Monday 25 November 2013

Coal consumption to hit 4.8b tons by 2020

2013-11-25
(Xinhua)
BEIJING -- China's coal consumption is expected to hit 4.8 billion metric tons by 2020, the China National Coal Association (CNCA) forecast on Sunday.

Liang Jiakun, CNCA vice president, said the nation's coal industry still has more growth potentials as coal remains its main energy source, which currently accounts for more than 60 percent of the country's primary energy resources.

CNCA data showed that China's coal output increased to 3.65 billion tons last year from 2.35 billion tons in 2005, representing an annual increase of 190 million tons. Consumption in 2012 stood at 3.52 billion tons.

However, Liang said that the sector faces ever more development challenges as the country puts greater emphasis on economic restructuring and transforming economic growth pattern. Meanwhile, ecological environment protection also puts a restraint on its development.

Liang said China has been accelerating efforts to restructure the coal industry by shutting down small coal mines, with the total number of mines reduced to 14,000 by 2012 from 24,800 in 2005.

Wheat firms on expectations of overseas demand

Mon Nov 25, 2013
* Wheat firms more than 0.5 pct

* Its two-day gains near 1 pct

* Soybeans fall on profit-taking, corn tracks higher
By Colin Packham
SYDNEY, Nov 25 (Reuters) - U.S. wheat futures rose on Monday, extending gains into a second straight session for the first time in a month, as production concerns in other key
exporters buoyed expectations for increased demand.

Soybeans fell for the first time in three sessions as traders banked profits, while corn tracked wheat higher.

Chicago Board of Trade March wheat rose 0.61 percent to $6.61 a bushel, having closed up 0.34 percent in the previous session.

Wheat futures last rose for two consecutive sessions on Oct. 22 and 23.

"The gains are being driven by the rising competitiveness of U.S. wheat," said Vanessa Tan, investment analyst at Phillip Futures Singapore.

"Previously you have seen tenders bypassing U.S. wheat, but now with Australia for one seeing unfavorable weather conditions, this could shift demand to the U.S."

Unseasonal rains in Western Australia and frost on the country's east coast have hit wheat crops in the world's No.2 exporter of the grain, dragging down quality and reducing harvests.

Elsewhere, the Rosario Grains Exchange last week forecast Argentina's wheat crop at 9.1 million tonnes in its first estimate of the season, well below the 11-million-tonne view of
the U.S. Department of Agriculture.

January soybeans fell 0.23 percent to $13.16-1/2 a bushel, having closed up 2.2 percent on Friday.

Soybeans had drawn support from strong export demand, analysts said.

The USDA confirmed on Friday that private sales of 115,000 tonnes of U.S. soybeans to China.

The USDA in its weekly report on Thursday said soybean sales last week were well above expectations at nearly 1.4 million tonnes.

December corn rose 0.18 percent to $4.23 a bushel, having closed down 0.2 percent the session before.

  Grains prices at  0324 GMT
  Contract        Last    Change  Pct chg  Two-day chg MA 30   RSI
  CBOT wheat     661.00     4.00  +0.61%    +1.89%     667.37   55
  CBOT corn      423.00     0.75  +0.18%    +0.00%     430.15   48
  CBOT soy      1316.50    -3.00  -0.23%    +1.94%    1281.82   64
  CBOT rice      $15.73    $0.02  +0.10%    -0.51%     $15.52   51
  WTI crude      $94.04   -$0.80  -0.84%    -0.84%     $95.91   45
  Currencies                                               
  Euro/dlr       $1.354  -$0.001  -0.10%    +0.47%
  USD/AUD         0.916    0.000  -0.04%    -0.77%
  Most active contracts
  Wheat, corn and soy US cents/bushel. Rice: USD per hundredweight
  RSI 14, exponential

(Editing by Joseph Radford)

Soybeans Retreat From Eight-Week High on South America Outlook

By Phoebe Sedgman - Nov 25, 2013
Bloomberg
Soybeans declined from the highest level in eight weeks on expectations favorable soil moisture in Brazil, the world’s biggest exporter, and rain this week in Argentina will boost crops. Wheat and corn advanced.

The contract for January delivery lost as much as 0.3 percent to $13.16 a bushel on the Chicago Board of Trade and was at $13.17 by 10:54 a.m. in Singapore. Prices climbed to $13.22 on Nov. 22, the highest since Sept. 27, on signs demand was increasing for U.S. supplies.

Soybeans lost 6.6 percent this year as global production may increase to a record 283.5 million tons, the U.S. Department of Agriculture predicts. Abundant showers in northern Brazil through this week will improve moisture, while drier weather in southern areas will allow wetness to ease, MDA Information Systems LLC said Nov. 22. In Argentina, showers in central Buenos Aires early this week should help improve moisture and prevent stress on crops, it said.

“For the South American soybean crop, weather is being viewed as favorable near-term,” Australia & New Zealand Banking Group Ltd. analysts including Paul Deane wrote in a note. “Soil moisture in Brazil is generally good, while dry weather in Argentina is keeping the pace of soybean plantings on track before a low pressure system hits the region later this week and generates some much needed rain.”

Production in Brazil is set to reach a record 88 million tons in 2013-2014 and Argentina’s harvest may jump 8.5 percent to 53.5 million tons, according to the USDA.

Wheat for March delivery gained 0.5 percent to $6.60 a bushel. Corn rose 0.2 percent to $4.3025 a bushel.

Spot iron ore seen supported by light Chinese winter buying

Mon Nov 25, 2013
* Lean steel demand keeps iron ore buying interest in check

* Iron ore has only traded between $135 and $137 in November
By Manolo Serapio Jr
SINGAPORE, Nov 25 (Reuters) - Spot iron ore prices are likely to stay between $135 and $137 a tonne for a fourth week, supported by Chinese mills replenishing winter stockpiles
although ample supplies could cap gains.

Slow steel demand in top consumer China has trapped iron ore prices in narrow ranges this month, with producers not aggressively building stockpiles as the weather gets colder.

"There's still some demand although in previous years, buying was much stronger around this time. Some of the mills we've spoken to only have inventory for about two weeks and
that's quite short, so we expect them to replenish," said a Shanghai-based iron ore trader.

Benchmark 62-percent grade iron ore .IO62-CNI=SI gained 0.1 percent to $136.50 a tonne on Friday, according to data provider Steel Index.

"Restocking activity is driving the current strength but with high levels of inventory at port and light demand from the construction sector in China, we expect prices to edge lower
towards year-end," Australia and New Zealand Banking Group said in a note.

Since the start of November, iron ore has peaked at $137.10 from a low of $135.30.

"We are not in a hurry to take cargo because profit margin is too small to justify any risk in holding cargo at this point," the Shanghai trader said.

Global miner Rio Tinto  sold a cargo of 61.4-percent grade iron ore via tender on Friday at $135.50 per tonne, up from $134.90 earlier in the week, the trader said.

Chinese mills tend to rely more on imported iron ore during winter when domestic production slows down, but lean steel demand has curbed that appetite.

The most-traded rebar contract for May delivery on the Shanghai Futures Exchange was little changed at 3,629 yuan ($596) a tonne by midday on Monday. Rebar, a construction steel product, is down slightly for the month, after falling more than 5 percent in September and October.

At the Dalian Commodity Exchange, iron ore for May delivery was unchanged at 932 yuan a tonne.

  Shanghai rebar futures and iron ore indexes at 0408 GMT

  Contract                          Last    Change   Pct Change
  SHFE REBAR MAY4                   3629     +8.00        +0.22
  DALIAN IRON ORE MAY4               932     +0.00        +0.00
  THE STEEL INDEX 62 PCT INDEX     136.5     +0.20        +0.15
  METAL BULLETIN INDEX            136.48     +0.74        +0.55
  Dalian iron ore and Shanghai rebar in yuan/tonne
  Index in dollars/tonne, show close for the previous trading day
 ($1 = 6.0936 Chinese yuan)

(Editing by Himani Sarkar)

India may have to start importing iron ore soon: Steel Ministry

PTI
NEW DELHI, November 24, 2013
Iron ore production has come down from 213 MT in 2008-09 to 136 MT 2012-13.

The Steel Ministry is of the view that India will have to import iron ore in the immediate future to meet significantly increasing demand from domestic companies.

“With many projects in the pipeline, both brownfield and greenfield expansion of steel capacity, iron ore requirement will increase significantly leading to imports of iron ore in near

future,” the Steel Ministry has said in a recent presentation to the Planning Commission.

The Ministry in its mid-year plan review has identified iron ore availability as one of the challenges to achieve the steel production target of 300 million tonnes per annum (mtpa) by 2025.

With current production capacity of around 90 mtpa, India needs at least 140 million tonnes (MT) iron ore to meet its need. It requires 1.5-1.6 MT iron ore to produce one million tonne of

steel.

“Domestic requirement of iron ore is increasing with the capacity addition in steel production. Between the 2008-09 and 2012-13 period, the demand for iron ore has gone up from 87.4 million

tonnes (MT) to 124.8 MT,” it said.

India, the world’s fourth largest producer of steel after China, Japan and the US, had produced 78.31 MT steel during 2012-13. It is likely to slightly inch up in current fiscal.

During the January-October period of the current year, India produced 66.38 MT steel.

The Steel Ministry also said iron ore production has come down from 213 MT in 2008-09 to 136 MT 2012-13 due to ban on mining in Karnataka and sharp fall in production in Odisha.

