Grain market outlook, end October 2010

The International Grains Council has released its October 2010 grain market report. The IGC has said that the outlook for world grains supplies in 2010-11 tightened further in the past month. Although prospects for wheat and barley crops are broadly unchanged from previously, the forecast of world maize production is cut, due to reduced crop expectations in the US and China.

Wheat: With northern hemisphere harvesting nearly complete, the IGC projection of world wheat output is kept at 644 mt, a fall of 33 mt from the previous year, with reduced estimates for some countries notably the US and Australia, offset by increases for others, including China.

Maize: Reflecting worsening production prospects in the US and China, the forecast of global maize production is cut by 10 mt to 814 mt (811 mt), still a record.

Rice: At 449 mt tons, the IGC forecast of global rice production in 2010-11 is almost 5 mt lower than in September, largely reflecting a smaller-than anticipated official projection of India’s main crop.

At 1,730 million tons, global grain output is projected 11 mt lower than in September and 3% below the previous year. By far the biggest decline is in the CIS – mostly in Russia – due to the drought. Within the total, much of the fall reflects smaller wheat and barley outturns, only marginally offset by a larger maize crop. In the southern hemisphere, prospects for wheat remain favourable, except for parts of Australia, while the maize outlook improved in Argentina.

World grains consumption is projected slightly higher, at 1,785 mt, mainly because of increased feed forecasts for the EU and US. In the US, where the total includes a residual element, it is largely an adjustment for the use of early-harvested maize before the new marketing year began. However, global use of grain will be 1.5% higher than in 2009-10, underpinned by increases in all demand sectors. With global grains use set to exceed output for the first time in four years, world end-of-season stocks are expected to fall by 54 mt, to 345 mt. Nevertheless, they would still be nearly one-quarter above the 2006-07 low.

Although wheat and coarse grains prices have posted large gains since July, world grains trade in 2010-11 is projected to be marginally above the previous year’s total, at 240 mt, reflecting this month’s upward revisions for maize and wheat. World wheat trade is expected to decline, but this will be more than offset by a rise in maize import demand. A shortfall of nearly 30 mt in CIS exports is expected to be balanced by larger shipments by other exporters, notably the US, Argentina, Australia and India.

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The state of the world’s crop biodiversity

This is a big one from the FAO. The Second Report on the State of the World’s Plant Genetic Resources for Food and Agriculture is a mega tome. At just under 400 pages, this very dense report is packed into eight chapters which occupy half the pages. The other half is made up of annexures and appendices. Even then, it’s just part of the entire SOWPGR2 package, for there is a synthesis report, the Global Plan of Action for the Conservation and Sustainable Utilization of Plant Genetic Resources, there is a thematic background studies section with seven studies, there are the country reports (over 100!) and there is a picture gallery. It’s an entire curriculum.

It’s been a while coming – the first report was published by FAO 14 years ago and much has changed since then. For one thing, climate change was quite uncommon in common discourse. This is hugely important because the genetic diversity of the grains, legumes, vegetables and fruits that we grow and eat – referred to as plant genetic resources for food and agriculture, or PGRFA – are the foundation of food production, and the biological basis for food security, livelihoods and economic development.

The synthesis report says that PGRFA are crucial for helping farmers adapt to current and future challenges, including the effects of climate change. FAO’s Second Report on the State of the World’s Plant Genetic Resources for Food and Agriculture provides a comprehensive overview of recent trends in PGRFA conservation and use around the world.

It is based on information gathered from more than 100 countries, as well as from regional and international research and support organizations and academic programmes. The report documents the current status of plant genetic resources diversity, conservation and use, as well as the extent and role of national, regional and international efforts that underpin the contributions of PGRFA to food security. It highlights the most significant changes that have occurred in the sector since 1996, as well as the gaps and needs that remain for setting future priorities.

