GLOBAL MARKETS-Stocks slide as Fed's "Twist" fails to stir buyers
SINGAPORE, Sept 22 (Reuters) - Asian stocks fell on Thursday, following a slide on Wall Street, as investors took fright at a warning from the Federal Reserve that the United States faced a grim economic outlook with "significant downside risks".
The dollar gained on the prospect of higher short-term interest rates after the Fed said it would sell $400 billion of short-term Treasury bonds to buy longer-dated debt in a widely predicted move known as "Operation Twist", aimed at stimulating the economy by forcing down long-term borrowing costs.
Dollar Gains Most in Two Weeks Versus Yen on Fed Bond Plan; Aussie Slides (Bloomberg)
The dollar rose the most in two weeks against the yen after the Federal Reserve acted to lower only long-term borrowing costs and on concern the Bank of Japan may act to stem gains in the nation’s currency. The Dollar Index rose to a seven-month high after the Federal Open Market Committee said it will shift Treasury holdings to longer-term securities. The 17-nation euro rallied versus the yen as Greece said it will accelerate budget cuts to keep emergency loans flowing. New Zealand’s dollar fell to a four-month low after data showed economic growth almost stalled. Australia’s dollar sank below parity with the greenback after a survey said China’s manufacturing may slow. “The reaction to the FOMC was risk off as the Fed was very pessimistic about the U.S. economy, and that’s pushed down riskier assets in general,” said Masafumi Yamamoto, chief currency strategist at Barclays Bank Plc in Tokyo. “Dollar strength across the board pushed up dollar-yen as well.”
Japanese Stocks Decline on Growing Signs of Banking System Instability (Bloomberg)
Japanese stocks fell amid signs of growing instability in the global financial system after the Federal Reserve said there are “significant downside risks” to the U.S. growth outlook and Europe’s risk watchdog said threats to the region’s banks have increased “considerably.” Mitsubishi UFJ Financial Group Inc. (8306) led declines among Japan’s biggest lenders on growing international turmoil and after BNP Paribas SA said the country’s banking industry is “deteriorating.” Honda Motor Co., Japan’s second-largest carmaker, slid 4.1 percent. Softbank Corp. (9984) plunged 11 percent after a report the carrier will lose its position as the exclusive provider of Apple Inc.’s iPhone in Japan.
The Nikkei 225 (NKY) Stock Average lost 1.6 percent to 8,598.32 at the 11 a.m. trading break in Tokyo after investors were disappointed by a Fed plan to support growth in the world’s biggest economy by buying $400 billion of longer-term debt. The broader Topix index dropped 1.7 percent to 744.48. Japan’s stock market will be closed tomorrow for a public holiday.
Fed Will Lengthen Maturity of Securities (Bloomberg)
The Federal Reserve will replace $400 billion of short-term debt in its portfolio with longer- term Treasuries in an effort to reduce borrowing costs further and counter rising risks of a recession. The central bank will buy securities with maturities of six to 30 years through June while selling an equal amount of debt maturing in three years or less, the Federal Open Market Committee said today in Washington after a two-day meeting. The action “should put downward pressure on longer-term interest rates and help make broader financial conditions more accommodative,” the FOMC said. Chairman Ben S. Bernanke expanded use of unconventional monetary tools for a second straight meeting after job gains stalled and the government lowered its estimate of second- quarter growth. Yields on 30-year Treasuries fell below 3 percent for the first time since 2009 and U.S. stocks had their biggest drop in a month on the Fed’s plan, dubbed “Operation Twist” after a similar Fed action in 1961.
Brent crude falls more than $1 on grim econ outlook
SINGAPORE, Sept 22 (Reuters) - Brent crude futures fell more than $1 on concern that measures announced by the U.S. Federal Reserve may not be enough to jump-start an
economy the bank said faces significant downside risks.
"The sell-off appears to be the unwinding of positioning ahead of an anticipated announcement of further liquidity addition, despite clear signalling from the Fed that conditions are not right for this kind of stimulus," Michael McCarthy, chief market strategist at CMC markets, said in a report.
NYMEX-Natural gas down midday after early contract low
NEW YORK, Sept 21 (Reuters) - U.S. natural gas futures remained lower midday Wednesday, with the front-month October contract again pressured to a new contract low and 6-1/2 month low by milder autumn weather that has slowed overall demand.
"We hit a new low today which is not a good sign. (Milder) weather has come into play, and we keep adding (gas drilling) rigs which is not supportive," a Houston-based trader said.
COMMODITIES-Futures fall broadly after Fed fails to reassure
NEW YORK, Sept 21 (Reuters) - Commodities tumbled on Wednesday after the U.S. Federal Reserve's widely expected plan to buy $400 billion in long-term debt failed to convince investors that "operation twist" would be enough to revive growth.
"People were expecting there was going to be some form of stimulus that would engender some kind of growth," said Jason Schenker, president of Prestige Economics in Austin, Texas.
Thursday, September 22, 2011
20110922 0942 Global Economic Related News.