“It would require sufficient time for 200 MT plus production (of iron ore),” the Ministry said.

The government has already taken steps discourage iron ore exports by raising the duty to 30 per cent.

As per the United National Framework Classification (UNFS) of mineral resources, total resource of iron ore in the country is around 28.51 billion tonnes, as on April 1, 2010.

Country’s iron ore production is expected to rise in the coming days with the Supreme Court partially lifting ban on iron ore mining in Karnataka, a producing state.

Tuesday 12 November 2013

Soyameal exports jump nearly four-fold to 1.94 LT in October

By PTI | 11 Nov, 2013
NEW DELHI: Soyameal exports have jumped nearly four-fold at 1.94 lakh tonnes (LT) in October as crushing operations of soyabean started early in the current marketing year, according to industry data. 

"Exports of Soybean meal during October 2013 was 1.94 lakh tonnes as compared to 0.51 lakh tons in October 2012 showing an increase of 280.4 per cent," Soyabean Processors' Association of India (SOPA) said in a statement. 

When contacted, SOPA spokesperson and co-ordinator Rajesh Agrawal attributed the sharp jump in soyameal exports to early start of crushing operations in 2013-14 marketing year that started last month. 

Although marketing year starts from October, the crushing operations pick up from November and hence, the exports in October are generally low. 

Japan was the major importer last month with a quantity of 1.04 LT, followed by Iran at 33,035 tonnes. 

India exported 34.73 LT of soyameal in 2012-13 marketing year (October-September). 

On a financial year basis, soyameal exports rose by 21 per cent during April 2013 to October 2013 is 10.71 LT as compared to 8.88 LT in the same period of previous year.

Monday 11 November 2013

Shanghai rebar hits one-week low on property curbs

Mon Nov 11, 2013
* Shanghai to raise downpayment for second-home purchases

* Dalian iron ore also hits one-week low
By Manolo Serapio Jr
SINGAPORE, Nov 11 (Reuters) - Shanghai steel futures dropped to one-week lows on Monday amid concern fresh efforts in China to curb property purchases may dent demand for the building material.

Shanghai will raise the minimum downpayment for second-home purchases to 70 percent from 60 percent, the city's housing bureau said on Friday, following similar moves by other big
cities in China.

Home prices in large Chinese cities have set records, despite a four-year government campaign to cool the property market, raising worries over a potential price bubble.

The most-traded rebar contract for May delivery on the Shanghai Futures Exchange was down half a percent at 3,651 yuan ($600) a tonne by the midday break, after touching a
low of 3,633 yuan, its weakest since Nov. 1.

"The restriction will be negative for steel demand and I heard that most of the buyers have already been done with restocking," an iron ore trader in Shanghai said.

China's iron ore futures were similarly lower, with Dalian prices also touching their weakest level since Nov. 1.

The most-active May iron ore contract on the Dalian Commodity Exchange was off 0.2 percent at 938 yuan a tonne, after falling to as low as 934 yuan.

Data over the weekend that showed China's industrial output rising 10.3 percent in October from a year earlier, faster than market expectations of 10 percent, failed to lift steel and iron
ore prices.

Market participants are more keen on any policy signals that would emerge from the Communist Party meeting in China which began on Saturday and ends on Tuesday, traders said.

President Xi Jinping and Premier Li Keqiang must unleash new growth drivers as the world's second-largest economy loses steam, burdened by industrial overcapacity, piles of debt and
soaring house prices.

Appetite for spot iron ore cargoes may be limited this week, traders said, after Chinese buyers snapped some shipments last week.

Iron ore for immediate delivery in China's Tianjin port .IO62-CNI=SI slipped 0.7 percent to $135.90 a tonne on Friday, according to data provider Steel Index. The price reached a
two-month peak of $137.10 on Nov. 6.

"Fundamentals may not support the price to stand above $135. There's no shortage of cargo in the market and mills are not hungry for material at the moment," said another trader in
Shanghai.

  Shanghai rebar futures and iron ore indexes at 0430 GMT

  Contract                          Last    Change   Pct Change
  SHFE REBAR MAY4                   3651    -20.00        -0.54
  DALIAN IRON ORE MAY4               938     -2.00        -0.21
  THE STEEL INDEX 62 PCT INDEX     135.9     -1.00        -0.73
  METAL BULLETIN INDEX            136.07     -0.55        -0.40
  Dalian iron ore and Shanghai rebar in yuan/tonne
  Index in dollars/tonne, show close for the previous trading day
 ($1 = 6.0905 Chinese yuan)

(Editing by Himani Sarkar)

Could Russia ape Ukraine as a big force in corn?

8th Nov 2013, by Agrimoney
Could Russia follow Ukraine in emerging as a major force in world corn exports?

The "persistently wet weather" which has this year held back Russia's wheat harvest, which the US Department of Agriculture on Friday downgraded by 2.5m tonnes to 51.5m tonnes, has done little to hamper the country growth as a corn grower.

Indeed, the USDA raised its forecast for the Russian corn crop to 2.5m tonnes, to a record high.

While the corn harvest, at 11.5m tonnes, is still relatively small compared with that of big producing countries such as the US, Brazil and China, it represents a rise of 40%  year on year on last year's result .

With that enough to allow record exports of 2.5m tonnes, it echoes the situation late in the last decade in Ukraine, which has in the last four years near-tripled production to 29.0m tonnes.

Ukraine's exports have soared from 5.1m tonnes to 18.0m tonnes over the same period, making it the third-ranked exporter, after the US and Brazil, and equal with Argentina.

Better result

The rise in Russia's output this year, from less than 4m tonnes in 2009-10, is in part down to the one-off effect of benign weather – for an autumn-harvested crop, at least.

"Although some of Russia's top corn-producing territories were subject to below-normal subsurface moisture reserves in mid-summer, the crop was not subject to the unusually high July and August temperatures that have reduced yield in several recent years," the USDA said.

However, the rise also reflects the growing popularity of the crop among growers, with the estimate of corn area upgraded to a record 2.25m hectares, on a harvested basis.

One major factor in boosting former Soviet Union corn production has been the availability of better-quality seed, with some producers turning to Canada for non-genetically modified varieties suited to a mid-continental, northern latitude climate.

The USDA pegged Russia's average corn yield at 5.11 tonnes per hectare – up 21% year on year.

GRAINS-Corn up for second session after USDA crop forecast

Mon Nov 11, 2013
* Corn firms for second session on USDA estimate

* USDA pegs corn production at less than 14 billion bushels

* Soybeans dip after jumping 2 pct on Friday
By Colin Packham
SYDNEY, Nov 11 (Reuters) - U.S. corn futures rose for the second consecutive session on Monday and have now risen more than 2 percent to a near-two-week high after a U.S. Department of Agriculture (USDA) crop forecast for the United States that was lower than expected.

Soybeans slipped back, having jumped more than 2 percent on Friday, the biggest increase in eight weeks, and wheat also fell.

Chicago Board of Trade December corn rose 0.59 percent to $4.29-1/2 a bushel, trading just below the session high of $4.30-3/4 a bushel, which was the highest since Oct. 31. Corn closed up 1.5 percent on Friday.

"The USDA's final production figure, while being revised to a record, still fell under the magical 14 billion bushel mark," said Luke Mathews, a commodities strategist at the Commonwealth Bank of Australia. "That smaller-than-expected upgrade supported short-covering on Friday and that positive tone seems to have extended into early Asian trading."

USDA said U.S. corn production would total 13.989 billion bushels, based on an average yield of 160.4 bushels per acre.

Analysts had forecast the USDA would put the crop at 14.003 billion bushels and an average yield of 158.933 bushels per acre.

January soybeans fell 0.15 percent to $12.94 a bushel, having firmed 2.3 percent on Friday.

Beans had firmed after the USDA put global ending stocks of soybeans at 170.23 million tonnes, more than 2 million tonnes below the average of trade forecasts.

The USDA said U.S. soybean crop production would total 3.258 billion bushels, the third-largest on record and 1 percent larger than the analysts had expected.

Brazil raised its official forecasts for its 2013/14 corn and soybean harvests, with soy output seen at a record high.

December wheat was little changed at $6.49-1/2 a bushel, having closed down 0.5 percent on Friday.

Wheat was under pressure from the USDA's estimate for ending stocks of 565 million bushels, well above expectations of 516 million bushels. Higher flour extraction rates reduced demand for food wheat, the USDA said.

  Grains prices at  0400 GMT
  Contract        Last    Change  Pct chg  Two-day chg MA 30   RSI
  CBOT wheat     649.50    -0.25  -0.04%    -0.54%     681.26   13
  CBOT corn      429.25     2.50  +0.59%    +2.08%     435.90   50
  CBOT soy      1294.00    -2.00  -0.15%    +2.17%    1271.49   61
  CBOT rice      $15.60   -$0.10  -0.61%    +0.61%     $15.29   72
  WTI crude      $94.65    $0.05  +0.05%    +0.05%     $98.87   36
  Currencies                                               
  Euro/dlr       $1.336  -$0.001  -0.07%    -0.42%
  USD/AUD         0.938    0.000  -0.05%    -0.78%
  Most active contracts
  Wheat, corn and soy US cents/bushel. Rice: USD per hundredweight
  RSI 14, exponential

(Editing by Alan Raybould)

Rice, Sugar Crops Damaged in Philippines by Super Typhoon Haiyan

By Chanyaporn Chanjaroen & Cecilia Yap - Nov 11, 2013
Bloomberg
Rice and sugar crops were destroyed by Super Typhoon Haiyan when it cut through the central Philippines flattening buildings and unleashing floods that may have killed as many as 10,000 people.

