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Posts Tagged ‘oilseed

How GM ‘science’ misled India

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For the last decade, the reckoning of what agriculture is to India has been based on three kinds of measures. The one that has always taken precedence is the physical output. Whether or not in a crop year the country has produced about 100 million tonnes (mt) of rice, 90 mt of wheat, 40 mt of other cereals (labelled since the colonial era as ‘coarse’ although they are anything but, and these include ragi, jowar, bajra and maize), 20 mt of pulses, 30 mt of oilseeds, and that mountain of biomass we call sugarcane, about 350 mt, therewith about 35 million bales of cotton, and about 12 million bales of jute and mesta.

The second measure is that of the macro-economic interpretation of these enormous aggregates. This is described in terms of gross value added in the agriculture (and allied) sector, the contribution of this sector to the country’s gross domestic product, gross capital formation in the sector, the budgetary outlays and expenditures both central and state for the sector, public and private investment in the sector. These drab equations are of no use whatsoever to the kisans of our country but are the only dialect that the financial, business, trading and commodity industries take primary note of, both in India and outside, and so these ratios are scrutinised at the start and end of every sowing season for every major crop.

The third measure has to do mostly with the materials, which when applied by cultivating households (156 million rural households, of which 90 million are considered to be agricultural only) to the 138 million farm holdings that they till and nurture, maintains the second measure and delivers the first. This third measure consists of labour and loans, the costs and prices of what are called ‘inputs’ by which is meant commercial seed, fertiliser, pesticide, fuel, the use of machinery, and labour. It also includes the credit advanced to the farming households, the alacrity and good use to which this credit is put, insurance, and the myriad fees and payments that accompany the transformation of a kisan’s crop to assessed and assayed produce in a mandi.

It is the distilling of these three kinds of measures into what is now well known as ‘food security’ that has occupied central planners and with them the Ministries of Agriculture, Rural Development, Food and Consumer Affairs (which runs the public distribution system), and Food Processing Industries. More recently, two new concerns have emerged. One is called ‘nutritional security’ and while it evokes in the consumer the idea which three generations ago was known as ‘the balanced diet’, has grave implications on the manner in which food crops are treated. The other is climate change and how it threatens to affect the average yields of our major food crops, pushing them down and bearing the potential to turn the fertile river valley of today into a barren tract tomorrow.

These two new concerns, when added to the ever-present consideration about whether India has enough foodgrain to feed our 257 million (in 2017) households, are today exploited to give currency to the technological school of industrial agriculture and its most menacing method: genetically modified (GM) or engineered seed and crop. The proprietors of this method are foreign, overwhelmingly from USA and western Europe and the western bio-technology (or ‘synbio’, as it is now being called, a truncation of synthetic biology, which includes not only GM and GE but also the far more sinister gene editing and gene ‘drives’) network is held in place by the biggest seed- and biotech conglomerates, supported by research laboratories (both academic and private) that are amply funded through their governments, attended to by a constellation of high-technology equipment suppliers, endorsed by intergovernmental groupings such as the UN Food and Agriculture Organisation (FAO) and the Consultative Group on International Agricultural Research (CGIAR), taken in partnership by the world’s largest commodities trading firms and grain dealers (and their associates in the commodities trading exchanges), and amplified by quasi-professional voices booming from hundreds of trade and news media outlets.

This huge and deep network generates scientific and faux-scientific material in lorry-loads, all of it being designed to bolster the claims of the GM seed and crop corporations and flood the academic journals (far too many of which are directly supported by or entirely compromised to the biotech MNCs) with ‘peer-reviewed evidence’. When the ‘science’ cudgel is wielded by the MNCs through their negotiators in New Delhi and state capitals, a twin cudgel is raised by the MNC’s host country: that of trade, trade tariffs, trade sanctions and trade barriers. This we have witnessed every time that India and the group of ‘developing nations’ attends a council, working group, or dispute settlement meeting of the World Trade Organisation (WTO). The scientific veneer is sophisticated and well broadcast to the public (and to our industry), but the threats are medieval in manner and are scarcely reported.

[This is the first part of an article that was published by Swadeshi Patrika, the monthly journal of the Swadeshi Jagran Manch.]

Written by makanaka

July 21, 2017 at 18:53

Masses of cotton but mere scraps of vegetables

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The sizes of the coloured crop rectangles are relative to each other based on thousand hectare measures. The four pie charts describe the distribution of the main crops amongst the main farm sizes.

