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Sugar Market to Have Supply Shortfall for Two Seasons

November 5th, 2008 Posted in Brazil, Commodities, India

Global sugar demand will outpace supply for two seasons as Indian and European production declines and consumption rises, the International Sugar Organization said.

The ISO in August forecast a decline in output to 161.6 million metric tons in the year to September 2009 and consumption of 165.5 million tons. While slower global economic growth will curb demand, there will still be a supply deficit, according to Leonardo Bichara, an economist at the ISO. The shortfall will widen in the 2009-2010 season, he said today.

Sugar is the second-best performer on the UBS Bloomberg CMCI Index this year on expectations of lower output. Raw sugar in New York has climbed 17 percent, while refined sugar traded in London has advanced 13 percent. Both types of the sweetener declined in each of the previous two years as supply outstripped demand.

Brazil, the world’s biggest exporter of sugar, may scale back its ethanol production growth to help plug the supply shortfall, Bichara said.

“We expect Brazil to expand production to cover part of this increasing demand, so instead of having a 6.5 million-ton deficit, which you would have if production would remain fixed, the deficit will be about 4.5 million tons” in 2009-2010, Bichara said.
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Corus, Vale in pact for supply of iron ore

October 16th, 2008 Posted in Brazil, Commodities, India

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livemint.com

Tata Steel has said that its European subsidiary Corus has entered into a long-term contract with Brazilian miner Vale to secure supplies of about 63 million tonnes of iron ore for a period of five years.

The contract would come into effect in 2009, Tata Steel said in a statement here.
“We are pleased to have reached this important agreement with Vale. This contract complements the raw material strategy for Tata Steel Group’s European operations of combining external sources with future captive supplies,” Corus CEO Philippe Varin said.

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Boom in beef returns opens the door to a bonus for Uruguay

October 14th, 2008 Posted in Agriculture, Commodities, Uruguay

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Scotsman.com Business

BEEF from South America has been traded on the international markets for the better part of a century with Argentina and Brazil the big players in this field. However, in recent years Uruguay has become an increasingly important source of beef for the European trade, especially in terms of quality.

The population of Uruguay at 3.2 million is significantly less than that of Scotland, but its beef industry is much larger. In the first six months of this year Uruguay exported 141,300 tonnes of fresh and frozen beef to a wide range of destinations.

The physical volume of exports was little changed on the previous year. However, the value of that trade increased by more than 50 per cent, reflecting the growing demand for beef.
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Colombia aims to make El Dorado gold myth a reality

October 1st, 2008 Posted in colombia, Commodities

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Forbes.com

Colombian gold production is expected to more than double over the next decade as a crackdown on leftist rebels makes wide areas of the country safe for exploration after decades of violence.

Colombia, home to the legend of a gold-filled lake called El Dorado, will produce 41.5 tonnes (1.463 million ounces) of the metal this year, twice what it did before the government went on the attack against the guerrillas six years ago, Director of Mines Beatriz Duque told Reuters on Tuesday.

In 2002, when popular President Alvaro Uribe was first elected on promises of crushing the 44-year-old insurgency, Colombia produced 20 tonnes of gold. The rebels, financed by cocaine smuggling, have since been pushed deep into rural areas having lost several top leaders this year.

Speaking from her offices in the capital, Bogota, Duque said gold output would likely hit 106 tonnes by 2019 as new mines come on stream.

“We are still an underexplored country on a detailed level in terms of mining, precisely due to the fact that security conditions kept us closed to investment,” Duque said.

EL DORADO: MYTH OR REALITY?

Duque’s job is to jump-start the flow of information and other services to investors as the sector draws new interest. Fifty-four companies, more than half of them Canadian, are exploring for gold and other metals in Colombia.

Improved security is drawing prospectors in droves, just as the Spaniards were lured to Colombia centuries ago by the myth of El Dorado.

Foreign investment in the overall mining sector was $798 million in the first quarter of this year compared with $466 million in all of 2002, according to central bank figures.
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Asia-Latin Trade Boom

September 30th, 2008 Posted in China, Commodities, Economics - Indicators, Policy and Trends, India, Latin America

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Latin Business Chronicle

With the U.S. economy continuing to show weak results, Latin America is increasingly betting on Asia. Latin American exporters have found eager markets in countries like China, Japan and India, while Asian companies, in turn, are boosting their exports to Latin America.

“The growth of Asia will drive the business with Latin America,” says R. Viswanathan, India’s ambassador to Argentina, Uruguay and Paraguay and widely considered India’s leading expert on Latin America. “Both governments and business have started looking at the potential for complementarities between the two regions.”

While international prices on commodities, the key Latin American export to Asia, are expected to fall or level out, two-way trade between the regions should keep growing thanks to a combination of factors, experts say. They include growing demand for other products in various Asian markets, more demand for Asian products in Latin America and an increasing number of bilateral free trade agreements across the Pacific.

“Trade will grow despite short-term commodity price fluctuations because demand in Asia remains high for Latin America’s resources,” says Michael Diaz, managing partner at U.S.-based law firm Diaz Reus, which serves many clients involved in Asian-Latin American business.

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India’s sugar mills favour duty-free raws imports

September 29th, 2008 Posted in Brazil, Commodities, India

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Reuters

Indian mills should be allowed to import raw sugar duty-free against a commitment to export the refined commodity as domestic output is expected to fall sharply, a leading industry body said on Monday.

