Wednesday, 23 December 2015

Mid-week Black Sea agri-news

Goldman Sachs are forecasting a rise in ag commodity prices as signalled by the Arctic and North Atlantic oscillations bringing colder weather to Europe from January.

They go on to report the current mild winter conditions "are not forecast to last beyond end-2015" and the lack of snow cover and limited hibernation of autumn-sown crops, has raised concerns over hardiness.

Fair point and far be it from me to pick holes in the first bullish news in a long time but winter wheat is much tougher than people think; you really have to see prolonged periods of very cold weather with no snow cover before you see significant, above normal, crop death.

Although I do think this is more likely to be an issue in Ukraine where we are seeing small and physiologically young plants across large parts of the south and east regions coupled with limited snow cover.

From 1 January 2016 Russia will ban import of certain agricultural products and food from Ukraine in response to the free trade agreement between Ukraine and the EU, also due to come into effect from 1 January 2016.

Ukraine’s minister of agriculture has said that this will have a catastrophic impact on the agricultural sector of Ukraine.

In response, Ukraine’s ag minister is trying to drum up business with this week’s official state visit taking place in Israel where he is interested in opening a free trade zone.

Russia’s ministry of agriculture report that due to the implementation of the "anti-crisis plan," the Government of the Russian Federation has helped to keep growth in agricultural production in 2015, with preliminary data indicating a 3% increase in the total volume of agricultural production.

Russia is reported to be making noises about reducing or scrapping the current wheat export tax, possibly a signal that the ministry of agriculture is feeling positive about 2016 harvest which they called this week at 104mmt, up slightly on 2015 103.4mmt.