The core messages:
• PGRFA are essential raw materials for helping farmers respond to climate change. Plant breeding capacity needs to be strengthened and breeding programmes must be expanded to develop varieties with traits needed to meet this challenge.
• Loss of PGRFA has reduced options for the agricultural sector. The major causes of genetic erosion are land clearing, population pressures, overgrazing, environmental degradation and changing agricultural practices.
• Local PGRFA diversity found in farmers’ fields or in situ is still largely inadequately documented and managed. There is now a growing awareness of the importance of this diversity and its contribution to local food security.
• There has been progress in securing PGRFA diversity in a larger number of national genebanks. However, much of the diversity, particularly of crop wild relatives (CWR) and underused species relevant for food and agriculture, still needs to be secured for present and future use.
• Rapid scientific advances, especially in information technology and molecular biology, have introduced new techniques for PGRFA conservation and use. Their wider application offers new opportunities to increase efficiency of the conservation–production chain.
• Significant policy developments have changed the landscape of PGRFA management. Many more countries have adopted national programmes, laws and regulations for biodiversity following the adoption of the Convention on Biological Diversity (CBD) and the International Treaty on Plant Genetic Resources for Food and Agriculture (ITPGRFA).
• Better communication, collaboration and partnerships are needed among institutions dealing with PGRFA management – from conservation to plant breeding and seed systems. These are the key factors for an integrated conservation and utilization strategy and delivering sustainable solutions to build a world without hunger.

World on the Edge, writes Lester Brown, Earth Policy

In his introduction to the upcoming title, Lester Brown of the Earth Policy Institute says that we are facing issues of near-overwhelming complexity and unprecedented urgency. “Our challenge is to think globally and develop policies to counteract environmental decline and economic collapse. The question is: Can we change direction before we go over the edge?”

The edge is what Pakistan and Russia did go over in 2010. In the summer of 2010 record-high temperatures hit Moscow and torrential rains caused immense devastation in Pakistan.

NASA Earth Observatory, Russia fires

At first it was just another heat wave, says the first chapter of the book, but the scorching heat that started in late June continued through mid-August. Western Russia was so hot and dry in early August that 300 or 400 new fires were starting every day. Millions of acres of forest burned. So did thousands of homes. Crops withered. Day after day, Moscow was bathed in seemingly endless smoke. The elderly and those with impaired respiratory systems struggled to breathe. The death rate climbed as heat stress and smoke took their toll.

The average July temperature in Moscow was a scarcely believable 14 degrees Fahrenheit above the norm. Twice during the heat wave, the Moscow temperature exceeded 100 degrees Fahrenheit, a level Muscovites had never before experienced. Watching the heat wave play out over a seven-week period on the TV evening news, with the thousands of fires and the smoke everywhere, was like watching a horror film that had no end. Russia’s 140 million people were in shock, traumatized by what was happening to them and their country.

Mohammad Rezwan, 24, swims one hour every other day to get food from at a World Food Programme distribution in Kashmore, Pakistan. Photo: IRIN News

Even before the Russian heat wave ended, there were reports in late July of torrential rains in the mountains of northern Pakistan. The Indus River, the lifeline of Pakistan, and its tributaries were overflowing. Levees that had confined the river to a narrow channel so the fertile floodplains could be farmed had failed. Eventually the raging waters covered one fifth of the country. The destruction was everywhere. Some 2 million homes were damaged or destroyed. More than 20 million people were affected by the flooding. Nearly 2,000 Pakistanis died. Some 6 million acres of crops were damaged or destroyed. Over a million livestock drowned. Roads and bridges were washed away.

Although the flooding was blamed on the heavy rainfall, there were actually several trends converging to produce what was described as the largest natural disaster in Pakistan’s history. On May 26, 2010, the official temperature in Mohenjodaro in south-central Pakistan reached 128 degrees Fahrenheit, a record for Asia. Snow and glaciers in the western Himalayas, where the tributaries of the Indus River originate, were melting fast. As Pakistani glaciologist M. Iqbal Khan noted, the glacial melt was already swelling the flow of the Indus even before the rains came.

US$6.6 trillion damage to environment in 2008

Global environmental damage caused by human activity in 2008 represented a monetary value of $ 6.6 trillion, equivalent to 11% of global GDP, calculates a study released by the UN-backed Principles for Responsible Investment (PRI) and the UN Environment Programme Finance Initiative (UNEP FI). Those global costs are 20% larger than the $ 5.4 trillion decline in the value of pension funds in developed countries caused by the global financial crisis in 2007-8.