China: China may overtake US as Pakistan’s top provider of FDI
China may overtake the U.S. as the biggest foreign direct investor in Pakistan in the next five years, said Saleem H. Mandviwalla, the chairman of the South Asian nation’s Board of Investment. Pakistan’s relations with the U.S. have frayed since Navy Seals killed Osama bin Laden near Islamabad in May in a unilateral raid. China has emerged as a key ally, Mandviwalla said, as the government strives to overcome declining overseas investment and terrorism that have hobbled growth. (Bloomberg)
New Zealand: New Zealand economic growth slowed to 0.1% in second quarter
New Zealand’s economic growth almost stalled in the second quarter, adding to the case for central bank Governor Alan Bollard to hold interest rates at a record low until next year. Gross domestic product rose 0.1 percent in the three months ended June 30 from the previous quarter, when it increased a revised 0.9 percent, Statistics New Zealand said in a report released today in Wellington. Growth was less than the 0.5 percent median expectation in a Bloomberg News survey of 15 economists. (Bloomberg)
Gold: Surge vexes Asian officials as inflation numbers sent awry
The surging price of gold is fueling inflation from India to Indonesia and forcing statisticians to decide whether jewelry made of the metal still belongs in consumer-price indexes. Gold has climbed 27 percent this year as turbulence in equities and currencies, money printing by central banks, and a decade-long bull market in the metal lure investors to an alternative store of value. Bullion vaults such as the Swiss Precious Metals facility in Singapore are nearing capacity, and Tiberius Asset Management AG warns that gold is in the final, overheated phase of an upswing. (Bloomberg)
US: Fed will shift treasury holdings to longer-term securities
Federal Reserve policy makers will replace much of the short-term debt in their portfolio with longer-term Treasuries in an effort to further reduce borrowing costs and keep the economy from relapsing into a recession. The central bank will buy $400 billion of bonds with maturities of six to 30 years through June while selling an equal amount of debt maturing in three years or less, the Federal Open Market Committee said today in Washington after a two-day meeting. (Bloomberg)
US stocks fall as Fed plans bond purchases, sees economic risk
US stocks slumped, giving the S&P’s 500 Index its biggest decline in a month, as the Federal Reserve announced plans to buy USD400bn of long- term debt and cited risks to the economic outlook. Caterpillar Inc. and Dow Chemical Co. fell more than 5.1%, pacing losses among companies most-tied to the economy. Financial shares in the S&P 500 slid 4.9% as a group, to a two-year low, as Moody’s Investors Service cut its ratings on Bank of America, Citigroup and Wells Fargo & Co. The Dow Jones Transportation Average slid 5.3% as railroad shares tumbled after two coal companies cut their forecasts. The benchmark gauge for American equities has dropped 4.1% in three days. The Dow Jones Industrial Average lost 283.82 points to 11,124.84.. (Bloomberg)
Greece: Greece accelerates cuts to wages, pensions to ensure aid payment
Greek Prime Minister George Papandreou’s government said it will accelerate budget cuts, targeting civil servants’ wages and pensioners to keep emergency loans flowing and avoid default. Measures announced yesterday following two rounds of talks with the European Union and the International Monetary Fund include: a 20 percent cut in pensions of more than 1,200 euros ($1,650) a month, according to a government statement; pensions paid to those younger than 55 will be shaved by 40 percent for the amount exceeding 1,000 euros and wages will be lowered for 30,000 state employees. (Bloomberg)
China may overtake the U.S. as the biggest foreign direct investor in Pakistan in the next five years, said Saleem H. Mandviwalla, the chairman of the South Asian nation’s Board of Investment. Pakistan’s relations with the U.S. have frayed since Navy Seals killed Osama bin Laden near Islamabad in May in a unilateral raid. China has emerged as a key ally, Mandviwalla said, as the government strives to overcome declining overseas investment and terrorism that have hobbled growth. (Bloomberg)
New Zealand: New Zealand economic growth slowed to 0.1% in second quarter
New Zealand’s economic growth almost stalled in the second quarter, adding to the case for central bank Governor Alan Bollard to hold interest rates at a record low until next year. Gross domestic product rose 0.1 percent in the three months ended June 30 from the previous quarter, when it increased a revised 0.9 percent, Statistics New Zealand said in a report released today in Wellington. Growth was less than the 0.5 percent median expectation in a Bloomberg News survey of 15 economists. (Bloomberg)
Gold: Surge vexes Asian officials as inflation numbers sent awry
The surging price of gold is fueling inflation from India to Indonesia and forcing statisticians to decide whether jewelry made of the metal still belongs in consumer-price indexes. Gold has climbed 27 percent this year as turbulence in equities and currencies, money printing by central banks, and a decade-long bull market in the metal lure investors to an alternative store of value. Bullion vaults such as the Swiss Precious Metals facility in Singapore are nearing capacity, and Tiberius Asset Management AG warns that gold is in the final, overheated phase of an upswing. (Bloomberg)
US: Fed will shift treasury holdings to longer-term securities
Federal Reserve policy makers will replace much of the short-term debt in their portfolio with longer-term Treasuries in an effort to further reduce borrowing costs and keep the economy from relapsing into a recession. The central bank will buy $400 billion of bonds with maturities of six to 30 years through June while selling an equal amount of debt maturing in three years or less, the Federal Open Market Committee said today in Washington after a two-day meeting. (Bloomberg)
US stocks fall as Fed plans bond purchases, sees economic risk
US stocks slumped, giving the S&P’s 500 Index its biggest decline in a month, as the Federal Reserve announced plans to buy USD400bn of long- term debt and cited risks to the economic outlook. Caterpillar Inc. and Dow Chemical Co. fell more than 5.1%, pacing losses among companies most-tied to the economy. Financial shares in the S&P 500 slid 4.9% as a group, to a two-year low, as Moody’s Investors Service cut its ratings on Bank of America, Citigroup and Wells Fargo & Co. The Dow Jones Transportation Average slid 5.3% as railroad shares tumbled after two coal companies cut their forecasts. The benchmark gauge for American equities has dropped 4.1% in three days. The Dow Jones Industrial Average lost 283.82 points to 11,124.84.. (Bloomberg)
Greece: Greece accelerates cuts to wages, pensions to ensure aid payment
Greek Prime Minister George Papandreou’s government said it will accelerate budget cuts, targeting civil servants’ wages and pensioners to keep emergency loans flowing and avoid default. Measures announced yesterday following two rounds of talks with the European Union and the International Monetary Fund include: a 20 percent cut in pensions of more than 1,200 euros ($1,650) a month, according to a government statement; pensions paid to those younger than 55 will be shaved by 40 percent for the amount exceeding 1,000 euros and wages will be lowered for 30,000 state employees. (Bloomberg)
20110922 0939 Malaysia Corporate Related News.
