mr Brun said there would be chal-lenges to continue high production and selling.

One element is a narrowing of the gap be-tween farmers’ returns for hard red wheat and rice. Whereas returns for rice in France during 2009/10 were €71 ($101) a tonne and minus €17 a tonne for wheat, the former in 2010/11 is €94 a tonne and the latter €68 a tonne, accord-ing to Mr Brun’s calculations. “Producing wheat is much easier – it takes less time and so on – so farmers will move to that,” he said.

Moreover, this decision could be made more complex depending on to what degree the €125 a tonne subsidy is cut under proposed changes to the CAP in 2012/13. “If they decide to decrease it by more than half it could be there is no more rice production in France,” said Mr Brun.

On the export front, which is possible as the bloc has a surplus of japonica, the EU has seen strong sales to the Middle East, includ-ing the likes of Turkey, Syria, Lebanon, fol-lowing Egypt’s ban on exports. “Suddenly Europe became an alternative helped by the euro to dollar exchange rate,” said Mr Brun. “There is still buying today even if it’s not as attractive.” In 2009/10 Italy accounted for 72% of exports, followed by Spain (15%) and France (5%).

Even so, imports will remain a crucial factor in meeting EU demand. This is partly due to a lack of indica production versus consumption as well as better access for foreign suppliers in recent years. Under the so-called general tariff, which sets an import duty that changes with the level of deliveries, milled rice attracts a duty of

EU players in a paddy over new challenges

EU PADDY OUTPUT (000 tonnes)

Source: Brun Rice

“Producing wheat is much easier – it takes less time – so

farmers will move to that”

Jean Pierre Brun, MD, Marius Brun




ANALYSIS | INTERVIEW

NEXT WEEK

Brazil is on track to produce a record amount of soyabeans in 2011 despite yields being lower than a year earlier. But is there really scope to supply 60m tonnes more by 2025 as the world needs?

FEATURE

www.public-ledger.com

ROBBIE Williams (pictured), chair-man of Illovo Sugar, has resigned and will be replaced by current deputy chairman Don MacLeod. Mr William

was set to retire at the company’s next annual general meeting in July. Karin Zarnack (pictured), financial director at Illovo since 2005, has also tendered her resignation from the board of Illovo with effect from the end of May.

JOHN Mapplebeck (pictured), a non-executive director at Ukrainian farm company Landkom International af-ter an extensive career with NatWest, has been named as finance director, replacing Ste-phen Pickup who stepped down at the end of March but will work in an advisory role after a break.

GOSSE Boon has been named to Nutreco’s ex-ecutive board for the next four years. Mr Boon is due to succeed Cees van Rijn as chief financial officer in September 2011. Rob Zwartendijk has stepped down as chairman of Nutreco’s supervi-sory board having been on it for 12 years. Jan Maarten de Jong has been reappointed as mem-ber of the supervisory board for a third period of four years. He will succeed Mr Zwartendijk as chair-man of the supervisory board. Herna Verhagen will be chairman of the remuneration committee.

JOHN Warda, former AusBulk, ABB Grain and Vi-terra senior manager, has taken up a position with Emerald Group as its operations and supply chain general manager.

ARCHER Daniels Midland has made appoint-ments in its maize business unit. Dennis Riddle, who announced his intention to retire within the year, was named senior advisor of maize, to ensure an effective transition. Chris Cuddy was named vice president and general manager of sweeteners and starches.

CHARLES Crohare, Roberta Klugman and Gino Favarossa have all been re-elected to the Califor-nia Olive Oil Council. The newly elected challengers were Michael Tuohy and Deborah Rogers, with a tie for the sixth seat between Laurie Schuler-Flynn and James Nickel.

INDIA’S Simbhaoli Sugars has appointed Gur-simran Kaur Mann as an additional director on its board.