The study, an initial effort to quantify in monetary terms the environmental harm caused by business and the possible future consequences for investor portfolios, fund returns and company earnings, estimates that in 2008 the world’s top 3,000 public companies were responsible for a third of all global environmental damage.

The study warns that as environmental damage and resource depletion increases, and governments start applying a “polluter pays” principle, the value of large portfolios will be affected through higher insurance premiums on companies, taxes, inflated input prices and the price tags for clean-ups. Read the report at this link.

“GHG emissions and resulting climate change impacts account for a large and growing share of environmental costs – rising from 69% to 73% of externalities between 2008 and 2050,” says the report. Trucost applied a carbon price of US$ 85 to each tonne of GHGs emitted in 2008 to calculate global annual external costs as US$ 4.5 trillion. This represents the present day value of future climate change impacts and is based on the social cost of carbon from the Stern Review on the Economics of Climate Change (2006).”

“The future rise in costs for escalating GHG emissions to reflect mounting climate change impacts results in projected external costs of US$ 21 trillion in 2050. Emissions are the main driver of the trajectory of rising externalities year-on-year. Water abstraction and air pollution were the other main contributors to environmental costs, followed by emissions of volatile organic compounds, waste generation, fish and timber use and mercury emissions.”

GHG emissions and resulting climate change impacts account
for a large and growing share of environmental costs – rising
from 69% to 73% of externalities between 2008 and 2050.
Trucost applied a carbon price of US$ 85 to each tonne of
GHGs emitted in 2008 to calculate global annual external
costs as US$ 4.5 trillion. This represents the present day value
of future climate change impacts and is based on the social
cost of carbon from the Stern Review on the Economics of
Climate Change (2006).4 The future rise in costs for escalating
GHG emissions to reflect mounting climate change impacts
results in projected external costs of US$ 21 trillion in 2050.
Emissions are the main driver of the trajectory of rising
externalities year-on-year. Water abstraction and air pollution
were the other main contributors to environmental costs,
followed by emissions of volatile organic compounds, waste
generation, fish and timber use and mercury emissions.

Oil’s up, oil’s down, it’s France, it’s China

It’s up. Crude oil rose on speculation that growing French demand for imported fuel because of a strike will reduce stockpiles elsewhere, reported Bloomberg. France is importing “massive” amounts of fuel and tapping reserves to alleviate service-station shortages, Environment and Energy Minister Jean-Louis Borloo said today. The French government last week authorized the use of fuel reserves after Total SA announced it would halt its five active refineries in France and other refiners took measures to reduce output. Workers at the country’s 12 crude-processing plants have extended their labor action since Oct. 12 to protest a plan to raise the minimum retirement age.

It’s up. Crude oil is poised to reach $90 a barrel by the middle of December, according to technical analysis by Lind-Waldock in Chicago. The December contract, which became the front-month contract yesterday, has been trading in an uptrend, a pattern of higher peaks and higher valleys, since touching a low of $75.10 on Sept. 23, Blake Robben, a strategist at Lind-Waldock, a division of MF Global Ltd., said in an interview.

It’s down. Crude oil may decline next week after China’s oil processing grew the least in 18 months as government measures to cool the economy reduced fuel demand, a Bloomberg News survey showed. Fourteen of 30 analysts, or 47 percent, forecast crude oil will fall through Oct. 29. Eleven respondents, or 37 percent, predicted prices will be little changed and five estimated an increase. Last week analysts were split over whether futures would drop or climb. Data from the China Mainland Marketing Research Co. yesterday showed that refineries in the world’s biggest energy- consuming country processed about 8.5 million barrels a day in September. That’s a 6.6 percent gain from a year earlier, the smallest increase since March 2009.