Berjaya Sports Toto Bhd : Net profit jumps 44.0%
Berjaya Sports Toto Bhd (BToto) posted a 44.0% increase in net profit for its 1QFY12 ending July 31 to RM92.1mil from RM64.0mil a year ago. Revenue increased marginally by 1.3% to RM845.8mil from RM835.4mil last year. Earnings per share for the quarter were 6.89 sen compared with 4.78 sen last year. In notes accompanying its financials, BToto said the increase in net profit was driven by higher pre-tax contributions from its foreign unit Berjaya Philippines Inc and principal subsidiary Sports Toto (M) Sdn Bhd. In terms of operational performance, Sports Toto, the group’s principal operating subsidiary, recorded a year-on-year increase in revenue and pre-tax profit of 0.3% and 14.1% respectively in 1Q, despite having fewer number draws in 1Q. BToto attributed the increase in pre-tax profit to a lower prize payout in 1Q. For 1Q, BToto declared its first interim single-tier exempt dividend of 8 sen per share. The entitlement date for the dividend has been fixed for Oct 10.
The first interim dividend amounts to about RM107.0mil, representing 116.2% of the group’s net profit. – The Edge
Malaysia Marine bids for jobs worth RM6bn
Malaysia Marine and Heavy Engineering (MHB), an indirect subsidiary of Petronas, has submitted bids worth between RM5 and RM6bn, says chairman Datuk Nasarudin Md Idris. "The bids are for engineering, procurement, construction, installation and commissioning and construction projects in the oil and gas industry, mostly in Malaysia," he said. MHB was listed on the Main Market of Bursa Malaysia in October last year. "They are now at various stages of being finalised. We have to replenish our order book and we are looking for more projects," he added. Nasarudin said the company's order book currently stood at about RM3.1bn, which would last until 2013. It is derived from upstream projects ranging from the central processing platform to the floating production system for both domestic and international markets. (Malaysian Reserve)
AZRB to build teaching hospital in Kuantan
Ahmad Zaki Resources (AZRB) has signed a 25-year concession agreement with the government to build a teaching hospital in Kuantan, Pahang. The deal marks the first hospital project to be developed under the government's private finance initiative programme. AZRB's unit Peninsular Medical SB inked the agreement with the Ministry of Higher Education (MOHE) and International Islamic University of Malaysia (IIUM) for the design, build, lease, maintenance and transfer of IIUM Teaching Hospital. "The project valued at RM412.6m will be built in Bandar Indera Mahkota, Kuantan, Pahang. The IIUM Teaching Hospital, with 300 beds for inpatients, has the capacity for 735 students," AZRB's chairman Raja Datuk Seri Aman Raja Haji Ahmad said. (BT)
Foreign suitors for Kurnia Insurans?
There were at least four foreign insurers, including two from the US, are among several parties believed to be close to making a bid for Kurnia Insurans (Malaysia) Bhd, according to industry sources. US-based Liberty International Holdings and Chartis Malaysia Insurance Bhd, whose parent AIG Inc was rescued by the US government in 2008, are believed to be vying for the stake owned by investment holding company, Kurnia Asia Bhd. Another potential suitor for the stake in the largest general insurer in the country is Insurance Australia Group Ltd (IAG), which holds a 49% stake in AmBank Group's general insurance arm, AmG Insurance. AmG Insurance is on the lookout for a sizeable insurer having failed to buy MAA Holdings Bhd's general insurance business arm after protracted negotiations. IAG sees a lot of potential in Malaysia and has intention to up its stake to 70% from 49% currently in AmG Insurance, the third largest motor insurer in the country. (BT)
BRDB eyes more govt jobs
Bandar Raya Developments (BRDB) is looking to participate in more government-linked property developments, as it looks to become a full-fledged property player, said its CEO Datuk Jagan Sabapathy. BRDB has put in a bid to participate in the Rubber Research Institute (RRI) land in Sungai Buloh as well as the Lever Brothers site in Bangsar. It is among parties that have been shortlisted to put in their proposals for the Lever Brothers land. BRDB also aims to deliver property developments worth RM1bn in gross development value (GDV) every year, starting from its year ending 31 Dec 2012. (StarBiz)
Formis gets RM54m job
Formis Resources’s unit has secured a RM53.75m contract from Fibrecomm Network SB for the next generation dense wavelength division multiplexing systems. In an announcement to Bursa, Formis said its unit, Formis Network Services SB, will supply engineering services, operation and maintenance of the NGDWDM systems, spares and accessories for the third route from Padang Besar to Menara Ansar in Johor Bahru for RM47.76m over five years starting 24 Aug 2011. (Financial Daily)
SapuraCrest and Kencana post healthy profits before merger under Integral Key
SapuraCrest and Kencana both posted healthy profit for their respective quarters. The two companies had earlier proposed to merge under a newco called Integral Key Bhd. Sapura posted a net profit of RM78.2m for the 2Q ended 31 July 2011, compared to RM53.3m y-o-y due to higher contribution from its business units in the country and abroad. Kencana on the other hand posted a net profit of RM223m compared to a net profit of RM136.2m y-o-y. Meanwhile, Sapuracrest Petroleum announced to Bursa yesterday to carry out a capital repayment exercise after the sale of all its assets and liabilities to Integral Key. (Malaysian Reserve)
New twist to E&O takeover
In a surprise move, ECM Libra Financial Group has proposed the nomination of two lawyers to Eastern & Oriental’s board. ECM Libra has emerged as a substantial shareholder of E&O in recent months. One of the two lawyers is a director of TA Enterprise. E&O said that on 14 Sept it received a notice of intention to nominate Mahadzir Azizan and Leong Kam Weng to its board. (Financial Daily)
Berjaya Sports Toto Bhd (BToto) posted a 44.0% increase in net profit for its 1QFY12 ending July 31 to RM92.1mil from RM64.0mil a year ago. Revenue increased marginally by 1.3% to RM845.8mil from RM835.4mil last year. Earnings per share for the quarter were 6.89 sen compared with 4.78 sen last year. In notes accompanying its financials, BToto said the increase in net profit was driven by higher pre-tax contributions from its foreign unit Berjaya Philippines Inc and principal subsidiary Sports Toto (M) Sdn Bhd. In terms of operational performance, Sports Toto, the group’s principal operating subsidiary, recorded a year-on-year increase in revenue and pre-tax profit of 0.3% and 14.1% respectively in 1Q, despite having fewer number draws in 1Q. BToto attributed the increase in pre-tax profit to a lower prize payout in 1Q. For 1Q, BToto declared its first interim single-tier exempt dividend of 8 sen per share. The entitlement date for the dividend has been fixed for Oct 10.