Rice imports may increase because of shortages, pushing purchases above an estimate of 1.1 million metric tons by the U.S. Department of Agriculture, said Samarendu Mohanty, senior economist at the International Rice Research Institute, which is using satellite-monitoring to get a better assessment.

Futures traded in Chicago fell 0.6 percent today to $15.60 per 100 pounds and are 6.1 percent below a 19-month high in June as global production expands 0.9 percent to a record 473.2 million tons, according to USDA data. Sugar futures traded in New York declined 6.6 percent in the past year.

“Depending on damage from the typhoon, the import number may change,” Mohanty said by phone. “I’d think there will be some increase. I can’t tell now how much exactly.” While the Eastern Visayas, the hardest hit area, represents only 5 percent of national output, shortages may strain inventories, he said.

The United Nations said it’s stepping up relief operations, with much of the destruction concentrated in and around Tacloban city, capital of Leyte province. The difficulty in reaching the worst-hit areas means the number of casualties has yet to be confirmed, said the Red Cross in Geneva, which cited Philippine authorities as saying the death toll may reach 10,000.

Mill Damage

Between 50,000 tons and 120,000 tons of sugar may have been lost as the typhoon damaged crops in Visayas, which accounts for more than half the nation’s plantations, Sugar Regulatory Administration head Regina Martin told reporters in Manila.

About 25,000 hectares of sugar in the area are affected and losses may rise, said Martin, citing preliminary data.

Cane crops as well as milling infrastructure may have sustained “significant” damage across northern Negros, Panay and Leyte islands, Green Pool Commodity Specialists Pty said in a report today. Negros represents 55 percent of country’s cane output, Panay about 6 percent and Leyte about 2%, said Green Pool, a research company based in Brisbane.

The true extent of the damage may not be known for weeks or months, director Tom McNeill, who has followed sugar for more than 25 years, said in a separate e-mail.

Hanjin Shipping CEO Resigns on Losses, Debt Repayments

By Kyunghee Park - Nov 11, 2013
Bloomberg
Hanjin Shipping Co. (117930)’s Chief Executive Officer Kim Young Min resigned, taking responsibility for two successive years of losses at South Korea’s largest shipper and a delay in getting financial support from creditors.

Kim, 58, will stay until a replacement is found, the Seoul-based company said in an e-mailed statement today. Kim was appointed as CEO in January 2009 after 20 years with Citigroup Inc., and his term was to end in March 2015.

Shares of the container-to-commodity mover, which last month received a loan from affiliate Korean Air Lines Co. to ease a “temporary” liquidity shortage, fell for a fifth straight day in Seoul. Laden with debt, Hanjin is among liners battling a global overcapacity and slump in cargo rates caused by China’s weak iron-ore demand, factors that pushed STX Pan Ocean (028670) Co. to file for a court receivership in June.

“There’s no good news for Hanjin right now,” said Yun Hee Do, an analyst at Korea Investment & Securities Co. in Seoul. “The company hasn’t been able to make money recently and its interest payment has been increasing. There’s quite a sizable amount of debt coming due next year for Hanjin.”

Korean Air said last month it will provide 150 billion won ($141 million) to Hanjin to help ease the company’s liquidity shortage. The shipping line has 736.4 billion won of debt and loans maturing next year, compared with 58 billion won in 2013, according to data compiled by Bloomberg. Its cash and cash equivalent was 506.6 billion won at the end of June.

Shares Drop

Hanjin Shipping’s $150 million of convertible notes sold in July 2011 were yielding 9.232 percent today compared with 9.184 percent at the start of the month, according to Bloomberg-compiled prices.

The stock fell as much as 1.4 percent to 7,000 won before trading at 7,050 won as of 12:26 p.m. in Seoul. The stock was up by much as 3 percent earlier today. Hanjin has slumped 41 percent this year, compared with a 0.6 percent decline in the benchmark Kospi index. Hyundai Merchant (011200) dropped as much as 6 percent and STX Pan Ocean advanced as much as 10 percent today.

Hanjin Shipping is considering selling new shares, loans and perpetual bonds to raise funds to repay its debt and improve finances, Korea Economic Daily said on Oct. 31, citing unidentified company officials. Sonya Cho, a Hanjin Shipping spokeswoman, said a share sale is among options being considered by the company.

Korea Development Bank and other lenders may provide short-term loans to the shipping company, Maeil Business Newspaper said today, citing financial industry officials it didn’t name. Hanjin posted a loss in each of the past 10 quarters.

Chaebol Hanjin

Korean Air, the nation’s biggest airline, is the largest shareholder of Hanjin’s parent Hanjin Shipping Holdings Co. They are both part of the Hanjin Group, which also has aerospace-related businesses.

Hyundai Merchant Marine Co., the country’s second-biggest shipping company, collected 156 billion won in a share sale last week. That was less than the 214.5 billion won the company expected to raise, according to a Nov. 4 regulatory filing.

Korea Development Bank bought 224 billion won of bonds sold by Hyundai Merchant last month to help the shipping company refinance its maturing debt. About 462.7 billion won of debt and loans are due next year, according to data compiled by Bloomberg.

STX Restructuring

STX Pan Ocean, South Korea’s biggest commodities-shipping company, went under court protection in June with a net debt of 5.37 trillion won at the end of 2012. The company has submitted its revival plan to the court in Seoul, which included a debt-for-equity swap and a rescheduling of loans.

Spot rates to haul container cargo from Asia to Europe, the world’s busiest trading lane, have dropped 5 percent from this year’s high, according to the Shanghai Shipping Exchange. Those from Asia to U.S. west coast dropped 32 percent to $1,718 per 40-foot box.

The Baltic Dry Index fell for three years since 2010, touching a record low in February last year of 647 because of slowing demand for moving iron ore, a key ingredient in making steel, to China. The gauge has since more than doubled to 1,581 as of Nov. 8.

Hanjin Shipping narrowed losses to 121.8 billion won in the first half, from 346.6 billion won loss a year earlier.

Sugar industry says exports crucial to reverse current bearish trend

VISHWANATH KULKARNI, THE HINDU BUSINESS LINE
FAO bullish on prices, points to weather woes in Brazil

NEW DELHI, NOV. 10:  
While the Food and Agriculture Organisation (FAO) has struck a bullish note on sugar in its recent outlook, the Indian industry is striking a different note.

The industry feels that unless 3-4 million tonnes are shipped out of the country, sugar prices are unlikely to stabilise, reversing the downtrend.

FAO last week said that global sugar prices would rise in the coming days on unfavourable weather conditions impacting harvest in Brazil, the largest sugar producer.

GLOBAL PRICES

“Sugar quotations increased by 9 per cent from July to October 2013. Although early in the season, the size of the production surplus remains uncertain, indications are that it will be much smaller than early estimates and not as large as the past two years. If these early assessments prove true as the season progresses, it will certainly lend some upward support to world sugar quotations,” it said.

Global raw sugar prices averaged 19.31 cents a pound during January-June, down 20 per cent over the corresponding period a year ago. However, in September, prices averaged at around 17.4 cents a pound and rose to around 18.7 cents a pound in October.

FAO estimates the global sugar output for 2013-14 at 180.2 million tonnes, marginally higher than last year. It expects bulk of the growth in global output to come from developing countries, such as India, Thailand and Pakistan.

However, FAO said: “India’s competitiveness on the international market is being constrained by rising production costs and falling world prices, which may limit further gains in world markets”. It has pegged India’s sugar output at 25.5 million tonnes for the 2013-14 season, while forecasting exports at 2.1 million tonnes.

UNVIABLE EXPORTS

The Indian industry has begun the 2013-14 season with a huge opening balance of 8.5 million tonnes, which is weighing on sugar prices that are in the bearish phase.

Mills are under pressure to liquidate stocks – that’s resulting in excess market supplies dragging the price. “Exports are currently not viable from India, but sugar can be pushed out, provided there is some support from the Government, say, in terms of transport subsidy for both inland and oceanic freight,” said Abinash Verma, Director-General of Indian Sugar Mills Association.

The Government had provided export subsidy in 2006-07 to ship out about 60 lakh tonnes of sugar. Mills in coastal areas then received a subsidy of Rs 1,350 a tonne, while those in the hinterland got Rs 1,450 .

“A subsidy of Rs 1,000-1,500 is good enough to help us export the surplus sugar,” said Verma. Also, the Government could help millers by providing interest-free loans to tide over the current crisis.

Earlier, the Government had extended such interest-free loans in 2007-08 to an extent of Rs 3,500 crore.

Sugar mills currently owe about close to Rs 4,000 crore to farmers for cane purchases made last year. Crushing for the current season is yet to start, as mills are seeking clarity on cane pricing, while farmers are demanding a higher price for their produce. An estimated half a million tonne raw sugar from the new crop has already been contracted for exports, mainly from Maharashtra.

Fertiliser Ministry moves to cabinet with proposal to drop assured buyback of urea

By PTI | 10 Nov, 2013,
NEW DELHI: The Fertiliser Ministry has moved a proposal to the Cabinet to remove guaranteed buyback clause in the urea investment policy and adopt a bidding process to shortlist companies after the lucrative incentive led to a flood of applications for expanding capacities.