It’s down. Saudi Arabia has rejected claims that the era of cheaply produced oil is over, saying the world’s largest field in the kingdom’s eastern province still holds more than many countries. Many of the largest oilfields in Texas and the North Sea have passed their prime, forcing companies to target more costly prospects such as bitumen deposits in Venezuela, Canadian tar sands and ethanol. But Ali al Naimi, the Saudi Arabian oil minister, pointed to the Ghawar field’s 88 billion barrels of remaining reserves and the kingdom’s large cushion of spare pumping capacity as signs that oil was still abundant. “”I am sorry to disappoint people but the era of easy oil is not over,”” al Naimi said at a conference held in the Saudi capital to celebrate the 50th birthday of OPEC. “”How can you say the era of easy oil is over when we still have 88 billion barrels in the Ghawar field? That is more than many countries in the world. You can dismiss the notion that easy oil in Saudi Arabia is gone.”” The Ghawar field, measuring 280km by 30km, is by far the largest conventional oilfield in the world. Although details of the field’s performance are not made public, it is believed to have produced more than 65 billion barrels already since production began in 1951.

It’s up. Any oil price fall should be seen as an opportunity to buy the contract as the next move in the market is likely to be a rally, JPMorgan Chase & Co. said.“The signal that the next leg higher is imminent will be tighter Dubai forward spreads and a narrower Brent-Dubai spread,” Lawrence Eagles, head of commodity strategy in New York, said in a monthly oil market report. JPMorgan said it expects the dollar to weaken by four to five percent over the next six months, giving oil a boost. A declining dollar increases the appeal of energy as an inflation hedge. The strength in crude is also bolstered by rising demand in several regions, the bank said. A narrowing spread, when Dubai oil rises closer to North Sea Brent, typically shows increasing Asian demand. The Brent-Dubai exchange for swaps, or EFS, for December narrowed 12 cents to $2.40 a barrel today, according to data from PVM Oil Associates. The EFS is the price difference between Brent futures and Dubai swaps contracts and signifies Brent’s premium relative to the Middle East grade. The December-January Dubai spread shrank to minus 36 cents from minus 80 cents on Sept. 27, according to data compiled by Bloomberg. “The key risk is that we are being too cautious and that the threat of $100 a barrel oil that is implicit in our fourth- quarter 2011 oil forecast arrives much sooner than we expect, driven by not only a weak dollar, but also by rampant Chinese and emerging market demand, the rebuilding of French strategic stocks, and an upward bias to food prices,” Eagles said in the report.

Neandertals and us

Scientific American has done a nice comic feature on the Neanderthal genome (thanks to the excellent, prolix and never prosaic Savage Minds for this).

Wikileaks files: torture, death squads and occupation

The site itself is swamped. The media organisations that have done the barest preliminary sifting of information from the mass of files – Al Jazeera, New York Times, The Guardian, Der Spiegel, and the UK’s Channel 4 TV – are equally swamped. Other news outlets are focusing on particular aspects of the leaks, such as Iran (a reflection of recent US political focus), or the Pentagon’s reaction.

What has been uncovered often contradicts the official narrative of the conflict, reports Al Jazeera. “For example, the leaked data shows that the US has been keeping records of Iraqi deaths and injuries throughout the war, despite public statements to the contrary. The latest cache of files pertains to a period of six years – from January 1, 2004, to December 31, 2009 – and shows that 109,000 people died during this time. Of those, a staggering 66,081 – two-thirds of the total – were civilians.”

The figures are much higher than previously estimated and they will inevitably lead to an upward revision of the overall death toll of the conflict. As a result of the information contained in the war logs, the Iraq Body Count (IBC) – an organisation that kept records of the number of people killed – is about to raise its death toll estimates by 15,000: to 122,000 from 107,000.

The new material throws light on the day-to-day horrors of the war. The military calls them SIGACTs – significant action reports – ground-level summaries of the events that punctuated the conflict: raids, searches, roadside bombings, arrests, and more. All of them are classified “secret”. The reports reveal how torture was rampant and how ordinary civilians bore the brunt of the conflict.

The files record horrifying tales: of pregnant women being shot dead at checkpoints, of priests kidnapped and murdered, of Iraqi prison guards using electric drills to force their prisoners to confess. Equally disturbing is the response of the military to the civilian deaths caused by its troops. Excessive use of force was routinely not investigated and the guilty were rarely brought to book.