The first interim dividend amounts to about RM107.0mil, representing 116.2% of the group’s net profit. – The Edge
Malaysia Marine bids for jobs worth RM6bn
Malaysia Marine and Heavy Engineering (MHB), an indirect subsidiary of Petronas, has submitted bids worth between RM5 and RM6bn, says chairman Datuk Nasarudin Md Idris. "The bids are for engineering, procurement, construction, installation and commissioning and construction projects in the oil and gas industry, mostly in Malaysia," he said. MHB was listed on the Main Market of Bursa Malaysia in October last year. "They are now at various stages of being finalised. We have to replenish our order book and we are looking for more projects," he added. Nasarudin said the company's order book currently stood at about RM3.1bn, which would last until 2013. It is derived from upstream projects ranging from the central processing platform to the floating production system for both domestic and international markets. (Malaysian Reserve)
AZRB to build teaching hospital in Kuantan
Ahmad Zaki Resources (AZRB) has signed a 25-year concession agreement with the government to build a teaching hospital in Kuantan, Pahang. The deal marks the first hospital project to be developed under the government's private finance initiative programme. AZRB's unit Peninsular Medical SB inked the agreement with the Ministry of Higher Education (MOHE) and International Islamic University of Malaysia (IIUM) for the design, build, lease, maintenance and transfer of IIUM Teaching Hospital. "The project valued at RM412.6m will be built in Bandar Indera Mahkota, Kuantan, Pahang. The IIUM Teaching Hospital, with 300 beds for inpatients, has the capacity for 735 students," AZRB's chairman Raja Datuk Seri Aman Raja Haji Ahmad said. (BT)
Foreign suitors for Kurnia Insurans?
There were at least four foreign insurers, including two from the US, are among several parties believed to be close to making a bid for Kurnia Insurans (Malaysia) Bhd, according to industry sources. US-based Liberty International Holdings and Chartis Malaysia Insurance Bhd, whose parent AIG Inc was rescued by the US government in 2008, are believed to be vying for the stake owned by investment holding company, Kurnia Asia Bhd. Another potential suitor for the stake in the largest general insurer in the country is Insurance Australia Group Ltd (IAG), which holds a 49% stake in AmBank Group's general insurance arm, AmG Insurance. AmG Insurance is on the lookout for a sizeable insurer having failed to buy MAA Holdings Bhd's general insurance business arm after protracted negotiations. IAG sees a lot of potential in Malaysia and has intention to up its stake to 70% from 49% currently in AmG Insurance, the third largest motor insurer in the country. (BT)
BRDB eyes more govt jobs
Bandar Raya Developments (BRDB) is looking to participate in more government-linked property developments, as it looks to become a full-fledged property player, said its CEO Datuk Jagan Sabapathy. BRDB has put in a bid to participate in the Rubber Research Institute (RRI) land in Sungai Buloh as well as the Lever Brothers site in Bangsar. It is among parties that have been shortlisted to put in their proposals for the Lever Brothers land. BRDB also aims to deliver property developments worth RM1bn in gross development value (GDV) every year, starting from its year ending 31 Dec 2012. (StarBiz)
Formis gets RM54m job
Formis Resources’s unit has secured a RM53.75m contract from Fibrecomm Network SB for the next generation dense wavelength division multiplexing systems. In an announcement to Bursa, Formis said its unit, Formis Network Services SB, will supply engineering services, operation and maintenance of the NGDWDM systems, spares and accessories for the third route from Padang Besar to Menara Ansar in Johor Bahru for RM47.76m over five years starting 24 Aug 2011. (Financial Daily)
SapuraCrest and Kencana post healthy profits before merger under Integral Key
SapuraCrest and Kencana both posted healthy profit for their respective quarters. The two companies had earlier proposed to merge under a newco called Integral Key Bhd. Sapura posted a net profit of RM78.2m for the 2Q ended 31 July 2011, compared to RM53.3m y-o-y due to higher contribution from its business units in the country and abroad. Kencana on the other hand posted a net profit of RM223m compared to a net profit of RM136.2m y-o-y. Meanwhile, Sapuracrest Petroleum announced to Bursa yesterday to carry out a capital repayment exercise after the sale of all its assets and liabilities to Integral Key. (Malaysian Reserve)
New twist to E&O takeover
In a surprise move, ECM Libra Financial Group has proposed the nomination of two lawyers to Eastern & Oriental’s board. ECM Libra has emerged as a substantial shareholder of E&O in recent months. One of the two lawyers is a director of TA Enterprise. E&O said that on 14 Sept it received a notice of intention to nominate Mahadzir Azizan and Leong Kam Weng to its board. (Financial Daily)
20110922 0932 Renewable Energy Related News.
JAPAN CHUBU LOSES 1,870 MW HYDRO POWER DUE TO TYPHOON
TOKYO, Sept 21 (Reuters) - Chubu Electric Power Co said on Wednesday it has lost about 1,870 megawatts of hydro power output as a very strong typhoon approaches central Japan, but added there are no worries of power shortages.
The company said the hydro plants currently shut due to a rise in water levels include two of its pumped hydro plants, the 780-MW Okuyahagi No.2 unit and the 315-MW Okuyahagi No.1 unit.
GAMESA TARGETS 12-15 PCT OFFSHORE WIND MARKET
SOUTHAMPTON, England, Sept 20 (Reuters) - Spanish wind turbine maker Gamesa plans to capture 12-15 percent of the global offshore wind market in 2020, chairman Jorge Calvet told Reuters on Tuesday.
Gamesa does not have any utility-scale offshore wind generation, but expects global demand for rugged sea-based turbines to be about 60 gigawatts (GW) in 2020, half of which will be in the North Sea, which it is targeting along with the U.S. and China.