For a cultivating household, do the profits – if there are any – from the sale of a commercial crop both enable the household to buy food to fit a well-balanced vegetarian diet, and have enough left over to bear the costs of its commercial crop, apart from saving? Is this possible for smallholder and marginal kisans? Are there districts and talukas in which crop cultivation choices are made by first considering household, panchayat and taluka food needs?

Considering the district of Yavatmal, in the cotton-growing region of Maharashtra, helps point to the answers for some of these questions. Yavatmal has 838,000 hectares of cultivated land distributed over 378,000 holdings and of this total cultivable area, the 2010-11 Agriculture Census showed that 787,000 hectares were sown with crops.

Small holdings, between 1 and 2 hectares, account for the largest number of farm holdings and this category also has the most cultivated area: 260,000 hectares. Next is farms of 2 to 3 hectares which occupy 178,000 hectares, followed by those of 3 to 4 hectares which occupy 92,000 hectares.

The district’s kisans allocate their cultivable land to food and non-food crops both, with cereals and pulses being the most common food crops, and cotton (fibre crop) and oilseeds being the non-food (or commercial) crops.

How do they make their crop choices? From the agriculture census data, a few matters immediately stand out, which are illustrated by the graphic provided. First, a unit of land is sown 1.5 times in the district or, put another way, is sown with one-and-a-half crops. This means crop rotation during the agricultural year (July to June) is practiced but – with Yavatmal being in the hot semi-arid agri-ecoregion of the Deccan plateau with moderately deep black soil – water is scarce and drought-like conditions constrain rotation.

Second, land given to the cultivation of non-food crops is 1.6 times the area of land given to the cultivation of food crops (including the crop rotation factor), a ratio that is made abundantly clear by the graphic. This tells us that the food required by the district’s households (about 647,000 of which about 516,000 are rural) cannot be supplied by Yavatmal’s own kisans.

The vegetables required by the populations of Yavatmal’s 16 talukas (Ner, Babulgaon, Kalamb, Yavatmal, Darwha, Digras, Pusad, Umarkhed, Mahagaon, Arni, Ghatanji, Kelapur, Ralegaon, Maregaon, Zari-Jamani, Wani) can in no way be supplied by the surprisingly tiny acreage of land allocated to their cultivation. Nor do they fare better for fruit, which has even less land (although this is a more complex calculation for fruit trees, less so for vine fruits).

Third, 125,000 hectares to wheat and 71,000 hectares to jowar makes up almost the entire cereals cultivation. Likewise 126,000 hectares to tur (or arhar) and 94,000 hectares to gram accounts for most of the land allocated to pulses. Thus while Yavatmal’s talukas are well supplied with wheat, jowar, gram and tur dal, its households must depend on neighbouring (or not so neighbouring) districts for vegetables, as a minimum of 280,000 tons per year is to be supplied to meet each household’s recommended dietary needs.

What the graphic helps us ask is the size of the costs associated with crop cultivation choices in Yavatmal. The cultivation of hybrid cotton in India’s major cotton growing regions (several districts each in Maharashtra, Andhra Pradesh and Gujarat) is associated with heavy chemical fertiliser and pesticides use. Whether the soil on which cotton has grown can be sown again with a food crop is not clear from the available data but if so such a crop would be saturated with a vicious mix of chemicals that include nitrates and phosphates.

The health of the soil in Yavatmal’s 16 talukas is probably amongst the most fragile in Deccan Maharashtra, and after years of coaxing a false ‘productivity’ out of the ground for cotton, it would be best for the district’s 516,000 rural households to take a cotton ‘holiday’ for three to four years and revert to the mixed and integrated cropping of their forefathers (small millets). But the grip of the financiers and the textiles intermediaries is strong.

Written by makanaka

May 10, 2017 at 16:13

India’s crop quotas for a rain-troubled year

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In this graphic, the size of the crop squares are relative to each other. The numbers are in million tons. Rice, wheat, pulses, coarse cereals, sugarcane. oilseeds and the fibre crops are the major categories for the 2014-15 crop production targets. What is always left out from the 'foodgrain'-based projections are vegetables and fruit, and these I have included based on the 2013-14 advance estimates for horticultural crops.