In January, the ministry notified the New Investment Policy (NIP) 2012 -- approved by the Cabinet Committee on Economic Affairs in December last year -- to incentivise manufacturers for raising domestic urea output.

Policy guaranteed buy-back of urea for eight years from start of production. Encouraged by this clause, 13 fertiliser firms applied for setting up new plant or expanding capacity of existing plant by about 16 million tonne.

However, India needs an additional capacity of only 8 million tonne of urea to become self-sufficient. The domestic production stands at about 22 million tonne.

According to sources, the ministry has moved a proposal before CCEA to remove the buy-back clause and introduce bidding process for shortlising 4-5 applicants from among the 13 that have applied.

In the inter-ministerial consultation, Finance Ministry has suggested for bidding process, they added.

The policy has been hold as the fertiliser ministry wants to permit only 4-5 players for creating additional urea capacity.

Although the parameters of bidding process have not been finalised, sources said the cost of production could be a basis for shortlisting the applicants.

The government could reduce subsidy bill, projected at Rs 66,000 crore for this fiscal, by shortlisting manufacturers that quote lower cost of production.

Government controls urea sector by fixing MRP at Rs 5,360 per tonne. Difference between MRP and production cost is reimbursed as subsidy to fertiliser companies.

The Ministry wants to provide transparent and objective criteria for giving approval to the proposals received so that only as much capacity is added as is required to meet the demand and supply gap.

Among the major players who have approached the DoF for greenfield or brownfield expansion under the NIP are: IFFCO, Tata Chemicals, Indo Global Fertilisers, Chambfal Fertilisers and Chemicals, Rashtriya Chemicals and Fertilisers, National Fertilisers Ltd.

The NIP 2012 passed by the CCEA had also proposed a $2 per tonne increase in floor and ceiling prices of urea for every 0.1 $per million metric British thermal unit (mmbtu) increase in delivered gas prices up to $14 per mmbtu.

Monday 21 October 2013

Govt Open to Extension of Raw Mineral Ban Deadline

By Ranga Prakoso, October 21, 2013.
The Jakarta Globe
Details are emerging as to how the government will allow case-by-case extensions to next year’s deadline of a mineral export ban, a top official said in Jakarta. Initial indications suggest it will include export quotas and collateral from mining companies.

Companies are likely to miss the deadline set by a 2009 law forcing them to process all their ore domestically or risk shutting down their operations and laying off thousands of workers.

After the deadline has passed, companies would be unable to export raw minerals.

The government is sending out a team to verify 28 smelter projects across the country. The findings would provide the basis for extensions to the deadline.

The team, comprising officials from the industry, energy and mineral resources, and trade ministries will verify the progress being made by mining companies to determine their commitment to the new regulations, said Dede Ida Suhendra, director of mineral concession and development at the Ministry of Energy and Mineral Resources.

“The results of the verification will be the starting point for determining a company’s mineral ore export quota in 2014,” Dede said on Sunday.

He said companies would have to pay a bond to the government as collateral they would finish the smelter by a stated deadline. The verification team would give a recommendation for the amount of the bond while the government and economists will have the final say.

Should the company fail to complete the smelter on time the government would keep the collateral.

Susilo Siswoutomo, deputy minister of energy and mineral resources, said on Friday miners that proved their commitment to processing mineral commodities domestically would be allowed to continue exporting for a specified period.

Susilo said the government would ask the House of Representatives how to allow mineral exports without having to revise the 2009 law.

Mining companies have had several years to plan for the local processing requirement, since the law requiring it was enacted in 2009, but they have been reluctant to start work citing long-term, existing contracts with smelters overseas.

With an election in 2014 the government — faced with the politically embarrassing prospect of companies forced to close and lay off large numbers of employees — has been scrambling to find an exit strategy that pushes for the law’s provisions without seeing mass layoffs.

Chinese iron ore futures fall on subdued steel demand outlook

Mon Oct 21, 2013
* Iron ore futures fall after rise on debut day

* Mills restocking curbed by tight cash flow

* Steel demand is typically sluggish in winter season
By Ruby Lian and Fayen Wong
SHANGHAI, Oct 21 (Reuters) - Chinese iron ore futures fell more than 1 percent on Monday as restocking by steel mills in the world's top consumer remained tepid on a sluggish demand
outlook for the alloy in the fourth quarter.

Steel demand typically slows down in November and December as construction activities in China's northern regions are hampered by the cold temperatures, which limits steel mills'
appetite for building inventories of the raw material.

"Mills' sales orders are weaker and they are short of cash flow which has restrained iron ore buying, wiping out upside for prices, though purchases in small volumes have kept prices
relatively steady for now," said an iron ore trader in Shanghai.

The most active 62 percent grade iron ore futures for May settlement on the Dalian Commodity Exchange fell 1.5 percent to a session low of 960 yuan ($160) a tonne. It closed
0.6 percent lower at 969 yuan.

The new contract closed 1.8 percent higher at 977 yuan on its debut on Friday. The contract price includes a 17 percent value added tax and other costs.

By comparison, the benchmark spot price for same grade iron ore .IO62-CNI=SI stood unchanged at $134.4 a tonne on Friday, according to provider Steel Index.

In the absence of a pick-up in orders from end users, Shagang, China's top privately-owned steelmaker, kept prices unchanged for late October bookings, traders said. That means
rebar will fetch 3,580 yuan a tonne and wire rod 3,640 yuan a tonne.

The most-traded January rebar contract on the Shanghai Futures Exchange inched up 0.25 percent to close at 3,570 yuan a tonne after falling for three consecutive sessions.

"The cash flow will remain a big issue for mills until there is a big improvement in steel demand and some billet producers are cutting prices to withdraw cash," said an iron ore trader in
Beijing.

  Shanghai rebar futures and iron ore indexes at 0800 GMT

  Contract                          Last    Change   Pct Change
  SHFE REBAR JAN4                   3570     +9.00        +0.25
  THE STEEL INDEX 62 PCT INDEX     134.4     +0.00        +0.00
  METAL BULLETIN INDEX            134.78     +0.17        +0.13

  Rebar in yuan/tonne                                                
  Index in dollars/tonne, show close for the previous trading day
 ($1 = 6.0968 Chinese yuan)

(Editing by Muralikumar Anantharaman and Anand Basu)

Morning markets: wheat extends gains, but sugar rally stalls

21st Oct 2013, by Agrimoney
Two agricultural commodities, sugar and wheat, were notable for strong performances in the last session, but only one managed to extend gains into early deals on Monday.

And that wasn't sugar.

Prices of the sweetener gained 2.6% in the last session – and hit 20.16 cents a pound at one point, their highest in nearly a year - after fire tore through a port warehouse belonging to Copersucar, Brazil's largest producer of the sweetener and ethanol.

"This worsened concerns about the supply of raw sugar," Joyce Liu at Phillip Futures said, noting also the rain which has been slowing Brazil's cane harvest.

'Compounded market worries'

At Commonwealth Bank of Australia, Luke Mathews said: "The fire in Brazil spooked traders and led to significant short covering and large spread movements.

"Brazilian sugar production is already down on expectations this year, so any further losses compounded market worries."

However, was the damage quite as severe as had been thought?

While it is as yet unclear for how long Copersucar sugar export activities will be disrupted for, with estimates between three and six months, the co-operative did say that 180,000 tonnes of raw sugar had been destroyed  - less than the 300,000 tonnes initially reported.

Raw sugar for March stalled at 19.50 cents a pound  in New York as of at 09:55 UK time (04:55 New York time, 03:55 Chicago time).

'Large buyers of US wheat'

As for wheat, it managed to extend its winning streak, adding 0.6% to $7.10 ¼ a bushel in Chicago for December delivery, as worries over tighter world supplies persisted.

Argentina's estimate last week of an 8.8m-tonne harvest - well below forecasts from other commentators including the US Department of Agriculture, which has the crop at 12.0m tonnes – continues to prove a major prop to values.

On the face of it, "lower wheat production in Argentina limits their exportable surplus and means Brazil will remain large buyers of US wheat," as Mr Mathews noted.

But there is more, in that many investors believe a crop of that size will prompt Argentina's government, which has a rich history of intervention in agricultural markets, will ban exports altogether.

While denting export earnings, this would keep domestic prices in check, and avoid the risk of spiralling food inflation which, as North Africa's recent experiences have reminded, can fuel social unrest.

'Rain will be critical'

But US prices are also being lifted by ideas that supplies from some other major exporters are not so healthy either, with Ikar, the market analysis group, estimating on Friday that the rain restrictions to autumn sowings have already cost Russia 4m tonnes of wheat production.

Sure, area left void now can be planted in the spring. But spring wheat has lower yields than winter wheat.

Besides, farmers will likely opt to put much of the non-seeded area into spring crops such as corn or sunflowers instead.

Meanwhile, although Australia's nascent harvest is not providing any major concerns, there are some niggles.

"Hot and dry conditions continue to plague producers across the eastern states, leading to a loss of yield potential," Mr Mathews said, although noting forecasts for rains heading into southern New South Wales and Victoria.

"The rain will be critical in ensuring further yield losses are avoided."

Iraq tender

There are ideas on the market, anyway, of hefty demand for US supplies, from China as well as Brazil.