SIEMENS HOPS ON RENEWABLES WAVE WITH POWER LINES
PALMA DE MAJORCA, Spain, Sept 20 (Reuters) - German industrial group Siemens AG aims to benefit from the global push into renewable energy by installing power lines to get electricity from sun-drenched and wind-swept sites to customers.
It also wants to deliver the natural gas-fired power stations that can fill the gap left when neither wind nor sun is powering the green facilities, the company told reporters on the Spanish island of Majorca.
GREEN ENERGY MEETS 23 PCT OF ITALY 2010 POWER DEMAND
MILAN, Sept 20 (Reuters) - Power produced from renewable sources covered 22.8 percent of total demand in Italy in 2010 compared with a 27 percent target set for 2020 under the European Union's efforts to fight climate change, Italy's energy management operator GSE said on Tuesday.
Renewable energy plants doubled in number over the last year to 160,000 with a total capacity of 30.3 gigawatt, up 14.2 percent from 2009, GSE said in a statement.
RENEWABLES STIR GROWTH, CREATE JOBS - EU ADVISER
BERLIN, Sept 19 (Reuters) - A major expansion of renewable energy could create millions of jobs worldwide, stir economic growth in heavily indebted countries and help fight climate change at the same time, an American adviser to the German leader Angela Merkel said on Monday.
Jeremy Rifkin, a best-selling author and an adviser to the European Union on climate change and energy security, said Germany has been leading the way by creating some 250,000 jobs in renewable energy in just a few years, but could do more.
CHINA QUELLS VILLAGE SOLAR POLLUTION PROTESTS
HAINING, China, Sept 18 (Reuters) - Residents of a village in east China accused riot police of heavy-handed tactics after a three-day protest against a solar panel factory accused of dumping toxic waste was brought to an end on Sunday.
"We are being silenced," said a protester who would only give his surname as Cao, at an industrial park on the outskirts of Haining in Zhejiang province as police in riot gear sealed off the site.
E.ON EYES CHINA WIND TURBINES IN GREEN PUSH
FRANKFURT, Sept 16 (Reuters) - E.ON is in talks with China's wind turbine makers, the chief financial officer of its renewable operations said, adding the German utility may in future source turbines produced in the world's largest wind market.
"We have been talking to half a dozen manufacturers and are looking in detail at costs and benefits," Cord Landsmann, chief financial officer of E.ON's climate and renewables unit, told Reuters in an interview.
SUZLON SEES STRONG DEMAND FOR WIND ENERGY IN CHINA
DALIAN, China, Sept 15 (Reuters) - Indian wind turbine maker Suzlon Energy could begin exporting Chinese-assembled turbines to third countries as early as next year, the chairman of the company said on Thursday.
With the company expecting about a 40-percent increase in global revenue this fiscal year, Suzlon is also seeking a Chinese joint-venture partner to produce large turbines in China for the Chinese market, Tulsi Tanti said in an interview at the World Economic Forum in Dalian.
TOKYO, Sept 21 (Reuters) - Chubu Electric Power Co said on Wednesday it has lost about 1,870 megawatts of hydro power output as a very strong typhoon approaches central Japan, but added there are no worries of power shortages.
The company said the hydro plants currently shut due to a rise in water levels include two of its pumped hydro plants, the 780-MW Okuyahagi No.2 unit and the 315-MW Okuyahagi No.1 unit.
GAMESA TARGETS 12-15 PCT OFFSHORE WIND MARKET
SOUTHAMPTON, England, Sept 20 (Reuters) - Spanish wind turbine maker Gamesa plans to capture 12-15 percent of the global offshore wind market in 2020, chairman Jorge Calvet told Reuters on Tuesday.
Gamesa does not have any utility-scale offshore wind generation, but expects global demand for rugged sea-based turbines to be about 60 gigawatts (GW) in 2020, half of which will be in the North Sea, which it is targeting along with the U.S. and China.
SIEMENS HOPS ON RENEWABLES WAVE WITH POWER LINES
PALMA DE MAJORCA, Spain, Sept 20 (Reuters) - German industrial group Siemens AG aims to benefit from the global push into renewable energy by installing power lines to get electricity from sun-drenched and wind-swept sites to customers.
It also wants to deliver the natural gas-fired power stations that can fill the gap left when neither wind nor sun is powering the green facilities, the company told reporters on the Spanish island of Majorca.
GREEN ENERGY MEETS 23 PCT OF ITALY 2010 POWER DEMAND
MILAN, Sept 20 (Reuters) - Power produced from renewable sources covered 22.8 percent of total demand in Italy in 2010 compared with a 27 percent target set for 2020 under the European Union's efforts to fight climate change, Italy's energy management operator GSE said on Tuesday.
Renewable energy plants doubled in number over the last year to 160,000 with a total capacity of 30.3 gigawatt, up 14.2 percent from 2009, GSE said in a statement.
RENEWABLES STIR GROWTH, CREATE JOBS - EU ADVISER
BERLIN, Sept 19 (Reuters) - A major expansion of renewable energy could create millions of jobs worldwide, stir economic growth in heavily indebted countries and help fight climate change at the same time, an American adviser to the German leader Angela Merkel said on Monday.
Jeremy Rifkin, a best-selling author and an adviser to the European Union on climate change and energy security, said Germany has been leading the way by creating some 250,000 jobs in renewable energy in just a few years, but could do more.
CHINA QUELLS VILLAGE SOLAR POLLUTION PROTESTS
HAINING, China, Sept 18 (Reuters) - Residents of a village in east China accused riot police of heavy-handed tactics after a three-day protest against a solar panel factory accused of dumping toxic waste was brought to an end on Sunday.
"We are being silenced," said a protester who would only give his surname as Cao, at an industrial park on the outskirts of Haining in Zhejiang province as police in riot gear sealed off the site.
E.ON EYES CHINA WIND TURBINES IN GREEN PUSH
FRANKFURT, Sept 16 (Reuters) - E.ON is in talks with China's wind turbine makers, the chief financial officer of its renewable operations said, adding the German utility may in future source turbines produced in the world's largest wind market.
