The workings of the agricultural marketplace are amazingly invisible considering how often we must shop for food. The wildfires in Russia last summer caused them to shut down their exports. This in turn gave the speculators plenty of reasons to bid up the cost of commodities. Suddenly, people living on the margins have reasons to revolt which first happened in Tunisia but could have happened in any number places. So it is growing season again in the Northern Hemisphere--how are things this year?
"Resumption of Russian grain exports will stabilize market"
Published: 29 May, 2011, 07:34
Russia will resume exporting grain worldwide on July 1, according to Prime Minister Vladimir Putin. A ban on grain exports was imposed on August 15, 2010 after widespread wildfires devastated Russia.
"From July 1 this year, we will remove the embargo on grain exports," Putin announced at a meeting with his first deputy, Viktor Zubkov, on Saturday.
The government was forced to halt the export of wheat, barley, rye, corn and flour due to an abnormal drought, which saw grain yield decrease 37 percent from 2009 figures, which amounted to 60.9 million tons.
According to Zubkov, the government’s actions were intended to fully satisfy domestic need for grain and to keep grain prices within an acceptable price range for both farmers and consumers.
The embargo was originally scheduled to be lifted on December 31, 2010, but was extended to June 30, 2011.
Experts in the field say the ban has led to a huge grain surplus in southern Russia, which reduced the economic attractiveness of grain production and may lead to a decline in the next harvest.
The experts are mainly positive about the government’s decision, saying that Russian grain is now sought by the world market and may lead to an overall decline in grain prices. more
Russia removes grain embargo with markets quick to respond
Published: 31 May, 2011, 16:49
First Deputy Prime Minister Viktor Zubkov and Russian Prime Minister Vladimir Putin have made a decision to remove the ban on grain exports, with Zubkov saying that the conditions have improved and forecasts are positive.
“Grain prices are now about 5200-5400 roubles per tonne, which is almost half global market prices. Given that we have enough volume of grain crops, a positive forecast for the winter wheat harvest, and the pace of spring field works is good, I believe that we can lift the grain export as of July.”
Russian Prime Minister Vladimir Putin hailed the proposal, noting that the agricultural ministry should keep an eye on market and ensure the volume of supply
"We are lifting the grain export ban from July 1 this year, but I am asking you to work most actively, as you have in recent years, to ensure the good work of the agriculture ministry,”
Viktor Zubkov, First Deputy Prime Minister, noted that the domestic market will be protected from price hikes by grain reserves and tariff regulations.
“We have a very efficient mechanism to counter such possible factors. The current grain intervention fund has reached almost 6 million tonnes of grain and, if there are issues related to price increases, we will apply customs and tariff regulation measures to counter them.” more
Russia is a big player, but is hardly the only one. This year, the food production problems may start in France.
Farmers in crisis as worst drought in decades bites
01/06/2011
The spring of 2011 has been the driest in decades and the hottest in a century, a deep concern for France’s indebted farming community. The younger generation, which has borrowed heavily to invest in properties, is most gravely affected.
By Tony Todd
The worst drought in decades threatens to cripple France’s agricultural sector, while strict water restrictions are being imposed across the country.
Hervé Brulé, a project director at the French Ministry of Ecology, told FRANCE 24 on Wednesday the water shortage was more severe than 1976, when a heat wave and 16-month dry spell parched much of northern Europe.
“This is much worse than anything on record,” he said. “Of course the weather might change as we go into the second half of the year, but so far we have had less spring rain than in 1976.”
Brulé said water restrictions were active in 58 of France’s 96 mainland departments, meaning households were forbidden by law from watering their gardens or filling up their swimming pools on certain days and during daylight hours (see graphic below).
France is the EU's biggest producer of wheat, and a bad harvest could have significant implications for the price of bread far beyond its borders.
And in France itself, a prolonged drought could have severe implications in a sector that is already on the brink. more
There is more to food prices than farmers and weather. There are some HUGE actors that move the world's food around. Whenever food prices threaten social stability, the grain traders get more careful scrutiny. This time, Argentina is accusing the Big Four of tax evasion. (I don't doubt they probably have a case--these traders operate on the thin edge of legality all the time.)
Argentina accuses world's largest grain traders of huge tax evasion
Grain traders ADM, Bunge, Cargill and Dreyfus deny charges by Argentine government of substantial tax evasion
Felicity Lawrence
guardian.co.uk, Wednesday 1 June 2011 19.04 BST
The world's four largest grain traders, responsible for the vast majority of global corn, soya and wheat trading and processing, have been accused of large-scale tax evasion in a landmark series of cases being brought against them by the Argentinian government.
In an interview with the Guardian, Ricardo Echegaray, the head of Afip, the Argentine revenue and customs, has given a detailed account of the charges his department is bringing against ADM, Bunge, Cargill and Dreyfus.
"These companies have gone into criminality," Echegaray said. "2008 was when agricultural commodities prices spiked and was the best year for them in prices, yet we could see that the companies with the biggest sales showed very little profit in this country."
The Guardian has learned from separate sources that Afip is seeking to claim $476m (£290m) for what is says are unpaid tax and duties from Bunge, $252m from Cargill, and $140m from Dreyfus. The companies have all denied all the allegations and have said they will defend themselves vigorously.
With the global food system and who controls it under intense scrutiny in recent weeks, thanks to record prices, the legal battle between Afip and the big "ABCD four", as they are known, has taken on heightened significance.
Oxfam, in a report earlier this week, warned of spiralling prices and a huge increase in global hunger over the next two decades, and said that corporate concentration in the global food trade was a structural flaw in the system. more
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