In this graphic, the size of the crop squares are relative to each other. The numbers are in million tons. Rice, wheat, pulses, coarse cereals, sugarcane. oilseeds and the fibre crops are the major categories for the 2014-15 crop production targets. What is always left out from the ‘foodgrain’-based projections are vegetables and fruit, and these I have included based on the 2013-14 advance estimates for horticultural crops.

Your allocation for the year could be 136 kilograms of vegetables, provided the monsoon holds good, which at this point in its annual career does not look likely. We need the veggies (not just potato, onion, cabbage and tomato) as much as fruit. But the central government is more traditionally concerned with ‘foodgrain’, by which is meant rice, wheat, pulses and coarse cereals.

That is what is meant by the ‘foodgrain production targets’, which have been issued by the Ministry of Agriculture for 2014-15 – as usual with scant sign of whether the Ministries of Earth Sciences and Water Resources were invited to a little chat over tea and samosas. I would have expected at least a “what do you think dear colleagues, is 94 million tons of wheat wildly optimistic given the clear blue skies that o’ertop us from Lutyens’ Delhi to Indore?” and at least some assenting murmurings from those foregathered.

But no, such niceties are not practiced by our bureaucrats. So the Ministry of Agriculture gruffly rings up the state agriculture departments, bullies them to send in the projections that make the Big Picture add up nicely, sends the tea-stained sheaf to the senior day clerk (Grade IV), and the annual hocus-pocus is readied once more. What the departments in the states say they are confident about is represented in the chart panel below, which shows you for rice, wheat, coarse cereals and pulses the produce expected from the major states. The question is: will monsoon 2014 co-operate?

Rice, wheat, coarse cereals and pulses, and the states which grow them the most, targets for 2014-15, using data from the Ministry of Agriculture

Rice, wheat, coarse cereals and pulses, and the states which grow them the most, targets for 2014-15, using data from the Ministry of Agriculture

Written by makanaka

July 12, 2014 at 18:25

India’s 268,000 crore agri sales to a hungry world

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In 2013-14 India exported agricultural products worth Rs 268,469 crore, according to data from the  Department of Agriculture and Cooperation (Ministry of Agriculture, Government of India). Marine products, basmati rice and meat were the major export earners. This amount is equivalent to around 44.67 billion US dollars.

In 2013-14 India exported agricultural products worth Rs 268,469 crore, according to data from the Department of Agriculture and Cooperation (Ministry of Agriculture, Government of India). Marine products, basmati rice and meat were the major export earners. This amount is equivalent to around 44.67 billion US dollars.

There are, as usual, problems with the data. The ‘meat and preparations’ category, the third biggest earner with Rs 27,247 crore, has no quantity figure. Nor does ‘paper/wood products’, the eighth biggest earner (Rs 12,529 crore). Nor do ‘miscellaneous processed items’ (Rs 6,882 crore) or ‘fresh vegetables’ (Rs 5,117 crore).

Here are the top earners by value for 2013-14: Marine Products (Rs 30,617 crore),  Rice Basmati (Rs 29,300 crore), Meat and Preparations (Rs 27,247 crore), Cotton Raw Incld. Waste (Rs 22,248 crore), Rice (Other Than Basmati) (Rs 17,493 crore), Oil Meals (Rs 17,034 crore), Spices (Rs 15,981 crore), Paper/Wood Products (Rs 12,529 crore), Guargam Meal (Rs 11,734 crore). These are the earners above Rs 10,000 crore.

Here are the major quantities exported in 2013-14, in thousands of tons: Rice (Other Than Basmati), 7,019; Oil Meals, 6,564; Wheat, 5,560; Other Cereals, 4,609; Rice Basmati, 3,757; Sugar, 2,460; Cotton Raw Incld. Waste, 1,941; Spices, 1,029; Marine Products, 999; Guargam Meal, 602; Castor Oil, 545; Groundnut, 512; Pulses, 343; Sesame Seeds, 257; Coffee, 254; Tea, 248; Tobacco Unmanufactured, 237; Mollases, 212; Cashew, 121.

A tale of five food indices

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Food and agricultural commodities indices behaviour from 2009 January to 2012 November. There are five series - FAO's food index, FAO's cereals index, Unctad's food sub-index, the IMF's food price index, the IGC's grains and oilseeds index.