Benson Quinn Commodities, flagging fresh rumours of sales of five-to-six cargoes of wheat to China, equivalent to perhaps 200,000-250,000 tonnes, said that "any confirmation of rumoured business will attract additional buying".

Late on Friday, the US Department of Agriculture revealed, in delayed data, that US wheat export sales for the week to September totalled 837,000 tonnes, twice some market estimates.

Still, the market on Monday also received a reminder that US supplies can be uncompetitive to some destinations, with an Iraq tender showing Ukraine wheat as the cheapest offered, at $326 a tonne c&f, while Romanian was offered at $348.35 a tonne and Russian at $355 a tonne.

Australian wheat was priced at $362.50, Canadian and $369.90 a tonne and US at $394 a tonne.

Backlogged data

With wheat firm, that gave some help to corn too, which added 0.3% to $4.42 ¾ a bushel in Chicago for December delivery, keeping below $2.60 a bushel at least its already high discount to wheat.

The USDA data showed decent corn exports too in the week to September 26, of 775,300 tonnes, in the top end of market estimates, and prospects for USDA data backlogged by the Washington shutdown revealing further large orders gave bulls some traction despite forecasts for a record US harvest.

"Corn futures continue to chop higher as traders wait for updated weekly export sales. Many expect a large number due to talk of sales with China, Japan and Mexico," CHS Hedging said.

As for the harvest, on progress, a USDA report revealed after the close of play is seen showing some 35% of the US crop in the barn.

Strong exports

For soybeans, the figure is expected nearer 55-60% completion, and with light showers this week expected to see continuing rapid progress.

"This equates to near 1.89bn bushels of fresh supplies based on USDA's forecasted production of 3.15bn bushels in September, and should start to alleviate some of tight pipeline issues," Kim Rugel at Benson Quinn Commodities said.

Still, there are ideas of huge figures for US export sales too to be released from the USDA, on top of shipments which have already reached 976m bushels so far for 2013-14 – 71% of the forecast for the full season, less than two months in.

A year ago, the figure was 64%.

Soybeans for November added 0.4% to $12.96 a bushel.

Raw Sugar Surges to One-Year High as Fire Hits Brazil Port

By Isis Almeida & Lucia Kassai - Oct 19, 2013
Bloomberg
Raw-sugar futures jumped to the highest in almost a year after a fire left four injured and six warehouses “totally compromised” at the biggest port in Brazil, the world’s largest producer and exporter.

A blaze that is now under control started at the port of Santos at about 6:10 a.m. local time, affecting the six depots owned by Copersucar SA and destroying 180,000 tons of raw sugar, the Sao Paulo-based company said in statements today. Copersucar didn’t say when it plans to resume sugar loading at the port terminal, or how long it will take to rebuild the affected facilities.

“In a preliminary assessment, Codesp informs that all the affected facilities in the accident are totally compromised,” Santos-based Codesp, the state-controlled operator of the Port of Santos, said in an e-mailed statement today.

Copersucar, the world’s largest sugar trader after Minneapolis-based Cargill Inc., shipped 5.12 million tons of the sweetener in the crop year 2011-12 that started in April, according to information on its website.

Copersucar’s sugar cargoes that are on the road heading to the Port of Santos have been diverted to a neighboring terminal controlled by a Cosan SA Industria & Comercio unit, Sao Paulo-based Cosan said in a separate statement.

Slower Harvesting

Sugar gained 11 percent in New York last month, the most since July 2011, as rain will mean reduced output in Brazil’s Center South, the country’s main growing region, according to Sao Paulo-based industry group Unica. Dry periods will be short and infrequent over the next 60 to 75 days, slowing harvesting and exports, Celso Oliveira, a meteorologist with Somar Meteorologia, said this week.

“One estimate is it could take up to six months to get operational in some form again so the impact on the delivery and next year’s harvest will be felt,” Michael McDougall, head of Brazil desk at Newedge Group in New York, said by e-mail.

Raw sugar for delivery in March rose 2.6 percent to settle at 19.5 cents a pound on ICE Futures U.S. in New York at 2 p.m. Earlier, prices gained as much as 6.1 percent to 20.16 cents, the highest for a most active contract since Oct. 22.

Copersucar trades sugar and ethanol from 47 mills, including Virgolino de Oliveira SA and Aralco SA Acucar & Alcool. Virgolino’s $300 million of 2018 securities rallied 2.7 cents to 77.4 cents. Aralco’s $250 million of 2020 bonds rallied 0.7 cents to 73.9 cents on the dollar.

Santos Depots

Fire affected depots 20, 21, VI, XI, XVI and XXI, according to the Codesp statement. The terminal’s facilities have the capacity to store 300,000 metric tons of sugar, Guilherme Pena, a spokesman for Copersucar, said in a telephone interview from Sao Paulo.

Ten ships were scheduled to load sugar at Copersucar’s terminal at Santos from yesterday through Nov. 3, Isis Markarian, a market assistant at Santos-based SA Commodities and Unimar Agenciamentos Maritimos, said by telephone today. The ships were scheduled to load 38,000 tons of white sugar and at least 340,000 tons of raw sweetener, according to Nicolle de Castro, a business analyst at the company.

“The main issue is how long these warehouses and surrounding parts of the loading terminals will be out of action and how it will disrupt port operations,” Kona Haque, an analyst at Macquarie Group Ltd. in London, said by telephone today.

Copersucar was the seller of 83 percent of raw sugar delivered on ICE to settle the October futures, two people with direct knowledge of the transaction said Oct. 1. The ICE delivery totaled a record 1.49 million tons, and Louis Dreyfus Commodities took all of the sweetener.

Eleni Androulaki, a spokeswoman for Louis Dreyfus, declined to comment on how the fire will affect deliveries.

Global Surplus

About 398,659 raw-sugar contracts changed handed on ICE today. That would be the highest aggregate volume for futures since January 2008. Trading was more than triple the average in the past 100 days, according to data compiled by Bloomberg.

Through yesterday, prices fell 47 percent since reaching a 30-year high in 2011 as farmers from Brazil to Australia boosted output, resulting in a record global surplus of 10 million tons last season, according to the International Sugar Organization in London. For the current season, supplies will top demand by 2 million tons, according to London-based Czarnikow Group Ltd., which traded 2.4 million tons of raw sweetener last year.

Refined, or white, sugar for delivery in December gained 1.5 percent to $513.80 a ton on NYSE Liffe in London, after reaching $529.40, the highest since March.

Wheat Advances to Four-Month High on Argentine Harvest Outlook

By Phoebe Sedgman - Oct 21, 2013
Bloomberg
Wheat climbed for a third day to the highest level in four months as cold and dry weather damaged crops in Argentina, threatening to curb record global supplies.

The contract for December delivery on the Chicago Board of Trade gained as much as 0.8 percent to $7.1125 a bushel, the highest price for most-active futures since June 21, and was at $7.1025 by 12:48 p.m. in Singapore. Prices rose 2 percent last week, advancing for a fifth straight week.

About 100,000 hectares (247,105 acres) were damaged in Entre Rios and La Pampa provinces due to cold weather and lack of rain, according to the Argentine Agriculture Ministry. The country is the top exporter in the Southern Hemisphere after Australia, according to the U.S. Department of Agriculture. Wheat declined 8.7 percent this year as the USDA predicts global production will jump to a record 708.9 million metric tons.

“Lower wheat production in Argentina limits their exportable surplus and means Brazil will remain large buyers of U.S. wheat,” Luke Mathews, a commodity strategist at Commonwealth Bank of Australia, wrote in a note today.

Argentina will harvest 8.8 million tons in 2013-2014, the country’s agriculture ministry said Oct. 17. The USDA predicts production of 12 million tons. The agency’s reports were halted due to the 16-day government shutdown that started Oct. 1.

Colder weather could produce some frost in Argentina’s southern areas early this week, possibly damaging heading wheat, forecaster DTN said Oct. 18.

Russia may lose 4 million tons from its potential harvest after rains restricted planting of winter crops, the Institute for Agricultural Market Studies said last week.

Corn for December delivery fell 0.1 percent to $4.41 a bushel. Soybeans for delivery in November were little changed at $12.915 a bushel.

India's rice exports may fall to 9.3 million tons in 2013-14: USDA

By PTI | 21 Oct, 2013
NEW DELHI: Rice exports from India, the world's largest producer and exporter, are estimated to fall marginally to 9.3 million tonnes in 2013-14 marketing year that started this month, a latest report said.

India re-entered the rice exports market in September 2011 after a four-year ban on exports of non-basmati rice. It had emerged as the world's largest rice exporter in 2012 ahead of its Asian counterpart Thailand.

According to the US Department of Agriculture (USDA), rice exports are pegged at 9.3 million tonnes for the 2013-14 marketing year (October-September), slightly lower than 10 million tonnes in the same period last year.

The report did not give reasons for projecting a likely drop in rice shipments for this year.

However, the USDA noted that the Indian government is unlikely to impose any export restrictions in the near future with the forecast of near-record production and "more-than-sufficient" government-held rice stocks this year.

Stating that strong exports may affect domestic price movement, the report said the government has enough rice stocks to control any significant flare up in domestic prices due to the upcoming general elections in 2014.

Assuming normal weather conditions during the harvesting period, the USDA said that the country's total rice production is projected to remain near-record 105 million tonnes, as against 104.4 million tonnes last year. A record rice output of 105.3 million tonnes was achieved in 2011-12.