India, the world’s biggest producer of the sweetener after Brazil, allowed mills to import raw sugar free of duty in 2005 on the condition that the same amount of refined sugar would be exported within 36 months.

“It is important that the scheme introduced in 2004/05 to improve capacity utilisation of the industry be put in place once again,” Jayantilal Patel, president of the National Federation of Cooperative Sugar Factories, said at the annual general meeting of the industry body.

Analysts say imports of raws by India would cheer major producers such as Brazil, Thailand and Australia and push up benchmark prices in New York and London. Patel said India’s sugar output, estimated to be about 20 million tonnes in the year from October, would fall short of likely domestic consumption of 22.5 million tonnes.

Technorati Tags: sugar

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FDI in Latin America, Caribbean hits record 126.3 billion dollars for 2007

September 25th, 2008 Posted in Commodities, Investing, Latin America

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Earth Times Finance General

Foreign direct investment (FDI) in Latin America and the Caribbean reached a record 126.3 billion US dollars in 2007, the United Nations Conference on Trade and Development (UNCTAD) said Wednesday in the Chilean capital Santiago. UNCTAD expected the figure to continue to rise in 2008.

Brazil, Mexico, Chile and Argentina received a combined 67 per cent of the inflow, with Brazil alone claiming three out of every 10 dollars that arrived in the region.

In total, South America obtained 72 billion dollars in FDI in 2007 – a figure that is larger than the combined gross domestic products of Bolivia, Ecuador and Uruguay.

Central America and the Caribbean, aside from tax havens, saw an increase in FDI received to 34 billion dollars, but the UNCTAD report warned that this might be at risk in the face of the ongoing credit crisis in the United States.

Brazil alone received 28 per cent of FDI in the region, followed by Mexico at 21 per cent, Chile at 11 per cent, the Cayman Islands at 9 per cent, Colombia at 7 per cent and Argentina at 4 per cent.

UNCTAD said that the rise in investment was tied to the high prices of commodities.

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Industry experts say mining’s future shines

September 24th, 2008 Posted in BRICs, Chile, Commodities, Peru

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Peru, Chile and Brazil are in the sweet spot.
San Jose Mercury News

Every segment of the mining industry and the companies that support it continue to enjoy great success with no end in sight despite trouble on Wall Street, industry leaders said Monday at a national conference and trade show.

Much of the optimism can be attributed to the unprecedented demand from China and India, said Harold Quinn, president and CEO of the National Mining Association.

“The boom in worldwide mining activity and the equipment to bring those products to market has arguably been the biggest economic success story of the year,” he said at MINExpo International 2008, which opened Monday in Las Vegas. He expects the gathering to be the largest ever with more than 35,000 attendees—twice as many as the last such expo in 2004.

Timothy W. Sullivan, president and CEO of equipment manufacturer Bucyrus International Inc. and chairman of MINExpo 2008, said the record size of this year’s exhibition is an indication of the strong market conditions for mining and mining equipment.

“We’ve had an unprecedented run over the last few years, thanks largely to the developing world’s powerful and sustained demand for copper, gold, iron ore, coal and other products of mining,” he said. “We see nothing near term to dampen the bullish outlook.”
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World food balance unclear for next decade-France

September 22nd, 2008 Posted in Agriculture, Brazil, Commodities, Economics - Indicators, Policy and Trends, India

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Forbes.com

World farming will face uncertainty for at least 10 years over how far supply and demand can be balanced, implying little short-term relief from price volatility, the EU’s leading agricultural producer France says.

In a working paper authored by France and being discussed by EU agriculture ministers at an informal meeting until Sept. 23, Paris says uncertainty about how much food to produce to meet demand will be the main issue to shape farm policy.

“An increase in agricultural productivity, in conjunction with the emergence of second-generation biofuels which compete less with food production, should reduce the tension on certain commodities markets,” the paper says.

“However, at least for the next decade, agriculture will probably have to face uncertainty about the final balance between supply and demand,” it says.

Farming experts say recent price rises in key food commodities such as cereals, rice, livestock and dairy products can be attributed to a global range of diverse factors, both temporary and structural.

They include unpredictable weather in key producer countries, structural changes in demand, high oil prices, development of biofuels and changes in consumer eating habits in countries like China, Brazil and India.

A broad consensus had emerged that there would be greater price instability due to wider opening of markets, more public health crises and climate change, which would increase the scale and frequency of unforeseen natural events, the paper said.

Agricultural policy strategies in major producer countries like Brazil and the United States would be key for price development, as would those in major consuming areas like China and India in terms of how demand might develop, it said.

Technorati Tags: food crisis, agriculture policy

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World water maps

September 21st, 2008 Posted in Commodities, India, Latin America, Visualizations

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Those who say water is a human right and so should be free are inhabiting an alternate reality. The world population is projected to reach 9 billion in 2050 from 6.5 billion today. There is NO way of piping free or subsidized water to these vastly increased numbers in Asia, especially India. The number of ‘water tanker’ ships plying the world’s oceans is only bound to increase dramatically. The countries of Latin America can be founding members of a possible OWEC! (Organization of Water Exporting Countries). (All images via WorldMapper)

World Water Resources: Of all the water available, the regions of South America and Asia Pacific have the most.

World Water Use: On average, people living in Central Africa each use only 2% of the water used by each person living in North America.

Map shows those territories that use much of their internal water resources, measured with a threshold of people using more than 10% of renewable water resources.

World Water Depletion: Map shows those territories that use much of their internal water resources, measured with a threshold of people using more than 10% of renewable water resources.

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