Food and agricultural commodities indices behaviour from 2009 January to 2012 November. There are five series – FAO’s food index, FAO’s cereals index, Unctad’s food sub-index, the IMF’s food price index, the IGC’s grains and oilseeds index.

Agricultural commodity and food price indices have ended 2012, as a group, at their highest levels in the last four years.

This chart uses index data from five series – two are from FAO (its food index and its cereals index), there is the Unctad food sub-index (of its long-running commodities index), there is the IMF food price index (which includes cereals, vegetable oils and sugar), and there is the IGC grains and oilseeds index.

I have set them all to ‘1’ in 2009 January and observed their behaviour over 46 months (until 2012 November).
For about a year between 2009 July and 2010 August, there was fairly wide divergence between this group of indices, the FAO cereals index and the IGC index maintaining a lower track, the IMF cereals index not rising above 10% of its starting value, the Unctad food index being volatile and the FAO food index at the top.

From 2010 July to 2011 March all the indices rose steeply and in concert. Thereafter till around 2012 July there was a slow general decline (from about 40% above starting point to about 25% above starting point) for all the indices (with the FAO food index about 15% above the rest).

From 2012 July there has been another steep, albeit shorter, jump for all, and at 2012 November the series at the top is the IGC index, with all five at about 35% to 45% above their starting values.

Written by makanaka

January 4, 2013 at 09:55

India 2012 foodgrain estimate is 257 million tons

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What is still quaintly called an “advance estimate” (the fourth of four that are released by the brobdingnagian agricultural bureaucracy in India) has been made public.

This gives us estimates of the expected production of foodgrain and commercial crops for India in 2012. As usual, the new data release adds to the series I have been providing since the 2008-09 crop year – this now includes the sequential advance estimates for 2008-09, 2009-10, 2010-11 and 2011-12. [Get the spreadsheet here.]

Highlights from this data release:
1. Rice 104.32 million tons, wheat 93.90 mt and coarse cereals 42.01 mt for a combined cereals total of 240.23 million tons. Add 17.21 mt of pulses for a total foodgrains estimate of 257.44 million tons for 2011-12.
2. A total for nine oilseeds of 30.01 million tons (groundnut, castorseed, sesamum, nigerseed, rapeseed and mustard, linseed, safflower, sunflower and soyabean). Sugarcane is 357.66 million tons. For fibres, cotton 5.98 mt, jute 1.96 mt and mesta 0.12 mt.

What about the effect of the poor 2012 monsoon on sowing and harvests, and have the drought conditions and water scarcity in over 300 districts been factored into these numbers? I don’t know. The agri and crop and food babus in India (just like ‘mandarins’ and ‘eurocrats’ elsewhere) aren’t telling.

Written by makanaka

September 24, 2012 at 15:21

Black Sea questions, South Asian rice, the ethanol effect – IGC on grains in 2012 February

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IGC's supply and demand graphs for; top row - total grains, wheat, maize; bottom row - rice, soyabean, and IGC freight index

The International Grains Council (IGC) has released its grains market report for February 2012. In its market commentary, which is a cogent 250-word summation of 1,840 million tons of produce and where it will go, the IGC has said:

Grain and oilseed markets mostly strengthened in the past month, the IGC daily index (GOI) up 6% to near four-month highs. The upturn reflected concerns in early February about maize and soyabean crops in South America, as well as the impact of the recent severe cold spell in parts of Europe and the CIS.  Moreover, after a very high rate of shipments from the Black Sea region in the first half of the season, sales activity declined, with US grain, in particular, attracting much more buying interest.

Wheat export prices in Europe climbed by some 8%, in somewhat tighter markets, with reports of logistical problems and possible future export restrictions in the Black Sea region (though denied), seen as potentially bullish. However, global supplies appear ample, with the likelihood that a portion of upcoming large South Asian wheat harvests will be offered for export. US maize (corn) values remained firm, supported by reports of crop losses in South America and active export interest for remaining old crop supplies, although forecasts of a further rise in US plantings this spring added a bearish element.

Oilseed prices rallied strongly in the past month, reflecting worries about the final outcome of soyabean crops in Argentina and Brazil, good demand for US supplies, including a new trade deal with China, and rising crude oil values. International rice market trends were more mixed, with Thai prices supported by domestic support measures but those in Vietnam, especially broken grades, easing to compete with South Asian offers.

[The IGC 2012 February grains market report is here. The data files as excel spreadsheets are available in this zip archive.]