Earlier, the USDA had forecast rice output of a record 108 million tonnes this year. It has now lowered the rice output projections considering lower planting due to deficient rains in eastern states, the major rice growing region where most of the rice is not irrigated, the report said.

Continued dryness in October in eastern India and the 'normal' cyclones in October-November period across coastal India could damage the standing crop and further temper the prospects of summer-sown rice production, it added.

USDA has pegged overall India's consumption to rise marginally to 96.70 million tonnes during 2013-14, while estimating the total grain availability at 130.5 million tonnes for the same period.

Monday 7 October 2013

Iron ore prices pressured by supply, softer China steel market

Mon Oct 7, 2013
* Chinese markets reopen on Tuesday after week-long break

* Iron ore steadied at $131.40/tonne last week
By Manolo Serapio Jr
SINGAPORE, Oct 7 (Reuters) - Greater supply of iron ore and a subdued Chinese steel market may weigh on prices for the steelmaking raw material when China reopens after a week-long holiday.

Trading in both iron ore physical and swaps markets remained thin on Monday, a day before Chinese markets resume trading.

Benchmark 62-percent grade iron ore .IO62-CNI=SI for delivery to top market China stood at $131.40 a tonne over the past week, based on data compiled by Steel Index.

"There's a bit of concern over more availability of spot iron ore from miners so traders are not in a hurry to take on any positions," said a Hong Kong-based trader.

Iron ore exports to China from Australia's Port Hedland, which handles about a fifth of the global seaborne iron ore market, rose 3.2 percent to just under 23 million tonnes in September from August.

Global miners have been ramping up output confident Chinese demand will remain brisk. Rio Tinto loaded the first shipment of iron ore from its expanded annual capacity in Australia of 290 million tonnes in September and has said a further expansion of its port, rail and power infrastructure is underway towards a planned 360 million tonnes capacity.

Traders will be eyeing Shanghai rebar futures on Tuesday. They hit a 12-week low of 3,570 yuan ($580) a tonne shortly before Chinese markets closed for the National Day holiday amid rising steel stockpiles.

"Some of the Chinese expect a move down during the re-opening tomorrow. We have probably been sitting on the bullish side for the past couple of weeks given the low inventories for iron ore at ports and sustained appetite for steel," said an iron ore swaps broker in Singapore.

"But we're beginning to think a small sell-off might be the likeliest scenario. Rebar is so fickle it always does the opposite of what you fundamentally expect it to do."

There may also be pressure on Chinese commodities and equities as some investors shy away from riskier assets due to the nearly week-long U.S. budget impasse. Concern is mounting that the stalemate could drag on and undermine moves to increase Washington's borrowing limit by an Oct. 17 deadline, raising the possibility of a sovereign bond default.

($1 = 6.1220 Chinese yuan) (Reporting by Manolo Serapio Jr.; Editing by Joseph Radford)

India, Africa should form JVs in fertiliser area: Vikramjit Singh Sahney

By PTI | 6 Oct, 2013,
JOHANNESBURG: Indian and African companies should form joint ventures for setting up fertiliser units in the continent as it will help both the regions to enhance agriculture production, says an industry official.

There is a vast potential between the regions in the fertiliser sector. Africa has huge deposits of raw material like phosphate and potash for fertiliser production.

"Companies of both the sides should form joint ventures in setting up of units," Sun International Chairman Vikramjit Singh Sahney told PTI here.

Sahney was one of the members of India-Africa Business Council. He was here to attend the second meeting of the council, with Indian industry body Ficci as a partner. Sun International is involved mainly in trading of fertilisers and intermediates besides agriculture commodities.

He said countries in Africa like Ghana and Nigeria have gas reserves while huge phosphate rock deposits are there in South Africa and Togo. Potash deposits are also present in several parts of the continent.

Sahney also said India can help Africa in enhancing agriculture production.

"India has modern technology in fertiliser production. Agriculture production in Africa has stagnated and its population is increasing. India can also help in introduction of good management practices in agri sector," he added.

Besides, he said Africa offers huge scope in contract farming.

"India can harness the vast potential of natural resources of Africa and help Africa to fight food insecurity," he said.

Indian companies such as Indorama Eleme Petrochemicals Ltd have already firmed up plans to set up fertiliser units in African nations.

India is also in talks with resource-rich Algeria to manufacture of nitrogenous fertilisers.

In 2010, India and Ghana had signed the Memorandum of Understanding to set up the urea plant with initial capacity of 1.2 million tonne per annum at Shama district in western Ghana.

Bangladesh tenders to import 50,000 T of wheat

Sun Oct 6, 2013
Oct 6 (Reuters) - Bangladesh's state grains buyer issued an international tender on Sunday to import 50,000 tonnes of wheat, the seventh for the financial year that began in July, as the South Asian nation looks to replenish reserves.

The imports are part of a plan by the Directorate General of Food to ship in 850,000 tonnes of wheat in the current financial year, up from around 350,000 tonnes a year ago.

The deadline to submit offers is Oct. 27, with validity up to Nov. 5, and the wheat is to be shipped within 40 days of signing the contract, Mohammad Badrul Hasan, procurement director at the state grains agency said on Sunday.

The state grains buyer is buying a total of 150,000 tonnes of wheat at $289.86, $282.66 and $288.26 a tonne CIF liner out in three previous tender from a Ismail Food Products as the domestic trader came in first with the lowest offers.

Two more tenders are in the process, with one due to open on Oct. 8 and another on Oct. 22, as the state buyer seeks to secure supplies amid a drop in government reserves, which have fallen to around 1 million tonnes now from 1.4 million tonnes a year earlier.

The state grains buyer cancelled its third tender, citing higher prices.

Bangladesh's government is buying 200,000 tonnes of wheat from Ukraine at $307 a tonne CIF liner out.

The state agency could not achieve last financial year's import target of 800,000 tonnes mainly because of supply failure by traders.

That has prompted it to introduce tougher delivery rules to ensure supplies are delivered on time by the winning bidder.

Apart from the government, private traders also import about 2.5 million tonnes of wheat a year to help meet local demand of 4 million tonnes. Domestic output amounts to about 1 million tonnes.

Wheat consumption is rising in Bangladesh in line with steady economic growth and changes in lifestyle, though rice remains the staple food for its 160 million people.

($1 = 77.6550 Bangladesh taka) (Reporting by Ruma Paul, editing by William Hardy)

GRAINS-Wheat near 3-1/2 month high on supply concerns, soy firm

Mon Oct 7, 2013
* U.S. wheat rises for nine out of 11 sessions

* Production concerns in top suppliers support wheat

* Soybeans up as Informa cuts U.S. output forecast
By Naveen Thukral
SINGAPORE, Oct 7 (Reuters) - U.S. wheat edged higher on Monday, rising for nine out of 11 sessions and trading near a 3-1/2 month high on concerns over weather damaging crops in key
producing countries.

Soybeans climbed 0.4 percent, gaining from last week's 19-month low after a forecast showed lower U.S. production, while corn ticked down on seasonal harvest pressure.

"We are seeing strong export demand for U.S. wheat and production in Ukraine is likely to be hit because of adverse weather, so you are going to see less supplies," said Vanessa
Tan, an investment analyst at Phillip Futures Singapore.

Chicago Board of Trade front-month wheat had risen 0.3 percent to $6.88-3/4 a bushel by 0243 GMT, trading near Thursday's highest since June 21.

Ukraine's wheat harvest could be down by a third to about 15 million tonnes in 2014 from around 22 million tonnes this year because heavy rains will cut the sowing area, the agriculture
minister said on Friday.

Rains earlier this year damaged the wheat crop in top grower China, while frost hampered wheat in Argentina and Brazil. All this led to increased demand for exports from the United States
and Canada.

This year's Canadian wheat crop will be the largest ever, but the estimate of 33.026 million tonnes was within analysts' expectations, according to data released by Statistics Canada.

STORM BREWING

Soybeans for delivery in November added 0.4 percent to $13.00-1/2 a bushel and December corn eased 0.1 percent to $4.42-3/4 a bushel.

"There are forecasts of a storm later this week which could slow the U.S. soybean and corn harvest and we saw Informa lower its estimates for the U.S. soybean crop," said Tan.

Private analytics firm Informa Economics lowered its estimate of U.S. 2013 soybean yield and production while raising its corn crop estimates.

The firm, in its monthly U.S. and world crop reports issued on Friday, projected U.S. 2013 soybean production at 3.176 billion bushels, with a yield of 41.7 bushels per acre (bpa).

The figures are below Informa's Sept. 20 estimates for a 3.224 billion bushel crop with a yield of 42.4 bpa.

Informa raised its corn yield estimate to 158.8 bpa from 157.6, and increased its production forecast to 14.010 billion bushels from 13.889 billion.

Wet weather and another storm system later this week will slow harvesting of the 2013 U.S. corn and soybean crops, an agricultural meteorologist said.

The ongoing shutdown of the U.S. government - including the Department of Agriculture - is likely to delay the release of the U.S. harvest report on Monday and the agency's monthly
supply and demand report due in a week.

There was additional support for soybeans with lack of rainfall delaying soy planting in Brazil.

Soy planting in Mato Grosso, Brazil's top soy state, is 7.2 percentage points behind the same time a year ago because of too little rain, the state's farm research institute IMEA said.