Britain’s The Independent has said the leaks are important because they prove much of what was previously only suspected but never admitted by the US army or explained in detail. An analysis by the paper says, “It was obvious from 2004 that US forces almost always ignored cases of torture by Iraqi government forces, but this is now shown to have been official policy.”

It was no secret that torture of prisoners had become the norm in Iraqi government prisons as it established its own security services from 2004. Men who were clearly the victims of torture were often put on television where they would confess to murder, torture and rape. But after a time it was noticed that many of those whom they claimed to have killed were still alive.

The Sunni community at this time were terrified of mass sweeps by the US forces, sometimes accompanied by Iraqi government units, in which all young men of military age were arrested. Tribal elders would often rush to the American to demand that the prisoners not be handed over to the Iraqi army or police who were likely to torture or murder them. The power drill was a favourite measure of torture. It is clear that the US military knew all about this.

From the end of 2007 the war began to change as the Americans began to appear as the defenders of the Sunni community. The US military offensives against al-Qa’ida and the Mehdi Army Shiah militia were accompanied by a rash of assassinations. Again it would be interesting to know more detail about how far the US military was involved in these killings, particularly against the followers of the nationalist cleric Muqtada al-Sadr.

Eat it? Then grow it, IRRI tells young Singaporeans

Via the very active, carefully eclectic and tastefully humorous Agricultural Biodiversity Weblog comes this curiosity on IRRI, the International Rice Research Institute, which says that Singapore students will soon have the chance to learn one of the most fundamental and important aspects of living in Asia – how to grow rice.

This activity is being organized by the Science Centre Singapore (SCS) and the International Rice Research Institute (IRRI). The aim is to teach young Singaporeans about rice and how it is grown, especially the environmental cost of producing a bowl of rice.

“Rice is the single most important, best known, and most loved food staple in Singapore and across Asia,” says Duncan Macintosh, executive director of the IRRI Fund Singapore. “Even though we eat it every day, most Singapore students know little about rice and the challenge of growing it. We hope to change that by letting them grow their own rice. In the process, we also want them to learn – and get excited about – the biological sciences.”

The IRRI Fund Singapore is working with SCS to prepare and distribute 10,000 small packets of rice seed to students, with more being provided in subsequent years. They will then be taught how to sow, germinate, and take care of the rice in pots, while avoiding the use of standing water, either at school or at home. Each 5-gram packet will contain about 150 seeds, with an average germination rate of about 80 percent, easily guaranteeing at least one plant per packet, and likely many more.

Rebuilding, replanting in Pakistan

Women in a camp for flood victims in the Balochistan province of southwestern Pakistan cook bread using the fortified wheat flour rations they have been provided by WFP. Picture: World Food Programme/Copyright: Amjad Jamal

A news bulletin from the World Food Programme (WFP) describes in first person the steady rebuilding of lives taking place in Pakistan. More than two months after the devastating August floods, Amjad Jamal, a WFP spokesman in Pakistan, describes how millions of people are at work reclaiming their lives with the help of a massive food assistance effort.

If we were to drive across Pakistan today, from the Swat Valley in the north to Sindh or Balochistan in the south, what would we see? In the Swat Valley where the floodwaters have all dried up or receded, you would see people rebuilding their homes and replanting the many fruit orchards for which it’s famous. In Punjab, the “bread basket” of Pakistan, you’d see whole villages under construction, with a frenzy of activity in the fields as people rush to get their wheat crop planted in time. In Sindh and the sparsely populated Balochistan, there’s still a lot of standing water, with people unable to return to their homes and living in flood camps.

What signs are there that conditions for the flood victims are beginning to improve? Recovery efforts are well underway in the northern parts of the country where people are working hard to get back on their feet. We’re expecting a poor harvest this season, but have high hopes for the one afterwards next summer as the flood waters have left behind a lot of fertile soil.