The IGC’s sectoral advice is:

Grains: The world production estimate is lifted by 11m. tons, to 1,841m., largely because of upward revisions in Australia, Kazakhstan, Ukraine, India and Brazil, the latter because losses of its main maize crop will likely be more than compensated by a larger second crop. These upward revisions outweigh a reduced maize figure for Argentina. To an extent, the forecast of world consumption is adjusted higher to reflect the bigger crop estimates, with total use of grains placed 5m. tons above the January forecast, at 1,836m. The change is mainly for feed use, now put at 775m. tons, 4m. more than before and 4% higher than in 2010-11.

Of particular interest is the marked slowdown in the annual increase in industrial use, expected to rise by only 2% this year, with ethanol use of maize in the US set to recede slightly from its peak in 2011. While the latest statistical forecasts of supply and demand suggest that, nominally, global carryover stocks will rise slightly in 2011-12 from last year’s low figure, to 378m. tons (373m.), the total carryover in the eight major grain* exporters is still expected to dip by 6m. tons, to 131m., the smallest figure since 2007-08.

As this pair of charts shows, the Baltic Dry Freight Index has dropped not only to a one-year low, but is at a three-year low. Charts: Bloomberg

Wheat: A further increase in the global wheat production estimate for 2011-12, to 695m. tons (653m.), boosts total availabilities to 892m., their highest ever. Projected food and industrial consumption are both revised lower this month, but attractive prices, particularly compared with maize, lift the forecast of feed use by 2m. tons, to 131m. (115m.), the most since the early 1990s. Strong feed wheat demand is reflected in the global trade figure, helping to lift total wheat trade to match the 2008-09 peak, at 136.8m. tons (125.7m.). Even though total consumption is growing at a faster than average pace, world stocks are projected to rise to 211m. tons (196m.), eclipsing the previous record in 1999-00.

Maize (Corn): Maize production in 2011-12 is expected to increase by 4%, to a record 864m. tons. The US crop, while disappointing, was slightly above average, and bumper harvests were collected in China, Ukraine and the EU. A severe drought has reduced yield prospects in South America, especially in Argentina, but Brazil remains on track to produce a record crop. Improved supplies in some countries are boosting consumption, with overall use forecast at a record high. Feed use of maize is expected to increase at a faster than average pace but, with US ethanol production likely to decline slightly, the rise in industrial demand will be below trend. With demand outpacing the increase in supplies, ending stocks are forecast to tighten further, including in the US. Amid solid buying by a number of importers, world trade is forecast to rise to a four-year high.

Barley: Better than expected 2011-12 harvest results, including in Argentina and Australia, lift the estimate of world barley production by 1.1m. tons compared with last month, to 134.7m. World consumption is expected to remain steady, contained by uncompetitive prices in the feed sector, especially in the EU, and by sluggish growth in brewing demand. While higher than previously forecast, carryover stocks are set to remain tight, particularly in the EU and North America. The projection of world trade is raised by 1.2m. tons, to a three-year high of 17.8m., with a steep upturn in buying by Saudi Arabia.

Rice: Due to increases in Asia’s biggest producers, China and India, global rice output is projected to rise by 3% in 2011-12, to 463m. tons. The record outturn will be accompanied by a further expansion in demand, to 460m. tons (449m.), but the 2011-12 carryover is still expected to increase by 4%, to 99m. Much of the forecast rise in global stocks will be due to increases in the major exporters, notably in India and Thailand, seen 14% higher, at a record 32.7m. tons. World trade in 2012 is forecast to contract by 7%, to 32.2m. tons, owing to significantly reduced purchases by key Asian buyers, including Bangladesh and Indonesia.

Ocean freight rates between major export-import regions.

Higher agriculture commodity prices here to stay, says major OECD-FAO report for 2011-2020

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Higher agriculture commodity prices here to stay – this is the overall message of the OECD-FAO Agriculture Outlook 2011-20. I will add material to this post from the main report. There is a database attached to the report which will also yield spreadsheets, to be posted here in the weeks ahead.

The OECD-FAO Agriculture Outlook 2011-20 has said that a good harvest in the coming months should push commodity prices down from the extreme levels seen earlier this year. However, the Outlook said that over the coming decade real prices for cereals could average as much as 20% higher and those for meats as much as 30% higher, compared to 2001-10. The press release has more of the big picture message from the Outlook.