Just 1.4 percent of the expected crop has been sown, compared with 8.6 percent on Oct. 4, 2012, IMEA said in a weekly report.

Commodity funds bought a net 5,000 CBOT corn contracts on Friday, trade sources said. They purchased 6,000 soybean contracts and sold 2,000 wheat.

  Prices at 0243 GMT
  Contract        Last    Change  Pct chg  MA 30   RSI
  CBOT wheat     688.75     1.75  +0.25%   867.37   72
  CBOT corn      442.75    -0.50  -0.11%   756.67   34
  CBOT soy      1300.50     5.50  +0.42%   1573.89   45
  CBOT rice      $14.97    $0.10  +0.64%   $15.47   30
  WTI crude     $103.35   -$0.49  -0.47%   $89.43   45
  Currencies                                               
  Euro/dlr       $1.357   $0.128
  USD/AUD         0.942   -0.113
  Most active contracts
  Wheat, corn and soy US cents/bushel. Rice: USD per hundredweight
  RSI 14, exponential

(Reporting by Naveen Thukral; Editing by Joseph Radford)

Soybeans Rise to One-Week High as Rains Seen Slowing Harvesting

By Supunnabul Suwannakij - Oct 7, 2013
Bloomberg
Soybeans advanced to a one-week high, rising for a fourth day, on speculation that rain in the U.S. will delay harvesting in the world’s largest producer.

Soybeans for November delivery rose as much as 0.8 percent to $13.05 a bushel on the Chicago Board of Trade, and traded at $13.005 at 9:56 a.m. in Singapore. A fourth day of gains would be the best run since the period to Aug. 15.

Rain in the east of the U.S. over the weekend may be disruptive to harvesting, forecaster DTN said on Oct. 4. Areas in the north-central region may be affected by rain later this week, DTN said. Soybean futures dropped 7.7 percent this year.

“For soybeans, gains can be attributed to unfavorable harvesting weather,” Vanessa Tan, an analyst at Phillip Futures Pte, said by e-mail. Storms forecast for later this week will slow down the harvesting, supporting prices, she said.

Informa Economics Inc., based in Memphis, Tennessee, cut its forecast on Oct. 4 for the harvest by 1.5 percent to 3.176 billion bushels from a Sept. 20 estimate, partly as crop conditions fell. The harvest was 11 percent completed as of Sept. 29, trailing the five-year average, government data showed.

Wheat for December delivery climbed 0.3 percent to $6.8875 a bushel. The grain rose for a third week last week as excess rain reduced winter-crop planting in Ukraine and Russia
Corn for December delivery was little changed at $4.4275 a bushel after touching $4.35 last week, the lowest intraday price since August 2010.

Global corn and soybeans inventories before next year’s Northern Hemisphere harvests probably will be larger than the U.S. government predicted last month, while wheat reserves may fall, a Bloomberg survey of as many as 17 analysts and trading firms showed.

The USDA’s scheduled monthly update on Oct. 11 for domestic and global estimates of supply and demand may be delayed by an extended shutdown of the federal government. The agency has suspended daily reports.

Sugar mills sitting on huge inventory of 8.5 mn tonnes: ISMA

PTI
NEW DELHI, OCT 6: 
Sugar mills have begun the 2013-14 marketing year, that started this month, with an opening stock of 8.5 million tonnes and this huge inventory could spell trouble for the sector, according to industry body ISMA.

In 2012-13 marketing year (October-September), mills had an opening stock of 6.2 million tonnes, sufficient to meet three months’ demand.

“We have the opening stock of sugar of about 8.5 million tonnes, higher than last year. The production estimate for 2013-14 is also more than the demand,” Indian Sugar Mills Association (ISMA) Director General Abinash Verma said.

“It will be a difficult situation for the industry unless there is support from the state, central governments and rationalisation of sugarcane pricing,” he added.

Ex-factory prices of sugar are currently lower than the last year’s level, he said, adding that banks are reluctant to give loans to Uttar Pradesh-based mills unless there is linkage between cane and sugar prices.

Verma feared that sugarcane arrears to farmers will increase substantially from the current outstanding of about Rs 3,000 crore in the absence of government support. Maximum arrears pertain to Uttar Pradesh, the second biggest sugar producing state in the country.

ISMA has pegged sugar production in 2013-14 at 25 million tonnes as against the annual demand of 23.5 million tonnes. With likely surplus production this year, mills will have to focus on exports, said Verma.

Asked about crushing operation, Verma said mills in Uttar Pradesh will start after the announcement of state advisory price (SAP) for this year.

In Maharashtra, the country’s largest sugar producing state, mills are expected to begin crushing operations by the end of this month.

The Centre has fixed a fair and remunerative price of sugarcane at Rs 210 per quintal for 2013-14 marketing year.

Last year, the country produced 25.1 million tonnes of sugar and imported 0.75 million tonnes, taking the total availability of sweetener to 25.85 million tonnes. The demand was about 23 million tonnes and exports were 0.35 million tonnes.

Lukewarm response to wheat export tenders

By Madhvi Sally, ET Bureau | 4 Oct, 2013
NEW DELHI: The State-run trading companies such as MMTC, State Trading Corp (STC)and PEC, which have been exporting wheat from government warehouses, have got lukewarm response to tender floated for export of 1.60 lakh tonnes government wheat. With global prices weak, all bids received have been below the export floor price of $300 a tonne set by the government

According to government officials, STC which had come up with tender to offload 60,000 tonnes wheat from the Mundra got the highest bid from Singapore based trading company, Concordia which quoted $267 a tonne. Delhi headquartered Emmsons bid at $261.08 a tonne and Cargill at $253.00 a tonne.

The bids are invalid as the quotes were below the floor price of $300 a tonne set by the government.

With huge wheat stock in the central pool, the government has allowed export of 2 million tonnes wheat.As per the latest data, on September 16 the total grain stock with the central agency was 57.22 million tonnes. Wheat accounted to 37.48 million tonnes and rice at 19.74 million tonnes.

Also, the tender floated by MMTC to export 60,000 tonnes wheat got unsuccessful bids from Canada based Agrocorp at $261.25 a tonnes and Singapore based Starcom at $250 a tonne. The shipment was to go from the Kakinada port.

A similar fate was for PEC tender, which was for 40,000 tonnes wheat from the Kandla port. PEC received three bids from Singapore based Starcom at $248 a tonne, Emmsons at $260.08 a tonnes and Cargill at $253.00 a tonnes.

Monday 30 September 2013

Shanghai rebar holds near 12-week low ahead of China holiday

Mon Sep 30, 2013
* China final PMI slips to 50.2 from initial 51.2

* Macquarie lifits Q4 iron ore forecast to $138 from $125

* India to keep 30 pct tax on iron ore exports
By Manolo Serapio Jr
SINGAPORE, Sept 30 (Reuters) - Shanghai steel futures hovered near their lowest level since early July on Monday, pressured by slow demand ahead of a week-long holiday in top
consumer China that has thinned trading volumes.

The price of Shanghai rebar is set for its first decline in four months as supply outpaced growth in demand, curbing appetite for raw material iron ore which is also set to end
September weaker after a three-month upturn.

The most-traded rebar contract for January delivery on the Shanghai Futures Exchange was little changed at 3,584 yuan ($590) a tonne by the midday break. The contract touched
3,570 yuan on Friday, its lowest since July 3.

For the month, rebar has lost 4.5 percent so far after gaining in June to August.

Data released on Monday showed the final reading of HSBC's China Purchasing Managers' Index for September slipping to 50.2 from last week's preliminary 51.2 suggesting that a firm rebound
for Asia's economic powerhouse remains elusive.

China's daily crude steel output remained near this year's highs above 2.1 million tonnes in early to mid-September even as demand growth failed to keep pace, lifting stockpiles of the raw
material and weighing on prices.

Increased supply of iron ore in the spot market has also dragged down prices of the raw material, which has fallen more than 4 percent so far this month.

Benchmark 62-percent grade iron ore .IO62-CNI=SI dropped 1.4 percent to $131.90 a tonne on Friday, its cheapest since Sept. 20. Trading is likely to be limited this week with Chinese
markets shut for the Oct. 1-7 National Day holiday.

"I'm not receiving enquiries in the market today so far. I think most people are preparing for the holidays and any recent replenishment of stocks has been sufficient," said a Hong
Kong-based iron ore trader.

Iron ore swaps may also come under pressure amid broad-based weakness in industrial commodities and equities fueled by concerns over a looming shutdown of the U.S. government as lawmakers struggled to pass an emergency spending bill.

Despite this month's decline, iron ore prices have risen 13.2 percent for the third quarter ending on Monday and investment bank Macquarie sees the gains being sustained.

Macquarie raised its iron ore price forecast for the fourth quarter to $138 from $125 on optimism that a reform-focused dicussion at China's Congress in November would spur a
restocking cycle that could absorb an expected increase in seaborne supplies.

"While the near term is likely to see the spot iron ore price drifting in line with steel prices, given mills' adequate stock position, positive sentiment emanating from the Chinese
Congress brings the risk of an aggressive restock into year-end," Macquarie said in a note.

Indian supplies are also unlikely to improve any time soon with the government seen keeping a 30 percent tax on exports. India's finance minister said on Friday there was no case to
reduce the tax, a reversal of the government's earlier stance.