"We have been talking to half a dozen manufacturers and are looking in detail at costs and benefits," Cord Landsmann, chief financial officer of E.ON's climate and renewables unit, told Reuters in an interview.
SUZLON SEES STRONG DEMAND FOR WIND ENERGY IN CHINA
DALIAN, China, Sept 15 (Reuters) - Indian wind turbine maker Suzlon Energy could begin exporting Chinese-assembled turbines to third countries as early as next year, the chairman of the company said on Thursday.
With the company expecting about a 40-percent increase in global revenue this fiscal year, Suzlon is also seeking a Chinese joint-venture partner to produce large turbines in China for the Chinese market, Tulsi Tanti said in an interview at the World Economic Forum in Dalian.
20110922 0931 Biofuel Related News.
CARGILL IN BRAZIL CANE CRUSHING JOINT VENTURE
SAO PAULO, Sept 19 (Reuters) - Cargill plans to expand cane crushing capacity in Brazil through a joint venture with local group Usina Sao Joao, to meet growing demand for ethanol, the U.S. agribusiness giant said on Monday .
The joint venture SJC Bioenergia has two mills in the center-western state of Goias.
SCIENTIFIC ADVISORS URGE RETHINK OF EU BIOFUEL POLICY
BRUSSELS, Sept 16 (Reuters) - A panel of 19 European scientists called for a review of European Union bioenergy legislation and warned the bloc on Friday against delay in addressing the indirect climate impact of biofuels.
The Scientific Committee of the European Environment Agency -- the 27-nation EU's environment watchdog -- warned of a "serious accounting error" in EU and global rules to promote the use of bioenergy, such as biofuels made from food crops.
UK APPROVES WELSH 299 MW BIOMASS PLANT
LONDON, Sept 16 (Reuters) - Britain's energy ministry on Friday approved a 299-megawatt (MW) biomass power plant in Anglesey, Wales, proposed by a subsidiary of Anglesey Aluminium Metal.
"Biomass power stations such as this one in Anglesey will provide us a reliable, secure, flexible and renewable source of power," said Energy Minister Charles Hendry.
ARGENTINE GRAINS EXPORTER BETS ON CORN ETHANOL
BUENOS AIRES, Sept 14 (Reuters) - Argentine grains exporter ACA is about to start work on one of the country's first corn-based ethanol plants, betting on increased domestic demand for the fuel, the association's president said on Wednesday.
Argentina is the world's No. 2 corn exporter after the United States and farmers are expected to dedicate about 10 percent more land to the crop this year, taking advantage of high global prices.
BP PLANS TO QUADRUPLE BRAZIL CANE OPS IN 5 YEARS
SAO PAULO, Sept 14 (Reuters) - Oil major BP said on Wednesday it plans to quadruple its cane crushing capacity in Brazil within five years, renewing its confidence in a sector that saw a lag in new investments over the past few years.
The increase should be through the expansion of its current units and the construction of new plants.
BIOENERGY TARGETS BASED ON FLAWED SCIENCE -DRAFT
BRUSSELS, Sept 14 (Reuters) - Existing targets for biofuels and other forms of bioenergy are based on flawed carbon accounting and should be revised downwards, a draft report by a panel of 19 top European scientists showed.
"It is widely assumed that bioenergy is inherently carbon-neutral -- however this assumption is flawed," said the Scientific Committee of the European Environment Agency, the EU's environment watchdog.
ETHANOL INDUSTRY TO STAY HUNGRY FOR U.S. CORN
KANSAS CITY, Mo., Sept 14 (Reuters) - The U.S. ethanol industry is keeping its foot on the gas pedal at production plants, and if the trend continues it could defy a government forecast that the industry will have its first drop in corn use since the turn of the century.
The government forecast, which was issued on Monday, was based on expected weaker gasoline use and higher corn prices. Ethanol is blended with gasoline. In addition, some analysts said the expiration of an industry tax credit at the end of the year could also eat into profits.
THAILAND TO EXPORT MORE ETHANOL, AIMS TO BE TRADE HUB
BANGKOK, Sept 14 (Reuters) - Thailand plans to become a Southeast Asian centre of ethanol trade, encouraging producers to increase production for exports as domestic demand declines with car users switching back to pure fossil fuels, the Energy Minister said on Wednesday.
The country has exported 60 million litres of ethanol so far this year, up from 45 million litres shipped for the whole of 2010, to major buyers such as South Korea, Japan, Singapore, the Philippines and China.
SAO PAULO, Sept 19 (Reuters) - Cargill plans to expand cane crushing capacity in Brazil through a joint venture with local group Usina Sao Joao, to meet growing demand for ethanol, the U.S. agribusiness giant said on Monday .
The joint venture SJC Bioenergia has two mills in the center-western state of Goias.
SCIENTIFIC ADVISORS URGE RETHINK OF EU BIOFUEL POLICY
BRUSSELS, Sept 16 (Reuters) - A panel of 19 European scientists called for a review of European Union bioenergy legislation and warned the bloc on Friday against delay in addressing the indirect climate impact of biofuels.
The Scientific Committee of the European Environment Agency -- the 27-nation EU's environment watchdog -- warned of a "serious accounting error" in EU and global rules to promote the use of bioenergy, such as biofuels made from food crops.
UK APPROVES WELSH 299 MW BIOMASS PLANT
LONDON, Sept 16 (Reuters) - Britain's energy ministry on Friday approved a 299-megawatt (MW) biomass power plant in Anglesey, Wales, proposed by a subsidiary of Anglesey Aluminium Metal.
"Biomass power stations such as this one in Anglesey will provide us a reliable, secure, flexible and renewable source of power," said Energy Minister Charles Hendry.
ARGENTINE GRAINS EXPORTER BETS ON CORN ETHANOL
BUENOS AIRES, Sept 14 (Reuters) - Argentine grains exporter ACA is about to start work on one of the country's first corn-based ethanol plants, betting on increased domestic demand for the fuel, the association's president said on Wednesday.