A family in a flood camp in the Balochistan province of southwestern Pakistan. Picture: World Food Programme/Copyright: Amjad Jamal

What is the biggest remaining challenge to helping people impacted by the floods get back on their feet? Our single biggest challenge is still the sheer number of people affected. Getting help to six million people per month in a country as vast as Pakistan isn’t just costly, it’s complicated. Whereas in Swat Valley it means helping people in isolated mountain valleys store up food for the winter, in the plains of Punjab it means helping them rebuild their irrigation canals and in the southern region of Sindh, reclaiming entire farms from the floodwaters.

In what part of the country is that challenge greatest? The situation in Sindh is particularly worrisome as much of the province is still under water and the farmers there have by and large missed the September planting season. In Balochistan too, the huge distances and widely scattered population are making it difficult to get to everyone. The logistical challenges there are compounded by the near constant threat of insecurity along the border with Afghanistan.

Of all the things you’ve seen or heard over the past few weeks, what has made the biggest impression on you? I was recently in Balochistan where it’s extremely difficult to work because you need a security detail to do practically anything, and met a man of about my age at camp for flood victims who was there with his children. When I asked about his wife, he told me that she had died of a heart attack at the sight of their house crumbling under the floodwaters. He’d promised his children that as soon as the waters receded, they’d go back and rebuild it just like it was before the floods.

Heard the one about the nuclear submarine on the rocks?

John Bull: Heard the latest Monty? One of our flippin’ nuclear sub’s on the rocks!

Maninder ‘Monty’ Singh: So’s Wayne Rooney, accordin’ to The Sun.

Thar she blows. The unfortunate HMS Astute. Pic: BBC

John: Just listen to this. I mean can you believe this! “The world’s most advanced nuclear submarine, HMS Astute, has run aground on rocks off Scotland causing considerable embarrassment for Navy chiefs.” I’ll bet it’s bloody embarassing for them blokes. So’s my pension. It says, “It is understood that the boat ran aground by its stern in a manoeuvre that ‘went slightly wrong’ after it had dropped some sailors ashore off the Isle of Skye.”

Monty: All they ever say is ‘went slightly wrong’. Sorry mate, we botched it up, here’s the bill.

John: Yes but I mean Monty old man this wretched boat runs off a flippin’ nuclear reactor you know! And they’ve gone and crashed the thing! “Navy insiders insisted that there was no likelihood of a nuclear reactor leak or any other environmental issue. No one was injured in the incident that happened earlier today. It came the morning after Trafalgar Day, where sailors celebrated the 205th anniversary of Nelson’s victory”. Hahaha! Ol’ Nelson must be spinning in his grave he must be.

Monty: Thought they dropped him full fathom five when he passed on?

John: Yer misinformed. But listen to this: “HMS Astute ran aground by her stern earlier this morning as she was transferring people ashore, a Navy spokesman said. There’s no nuclear issue or no environmental issue that we are aware of and no one has been hurt.” Cheek the bugger has doesn’t he? “That we’re aware of”! And what happens when we’re done and fried like those kebabs you’re constantly pining for, what then eh Monty?

Monty: Sad news about them kebabs Johnny-boy, Tesco’s not stocking them any more. They’ve filled the shelves up with soyameal crap again.

John: Oh the irony the delicious irony. “The submarine, which carries a crew of 98, will now wait until later today for tug boats to pull her off when the tide comes in.” World’s most advanced vessel they say and now it’s up to ‘umble tugs to get ‘er out of trouble.

Monty: You mean they haven’t phoned bonnie Prince Charlie yet to ask for help? Come to think of it, Alex Ferguson would be a better bet.

John: Can you think of anything else but footer Monty? Here’s some juicy stuff: “Eye-witness Ross McKerlich said the submarine was about a mile from his home and appeared slightly tilted.” Bloody hell, a tilted nuclear sub perched on rocks and tey tell us not to worry?! “He said: ‘When I woke up this morning and looked out my bedroom window I could see the submarine. I am very surprised how far in it has come as there are good navigational buoys there’.” Oh fer heaven’s sake, this is too bloody droll.

Monty: Don’t just sit there moaning Johnny-boy, pass the pint along.