  Shanghai rebar futures and iron ore indexes at 0417 GMT

  Contract                          Last    Change   Pct Change
  SHFE REBAR JAN4                   3584     -2.00        -0.06
  THE STEEL INDEX 62 PCT INDEX     131.9     -1.90        -1.42
  METAL BULLETIN INDEX            132.07     -3.29        -2.43

  Rebar in yuan/tonne
  Index in dollars/tonne, show close for the previous trading day
 ($1 = 6.1202 Chinese yuan)

(Reporting by Manolo Serapio Jr.; Editing by Richard Pullin)

Shanghai rebar holds near 12-week low ahead of China holiday

Mon Sep 30, 2013
* China final PMI slips to 50.2 from initial 51.2

* Macquarie lifits Q4 iron ore forecast to $138 from $125

* India to keep 30 pct tax on iron ore exports
By Manolo Serapio Jr
SINGAPORE, Sept 30 (Reuters) - Shanghai steel futures hovered near their lowest level since early July on Monday, pressured by slow demand ahead of a week-long holiday in top
consumer China that has thinned trading volumes.

The price of Shanghai rebar is set for its first decline in four months as supply outpaced growth in demand, curbing appetite for raw material iron ore which is also set to end
September weaker after a three-month upturn.

The most-traded rebar contract for January delivery on the Shanghai Futures Exchange was little changed at 3,584 yuan ($590) a tonne by the midday break. The contract touched
3,570 yuan on Friday, its lowest since July 3.

For the month, rebar has lost 4.5 percent so far after gaining in June to August.

Data released on Monday showed the final reading of HSBC's China Purchasing Managers' Index for September slipping to 50.2 from last week's preliminary 51.2 suggesting that a firm rebound
for Asia's economic powerhouse remains elusive.

China's daily crude steel output remained near this year's highs above 2.1 million tonnes in early to mid-September even as demand growth failed to keep pace, lifting stockpiles of the raw
material and weighing on prices.

Increased supply of iron ore in the spot market has also dragged down prices of the raw material, which has fallen more than 4 percent so far this month.

Benchmark 62-percent grade iron ore .IO62-CNI=SI dropped 1.4 percent to $131.90 a tonne on Friday, its cheapest since Sept. 20. Trading is likely to be limited this week with Chinese
markets shut for the Oct. 1-7 National Day holiday.

"I'm not receiving enquiries in the market today so far. I think most people are preparing for the holidays and any recent replenishment of stocks has been sufficient," said a Hong
Kong-based iron ore trader.

Iron ore swaps may also come under pressure amid broad-based weakness in industrial commodities and equities fueled by concerns over a looming shutdown of the U.S. government as lawmakers struggled to pass an emergency spending bill.

Despite this month's decline, iron ore prices have risen 13.2 percent for the third quarter ending on Monday and investment bank Macquarie sees the gains being sustained.

Macquarie raised its iron ore price forecast for the fourth quarter to $138 from $125 on optimism that a reform-focused dicussion at China's Congress in November would spur a
restocking cycle that could absorb an expected increase in seaborne supplies.

"While the near term is likely to see the spot iron ore price drifting in line with steel prices, given mills' adequate stock position, positive sentiment emanating from the Chinese
Congress brings the risk of an aggressive restock into year-end," Macquarie said in a note.

Indian supplies are also unlikely to improve any time soon with the government seen keeping a 30 percent tax on exports. India's finance minister said on Friday there was no case to
reduce the tax, a reversal of the government's earlier stance.

  Shanghai rebar futures and iron ore indexes at 0417 GMT

  Contract                          Last    Change   Pct Change
  SHFE REBAR JAN4                   3584     -2.00        -0.06
  THE STEEL INDEX 62 PCT INDEX     131.9     -1.90        -1.42
  METAL BULLETIN INDEX            132.07     -3.29        -2.43

  Rebar in yuan/tonne
  Index in dollars/tonne, show close for the previous trading day
 ($1 = 6.1202 Chinese yuan)

(Reporting by Manolo Serapio Jr.; Editing by Richard Pullin)

China's CITIC says close to Australia iron ore production start

Mon Sep 30, 2013
* CITIC says project moving into production phase

* Development is billions of dollars over budget, 4 yrs behind schedule

* Has been marred by legal disputes
SYDNEY, Sept 30 (Reuters) - China's CITIC Pacific said it was moving into the initial production phase at its $8 billion iron ore project in Australia, following years of delays at one of China's costliest offshore mining developments.

Already some four years behind schedule and billions of dollars over budget, commissioning of the first of the project's two production lines has been going on since July, CITIC said in an e-mailed statement.

"We are now moving into the production stage," it said.

The project, one of the largest of its kind undertaken by a Chinese entity outside China, has been marred by legal disputes. It has yet to generate any returns six years after CITIC Pacific bought the rights from Australian tycoon Clive Palmer, prompting Beijing to take a much more cautious approach to approving foreign mining investments.

CITIC last month said the focus over the next six months would be to ensure the stable running of the first production line and ramping it up to full capacity.

CITIC Pacific, controlled by state-owned CITIC Group , had hoped to begin exporting iron ore in May. But problems at its grinding mill, a component in the production of the type of magnetite found in the far west Australian deposits mined by the company, forced it to delay.

The development aims to produce up to 24 million tonnes of iron ore concentrate annually. The material will be used by CITIC Pacific's own steel plants and also sold to other steel producers in China.

The cost of the project has swelled to almost $8 billion from $2.5 billion.

(Reporting by James Regan; Editing by Joseph Radford)

Soybeans Drop as U.S. Shutdown Risk May Threaten Checks on Crops

By Supunnabul Suwannakij - Sep 30, 2013
Bloomberg
Soybeans dropped, paring the first quarterly advance in a year, on concern that a possible U.S. government shutdown may disrupt crop inspections, while favorable weather boosted harvest prospects. Corn and wheat fell.

Soybeans for delivery in November declined as much as 0.8 percent to $13.09 a bushel on the Chicago Board of Trade and traded at $13.1075 at 11:29 a.m. in Singapore. Prices advanced 4.7 percent since the end of June.

The U.S. government faces a risk of the first shutdown in 17 years from tomorrow because of a budget impasse, and unless differences are resolved as many as 800,000 federal employees will be on furlough. Light to moderate rain was seen in the western Midwest through the southeastern Plains on Sept. 28, with a drier trend elsewhere, DTN said in a Sept. 27 forecast.

“Traders may be cautious about trading right now because there is no certainty whether grains inspection will continue at the same rate,” said Joyce Liu, an analyst at Phillip Futures Pte in Singapore, referring to the U.S. Department of Agriculture. The favorable weather in the U.S. will help with rapid harvesting, she said.

Corn for delivery in December dropped 0.2 percent to $4.53 a bushel in Chicago. Prices lost 11 percent since the end of June, heading for a fourth straight quarterly retreat that would be the longest slump since 2009.

Wheat for delivery in December fell 0.3 percent to $6.8125 a bushel in Chicago. Prices gained 3.6 percent since the end of June, poised to snap three straight quarterly losses.

GRAINS-Wheat falls, set for first quarterly gain in a year

Mon Sep 30, 2013
SYDNEY, Sept 30 (Reuters) - U.S. wheat fell for the first time in six sessions on Monday amid a broad-based commodity sell-off but is poised to record its first quarterly rise in a
year, buoyed by strong export demand from China and Brazil.

FUNDAMENTALS

* Front month Chicago Board Of Trade wheat is up nearly 6 percent for the month, the biggest jump since July, 2012.

* Wheat poised to finish the quarter up nearly 5.1 percent, the first quarterly gain for a year.

* Front-month soybeans down more 16 percent for the quarter, the worst performing period in three years.

* Beans down 8 percent for the month, having firmed 3.6 percent in August.

* Spot corn is down more than 33 percent for the quarter, the worst quarter since September 1996 as an expected bumper U.S. crop weighed on prices.

* The U.S. Department of Agriculture said private exporters reported sales of 121,600 tonnes of U.S. wheat to unknown destinations.

* Brazilian millers are looking at Polish wheat as a cheaper alternative to North American supply, milling group Pacifico said Thursday.

* Soybeans under pressure ahead of the USDA's stocks report latert this week, which is expected to show Sept. 1 U.S. soybean inventories at a nine-year low.

MARKET NEWS

*  The euro fell hard in Asia on Monday with Italy in the grip of a fresh political crisis, while investors also sold the greenback as a midnight deadline to avert a shutdown in
Washington loomed large.

  Grains prices at  0035 GMT
  Contract        Last    Change  Pct chg  Two-day chg MA 30   RSI
  CBOT wheat     681.25    -1.75  -0.26%    +0.44%     653.47   75
  CBOT corn      453.25    -0.75  -0.17%    -0.77%     467.07   41
  CBOT soy      1311.25    -8.50  -0.64%    -0.42%    1342.53   37
  CBOT rice      $15.40   -$0.01  -0.03%    +0.49%     $15.52   42
  WTI crude     $101.60   -$1.27  -1.23%    -1.39%    $106.43   29
  Currencies                                               
  Euro/dlr       $1.349  -$0.003  -0.20%    +0.04%
  USD/AUD         0.929   -0.003  -0.30%    -0.78%
  Most active contracts
  Wheat, corn and soy US cents/bushel. Rice: USD per hundredweight
  RSI 14, exponential

(Reporting by Colin Packham; Editing by Richard Pullin)