PEOPLE AND PLACES

ON the Friday afternoon that The Public Ledger spoke with Gerwald Kras of the Rotterdam office of pepper

processor Olam International, something odd had happened that epitomised the shifting power in many agricultural commodities.

“It’s very strange. Vietnam is not even a seller today,” he said. “Indian prices moved up by 3% on the exchange and all of us are confused. We were waiting for the Vietnam-ese crop to bring prices down.”

There could be fundamental reasons for the price remaining high. Chinese buyers have stepped in and bought at higher pric-es; rainfall in Vietnam has caused problems with drying the pepper; Brazil and Indone-sia are sold out while India’s production covers its local consumption; and buyers have limited coverage so spot markets are tight. Overall, supply and demand are not looking great in the pepper market. Al-though Vietnam is having a huge crop, the world market is balanced, according to Mr Kras.

However, there is also a realisation that im-porters are reliant on Vietnam and players there have become vastly more powerful over recent years.

“If they decide not to sell, they can do that,” Mr Kras continued. “I find it amazing when they have a 100,000 tonnes plus production that they can do that.”

But they have and it is not only troubling European and other buyers, but shippers in Vi-etnam itself. “Some shippers there have sold short and they’ve got it wrong. We’re already getting the first reports of defaults,” he said.

Stocks in farmers’ handsStocks are being held by farmers, which unlike speculators and other middlemen do not need financing.

“Vietnamese farmers are in the driving seat,” Mr Kras explained. “They got the land for free, didn’t make investments and so don’t have debts or anything – the industry is in a more critical state than they are. The farmers will de-cide the price and not some self-fulfilling prophecy that prices will come down during the crop.”

Mr Kras suggested that pepper may have become a victim of success in other areas. “In India, they’ve made a fortune on rubber, car-damom, coffee but they can’t hold onto these commodities. So they’ve bought something

that they can: in the south they bought pep-per.”

As a result, buyers are in a bind. “Farmers and others don’t want to sell the pepper. We’re waiting for the farmers or whoever to sell the produce but nobody can push them to sell. They determine the selling price and if they don’t like it they’ll wait for a day. It’s hap-pened in coffee and cocoa, historical prices have been paid for some items and pepper is not even at its highest ever level,” explained Mr Kras. “We’re the largest exporter from Vi-etnam with a 25% market share and we can’t buy pepper or we have to pay higher prices every day. So in the end we have no choice than to remain sidelined. We’re ransomed here.”

Prices unlikely to fallBut won’t prices eventually come off as some European traders suggest?

“They’ve been saying this for each of the last few years. We’re repeating steps of the past. It’s a battle between farmers and buyers. I see no reason for prices to drop. There is al-ways the feeling that in March and April sup-ply and demand will be aligned or even slight-ly excess supply but there wasn’t the expectation that the market would runaway. It’s happened the same as last year but last year prices started a lot lower.”

Perhaps European and other buyers are part-ly to blame. “No one invested in the pipeline and now it is emptied. If we all said we’re not buying for two weeks – go away Vietnamese speculators and farmers we’re not buying – the market might well come down but we’re not in a position to do that. Every time someone has to step in and breaks the chain. Everyone needs pepper tomorrow or the production fa-cility closes down.”

Mr Kras also noted that while problems in the Middle East and disasters in Japan had taken prices of many commodities down, this had not been the case for the global pepper market.

“We’re now dependent on people far away who are subscribed to the Indian ex-changes by SMS each hour following Indian prices. If prices increase they don’t want to sell. Prices are so transparent it is like an in-direct instrument telling them collectively to hold off. These are not like the commod-ity markets of five years ago. The origins have got much, much more power,” Mr Kras concluded. l

Gerwald Kras of Olam International notes that power in the pepper market is more and more in the hands of the sellers, a trend that is equally apparent in other sectors. By Ian Hart

“We have no choice than to remain sidelined. We’re ransomed here.”

April 1, 2011 No.72,723 Rice industry asks what will bring...

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