Some key questions and concerns have been mentioned. One of these is: what is driving price volatility? The Outlook takes a look at the key forces driving price volatility, which create uncertainty and risk for producers, traders, consumers and governments. About a period of higher commodity prices, the Outlook said commodity prices will fall from their 2010-11 levels, as markets respond to these higher prices and the opportunities for increased profitability that they afford. In real terms, agricultural commodity prices are likely to remain on a higher plateau during the next decade compared to the previous decade.

All commodity prices in nominal terms will average higher to 2020 than in the previous decade. In real terms, prices are anticipated to average up to 20% higher for cereals and 50% higher for some meats, compared to the previous decade. On the forecasts of net agricultural production, global agricultural production is projected to grow at 1.7% annually on average compared to 2.6% in the previous decade. Slower growth is expected for most crops, especially oilseeds and coarse grains, while the livestock sector stays close to recent trends.

Where biofuels and agricultural outputs are mentioned, the Outlook has said the use of agricultural output as feedstock for biofuels will continue its robust growth, largely driven by biofuel mandates and support policies. By 2020, 12% of the global production of coarse grains will be used to produce ethanol compared to 11% on average over the 2008-10 period.

[The OECD-FAO Agriculture Outlook 2011-20 has a dedicated website here.]

[The OECD-FAO Agriculture Outlook 2011-20 Summary is available in English, Français, Español, Chinese, Português and Russian.]

A Nepalese vendor sells food from a roadside stall in Bhaktapur, some 12 kilometers southeast of Kathmandu. Photo: Foreign Policy/Prakash Mathema/AFP/Getty Images

Key points from the summary are:

(1) Commodity prices rose sharply again in August 2010 as crop production shortfalls in key producing regions and low stocks reduced available supplies, and resurging economic growth in developing and emerging economies underpinned demand. A period of high volatility in agricultural commodity markets has entered its fifth successive year. High and volatile commodity prices and their implications for food insecurity are clearly among the important issues facing governments today. This was well reflected in the discussions at the G20 Summit in Seoul in November, 2010, and in the proposals for action being developed for consideration at its June 2011 meeting of Agriculture Ministers in Paris.

(2) This Outlook is cautiously optimistic that commodity prices will fall from their 2010-11 levels, as markets respond to these higher prices and the opportunities for increased profitability that they afford. Harvests this year are critical, but restoring market balances may take some time. Until stocks can be rebuilt, risks of further upside price volatility remain high. This Outlook maintains the view expressed in recent editions that agricultural commodity prices in real terms are likely to remain on a higher plateau during the next ten years compared to the previous decade. Prolonged periods of high prices could make the achievement of global food security goals more difficult, putting poor consumers at a higher risk of malnutrition.

Even in the midst of violence in Ivory Coast, locals shopped at markets in Abidjan’s Koumassi district. Photo: Foreign Policy/Sia Kambou/AFP/Getty Images

(3) Higher commodity prices are a positive signal to a sector that has been experiencing declining prices expressed in real terms for many decades and are likely to stimulate the investments in improved productivity and increased output needed to meet the rising demands for food. However, supply response is conditioned by the relative cost of inputs while the incentives provided by higher international prices are not always passed through to producers due to high transactions costs or domestic policy interventions. In some key producing regions, exchange rate appreciation has also affected competitiveness of their agricultural sectors, limiting production responses.

(4) There are signs that production costs are rising and productivity growth is slowing. Energy related costs have risen significantly, as have feed costs. Resource pressures, in particular those related to water and land, are also increasing. Land available for agriculture in many traditional supply areas is increasingly constrained and production must expand into less developed areas and into marginal lands with lower fertility and higher risk of adverse weather events. Substantial further investments in productivity enhancement are needed to ensure the sector can meet the rising demands of the future.

World crop estimates in June – lower wheat, corn and coarse grain, rice mixed

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Here it is, just released. The World Agricultural Supply and Demand Estimates (WASDE) of the USDA, 09 June 2011. Highlights and key points for the major crop groups follow:

Global wheat supplies for 2011-12 are projected slightly lower this month as an increase in beginning stocks is more than offset by lower production. Global beginning stocks are projected 4.9 million tons higher mostly reflecting increased stocks in Russia as feeding is reduced 2.0 million tons and 5.0 million tons, respectively, for 2009-10 and 2010-11. Beginning stocks for 2011-12 are also raised 0.5 million tons each for Argentina and Canada with the same size reductions in 2010-11 exports for each country. Partly offsetting is a 1.5-million-ton decrease for 2011-12 beginning stocks for Australia with higher 2010-11 exports.