Argentina is the world's No. 2 corn exporter after the United States and farmers are expected to dedicate about 10 percent more land to the crop this year, taking advantage of high global prices.
BP PLANS TO QUADRUPLE BRAZIL CANE OPS IN 5 YEARS
SAO PAULO, Sept 14 (Reuters) - Oil major BP said on Wednesday it plans to quadruple its cane crushing capacity in Brazil within five years, renewing its confidence in a sector that saw a lag in new investments over the past few years.
The increase should be through the expansion of its current units and the construction of new plants.
BIOENERGY TARGETS BASED ON FLAWED SCIENCE -DRAFT
BRUSSELS, Sept 14 (Reuters) - Existing targets for biofuels and other forms of bioenergy are based on flawed carbon accounting and should be revised downwards, a draft report by a panel of 19 top European scientists showed.
"It is widely assumed that bioenergy is inherently carbon-neutral -- however this assumption is flawed," said the Scientific Committee of the European Environment Agency, the EU's environment watchdog.
ETHANOL INDUSTRY TO STAY HUNGRY FOR U.S. CORN
KANSAS CITY, Mo., Sept 14 (Reuters) - The U.S. ethanol industry is keeping its foot on the gas pedal at production plants, and if the trend continues it could defy a government forecast that the industry will have its first drop in corn use since the turn of the century.
The government forecast, which was issued on Monday, was based on expected weaker gasoline use and higher corn prices. Ethanol is blended with gasoline. In addition, some analysts said the expiration of an industry tax credit at the end of the year could also eat into profits.
THAILAND TO EXPORT MORE ETHANOL, AIMS TO BE TRADE HUB
BANGKOK, Sept 14 (Reuters) - Thailand plans to become a Southeast Asian centre of ethanol trade, encouraging producers to increase production for exports as domestic demand declines with car users switching back to pure fossil fuels, the Energy Minister said on Wednesday.
The country has exported 60 million litres of ethanol so far this year, up from 45 million litres shipped for the whole of 2010, to major buyers such as South Korea, Japan, Singapore, the Philippines and China.
20110922 0929 Global Market Related News.
Asian Equities Set for Lowest Close in a Year as Fed Cites Economic Risks (Source: Bloomberg)
Asian stocks fell, sending the regional benchmark index toward its lowest close in more than a year, after the U.S. Federal Open Market Committee pledged to buy $400 billion of long-term debt and cited risks to the economy, souring the earnings outlook for exporters and banks. BHP Billiton Ltd. (BHP), the world’s largest mining company, slumped 3.2 percent in Sydney and rival Rio Tinto Group sank 4.7 percent. Toyota Motor Corp., the world’s biggest carmaker, declined 1.9 percent in Tokyo, while South Korea’s Samsung Electronics Co. dropped 2.2 percent in Seoul. Mitsubishi UFJ Financial Group Inc., Japan’s No. 1 lender by market value, lost 2.4 percent. The MSCI Asia Pacific Index slumped 1.7 percent to 115.85 as of 9:33 a.m. in Tokyo. About eight stocks fell for each that advanced on the measure, which closed little changed yesterday. The gauge dropped in the previous two weeks amid concern Europe’s debt crisis is spreading and signs of slowing U.S. growth.
Japanese Stocks Decline as Fed Stimulus Plan Disappoints Investors (Source: Bloomberg)
Japanese stocks fell after the Federal Reserve’s plan to buy more long-term bonds failed to lift investor confidence amid what the central bank called “significant downside risks” to the economic growth outlook. Toyota Motor Corp. (7203), the world’s biggest carmaker, slid 2 percent. Mitsubishi UFJ Financial Group Inc. (8306), Japan’s largest lender by market value, fell 2.1 percent after Moody’s Investors Service cut the credit ratings on three major U.S. banks. The Nikkei 225 (NKY) Stock Average declined 1.2 percent to 8,635.18 as of 9:03 a.m. in Tokyo after the Federal Open Market Committee yesterday announced a plan to support the world’s biggest economy by buying $400 billion in long-term debt. The broader Topix index dropped 1.1 percent to 748.57. Japan’s stock market will be closed tomorrow for a public holiday.
Japanese, Australian Stock Futures Fall on Fed’s Bond Buying (Source: Bloomberg)
Japanese and Australian stock futures fell after the Federal Open Market Committee pledged to buy $400 billion of long-term debt and cited risks to the economic outlook, damping the earnings prospects for Asian exporters. American depositary receipts of Toyota Motor Corp. (7203), the world’s biggest carmaker that gets 28 percent of its sale in the U.S. and Canada, slid 2.1 percent from the closing share price in Tokyo. Those of Mitsubishi UFJ Financial Group Inc. (8306), Japan’s largest lender by market value, fell 3.9 percent after Moody’s Investors Service cut its ratings on three major U.S. banks. ADRs of Woodside Petroleum Ltd. (WPL), Australia’s No. 2 oil and gas producer, dropped 1.3 percent after crude prices fell. Futures on Japan’s Nikkei 225 (NKY) Stock Average expiring in December closed at 8,530 in Chicago yesterday, down from 8,680 in Osaka, Japan. They were bid in the pre-market at 8,580 in Osaka at 8:05 a.m. local time. Futures on Australia’s S&P/ASX 200 Index declined 2.6 percent today.
New Zealand’s NZX 50 Index lost 0.6 percent in Wellington.
European Stocks Retreat on Greek Talks; Peugeot, Volkswagen Lead Decline (Source: Bloomberg)
European stocks retreated as officials said they plan to return to Athens next week after three days of consultations failed to produce a solution to the country’s debt crisis. PSA Peugeot Citroen and Volkswagen AG (VOW) led a decline in automakers. BHP Billiton Ltd. (BHP) and Rio Tinto Group, the world’s largest mining companies, fell with metal prices. Deutsche Lufthansa AG (LHA) lost 5 percent as Deutsche Bank AG (DBK) downgraded Europe’s second-biggest airline. Stada Arzneimittel AG (SAZ) slumped 19 percent for the biggest drop in three years. The benchmark Stoxx Europe 600 Index sank 1.7 percent to 225.33 at the 4:30 p.m. close in London. The gauge rose for the fifth day in six yesterday as Greece described its debt talks with the European Union and the International Monetary Fund as “productive” and investors speculated the Federal Reserve will provide more stimulus at today’s meeting.