World wheat production is projected 5.2 million tons lower for 2011-12. At 664.3 million tons, production would be the third highest on record and up 16.1 million from 2010-11. This month’s reduction for 2011-12 mostly reflects a 7.1-million-ton decrease for EU-27 wheat output. Persistent dryness, particularly in France, but also in Germany, the United Kingdom, and western Poland, has reduced yield prospects for EU-27. Production is also reduced 1.0 million tons for Canada as flooding and excessive rainfall, particularly in southeastern Saskatchewan and adjoining areas of Manitoba, are expected to reduce spring wheat seeding. Production is increased 1.5 million tons for Argentina and 0.5 million tons for Australia, both reflecting favorable planting conditions and strong producer price incentives to expand area. Production is also raised 0.5 million tons for Pakistan as increased use of higher quality seed and adequate water supplies resulted in higher-than-expected yields.

Global wheat trade for 2011-12 is projected slightly higher reflecting a 0.5-million-ton increase in expected imports by EU-27. Exports are lowered 3.0 million tons for EU-27. Export increases of 2.0 million tons and 1.0 million tons, respectively, for Australia and Argentina offset the EU-27 reduction. Exports are raised 0.3 million tons for Pakistan with the larger crop. Global wheat consumption is projected down 3.3 million tons, mostly reflecting a 2.5-million-ton reduction in EU-27 domestic use.

Global coarse grain supplies for 2011-12 are projected down 7.8 million tons this month with lower beginning stocks and production. Reduced U.S. corn production, lower EU-27 barley production, and reduced corn beginning stocks in China, more than offset increases in China corn production. EU-27 barley production is lowered 2.2 million tons as prolonged dryness across western and northern Europe has sharply reduced yield prospects in the major producing countries. China corn area is raised for 2010-11 in line with the most recent official government area estimates with the year-to-year percentage increase for 2011-12 largely maintained.

China corn production increases 5.0 million and 6.0 million tons, respectively, for 2010-11 and 2011-12 with yields unchanged month-to-month. More than offsetting the higher production levels is higher estimated corn consumption for both feeding and industrial use. China corn consumption is raised 8.0 million tons and 13.0 million tons, respectively, for 2010-11 and 2011-12. Together these changes leave projected 2011-12 corn ending stocks down 12.0 million tons for China. At the projected 51.0 million tons, China’s stocks would be down 2.7 million tons from 2010-11 and just below the levels of the preceding 2 years, better reflecting the continuing rise in domestic corn prices as production struggles to keep pace with rising usage. Although China’s stocks represent 46 percent of the world total for 2011-12, China is not expected to be a significant exporter.

Global 2011-12 corn trade is raised slightly this month with higher imports for EU-27 and higher exports for Ukraine. Ukraine exports are raised 1.0 million tons with higher production and stronger expected demand from EU-27. Russia exports are lowered 0.5 million tons with lower production. Other important trade changes this month include a 0.2-million-ton increase in sorghum imports by Mexico, driving the U.S. export increase, and a 1.5-million-ton reduction in EU-27 barley exports with lower production and tighter supplies. Barley imports are lowered for Saudi Arabia and China. Global corn ending stocks for 2011-12 are projected down sharply this month, falling 17.3 million tons mostly reflecting the usage revisions in China. The projected 5.2-million-ton drop in U.S. ending stocks accounts for most of the rest of the decline. Global corn stocks are projected at 111.9 million tons, the lowest since 2006-07.

Global 2011-12 rice supply and use are lowered from a month ago. Global production is projected at a record 456.4 million tons, down 1.5 million from last month’s forecast, primarily due to a decrease for China. Additionally, production projections are raised for Egypt and Guyana, but lowered for the United States and Cuba. China’s 2011-12 rice crop is projected at 138.0 million tons, down 2.0 million from a month ago; primarily due to the impact of prolonged drier-than-normal weather in the Yangtze River Valley affecting mostly early rice. Egypt’s crop is increased 0.9 million tons to 4.0 million due to a 33 percent increase in area—based on a recent report from the Agricultural Counselor in Cairo. The global import and export forecasts for 2011-12 are little changed from last month. Global consumption for 2011-12 is lowered 0.8 million tons, primarily due to lower consumption expected in China, but partially offset by increases for Egypt, EU-27, and Vietnam. Global ending stocks for 2011-12 are projected at 94.9 million tons, down 1.3 million from last month, due primarily to reductions for China and the United States which are partially offset by increases for Egypt, the Philippines, and Vietnam.

Global oilseed production for 2011-12 is projected at 456.9 million tons, down 2.3 million from last month, mainly due to lower rapeseed production. EU-27 rapeseed production is reduced 1.2 million tons to 18.8 million mainly due to lower yields resulting from dry conditions in April and May in major producing areas of France and Germany. Rapeseed production for Canada is lowered 0.5 million tons to 13.0 million due to reduced area planted resulting from excessive moisture this spring. China soybean production is reduced 0.5 million tons to 14.3 million reflecting lower area as producers shifted to corn. Other changes include increased sunflowerseed production for Russia, and reduced cottonseed production for Australia, Pakistan, and the United States. Brazil’s 2010-11 soybean production is increased 1.5 million tons to a record 74.5 million, reflecting yield and production increases reported in the most recent government survey. [Get the full WASDE report here.]

Hedge funds, Russian grain, Libyan crisis, South Asian food stocks

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Durable commentary and analysis in the FAO Monthly News Report on Grains, 2011 February, which is carried in full on this page. The highlights:

Sell-off in grains and oilseeds ‘an over-reaction, reported Agrimoney on 25 February 2011: The sell-off of in grain and oilseed markets in response to the Libyan crisis is an over-reaction, with tight supplies, particularly of corn, warranting continued high prices. The Canadian Wheat Board said that the Libyan unrest “in reality, does not materially change the grain fundamentals facing the market”, even through the global economic fears it has provoked through lifting oil prices.

Hedge Funds Cut Food-Price Bets as Grains Take a Fall, reported Bloomberg on 25 February 2011: Bullish bets on soybeans fell 18 percent and those for corn slid 3.4 percent. Holdings in eight agriculture commodities by money managers are higher than during the global food crisis three years ago. Investors put a record $2.6 billion into agriculture-index swaps, exchange-traded products and medium-term notes last month, after pouring $5.7 billion during the fourth quarter of 2010, according to Barclays Capital. In the week ended Feb. 8, hedge funds and other speculators increased bullish bets on wheat to a combined 51,787 futures and options contracts, the highest since August 2007.

Russia could prolong grain export ban: deputy PM, reported Business Recorder on 22 February 2011: Russia on Tuesday said it may extend a ban on grain exports that has been blamed for triggering global food price rises beyond its provisional expiry date of July 1. “We discussed the option of extending the grain export ban after July 1,” news agencies quoted First Deputy Prime Minister Viktor Zubkov as saying. Analysts link the spike in wheat prices to subsequent jumps in the cost of both Russian dairy products and beef.

Pakistan: Govt expects bumper wheat crop, lacks proper storage, reported Asian Pulse on 17 February 2011: Government has set wheat procurement target of 6.5 million metric tons expecting a bumper crop estimated to be 23.5 million metric tons for 2011 wheat season. The Government of Pakistan, while ensuring minimum wheat support price of Rs.950/- per 40 kgs to the farmers, procures around 28 to 30pc of the total crop to safeguard the interests of the farmers whose efforts have made the country not only self-reliant but also enabled to export the surplus wheat this year.

India Foodgrains Production in 2010-11 Estimated at 232.07 MT ; 2nd Advance Estimates of Crop Production Released, reported the Press Information Bureau on 9 February 2011: The second advance estimates of crop production for 2010-11 have been released. India is likely to produce 232.07 million tonnes of foodgrains during 2010-11 compared to 218.11 million tonnes last year. This is only marginally below the record production of 234.47 million tonnes of foodgrains in 2008-09. India is likely to achieve record production of wheat (81.47 million tonnes), pulses (16.51 million tonnes) and cotton (339.27 lakh bales of 170 kg. each) this year. Central Statistics Office (CSO) has estimated that the agriculture, forestry and fishery sector is likely to show a growth of 5.4% in its GDP during 2010-11, as against the previous year’s growth of 0.4%.