The Stoxx 600 has still fallen 23 percent from this year’s peak on Feb. 17 amid concern the global economic recovery is at risk.
Emerging-Market Stocks Decline to a 14-Month Low as Fed Sees Economic Risk (Source: Bloomberg)
Emerging-market stocks fell to a 14-month low after the Federal Reserve said there are “downside risks” to the economic outlook and planned to replace much of the short-term debt in their portfolio with longer-term Treasuries. The MSCI Emerging Markets Index slipped 1.2 percent to 940.02 at 5:06 p.m. New York time, the lowest closing level since July 2010. Equities benchmarks in Brazil, Mexico, Chile, and Argentina declined. Russia’s Micex Index retreated 0.8 percent. Indonesia’s Jakarta Composite index slid for a third day as the nation’s domestic vehicle sales slowed in August. Hungary’s BUX index declined 1.3 percent. The U.S. central bank will buy $400 billion of bonds with maturities of six to 30 years while selling an equal amount of debt maturing in three years or less, the Federal Open Market Committee said today in Washington after a two-day meeting. “There are significant downside risks to the economic outlook, including strains in global financial markets,” the Fed statement said.
Fed Will Shift Holdings to Longer-Term Securities (Source: Bloomberg)
The Federal Reserve will replace $400 billion of short-term debt in its portfolio with longer- term Treasuries in an effort to further reduce borrowing costs and counter rising risks of a recession. The central bank will buy bonds with maturities of six to 30 years through June while selling an equal amount of debt maturing in three years or less, the Federal Open Market Committee said today in Washington after a two-day meeting. The action “should put downward pressure on longer-term interest rates and help make broader financial conditions more accommodative,” the FOMC said. Chairman Ben S. Bernanke expanded use of unconventional monetary tools for a second straight meeting after job gains stalled and the government lowered its estimate of second- quarter growth. Yields on 30-year Treasuries fell below 3 percent for the first time since 2009 and U.S. stocks had their biggest drop in a month on the Fed’s plan, dubbed “Operation Twist” after a similar Fed action in 1961.
Sales of U.S. Existing Homes Increased More Than Forecast (Source: Bloomberg)
Sales of previously owned U.S. homes rose more than anticipated in August as investors scooped up distressed properties with cash. The 7.7 percent increase left purchases at a five-month high 5.03 million annual rate, the National Association of Realtors said today in Washington. The August pace compares with a peak of 7.08 million in 2005, before the housing boom turned into a subprime-mortgage bust that dragged the economy into an 18-month recession. “Housing’s been down for so long, we should take whatever good news we can get,” said Brian Jones, an economist at Societe Generale in New York, whose forecast was among the highest in the Bloomberg survey. “Interest rates are low and pricing is attractive and people are responding.”
Bernanke Battling Housing Collapse Shows Fed Has Few Tools to Heal Economy (Source: Bloomberg)
U.S. mortgage rates are the lowest in at least four decades, with a 30-year fixed loan available at 4.09 percent. That didn’t help Alexis Wolf buy a townhome in Beaverton, Oregon. “Unless you have family help, you’re stuck renting,” said Wolf, 26, a real estate broker who turned to relatives for a loan because she didn’t have the credit and employment history needed to qualify for a mortgage. Wolf’s experience illustrates the predicament for Federal Reserve policy makers as they end a two-day meeting today to consider ways to boost economic growth. Low interest rates, the traditional medicine for a flagging economy, aren’t helping housing, which since 1982 has aided every recovery except the current one.
BofA, Wells Fargo Downgraded by Moody’s (Source: Bloomberg)
Bank of America Corp. (BAC) and Wells Fargo & Co. (WFC) had long-term credit ratings downgraded by Moody’s Investors Service, which said U.S. support has become less likely if lenders get into financial trouble. Citigroup Inc. (C)’s short-term rating also was cut by Moody’s, which said today “there is an increased possibility that the government might allow a large financial institution to fail, taking the view that contagion could be limited.” Citigroup’s stand-alone credit has improved, Moody’s said in a statement, leading the service to confirm the bank’s long-term rating. The downgrade questions whether the largest banks will always be “too big to fail,” a status conferred in 2008 when they received government rescues to keep the financial system from collapsing. Lawmakers have since overhauled regulations to head off a repeat of the bailouts and ordered regulators to set up a system for seizing and dismantling banks that founder.
U.S. Stocks Drop as Fed Announces Bond Purchase Plan, Sees Economic Risks (Source: Bloomberg)
U.S. stocks slumped, giving the Standard & Poor’s 500 Index its biggest decline in a month, as the Federal Reserve announced plans to buy $400 billion of long- term debt and cited risks to the economic outlook. Caterpillar Inc. and Dow Chemical Co. fell more than 5.1 percent, pacing losses among companies most-tied to the economy. Financial shares in the S&P 500 slid 4.9 percent as a group, to a two-year low, as Moody’s Investors Service cut its ratings on Bank of America Corp., Citigroup Inc. and Wells Fargo & Co. The Dow Jones Transportation Average slid 5.3 percent as railroad shares tumbled after two coal companies cut their forecasts. The S&P 500 fell 2.9 percent to 1,166.76 at 4 p.m. New York time. The benchmark gauge for American equities has dropped 4.1 percent in three days. The Dow Jones Industrial Average lost 283.82 points, or 2.5 percent, to 11,124.84 today.
China Faces Surge in ‘Hot Money’ Inflows on Market Turmoil, PBOC Data Show (Source: Bloomberg)
Turmoil in global financial markets may be spurring a surge in flows of speculative capital into China as investors bet on the nation’s growth and prospects for gains in the yuan. Financial institutions’ yuan positions, accumulated from purchases of foreign exchange by the central bank, had a net gain of 376.94 billion yuan ($59 billion) in August, 72 percent more than in July and the biggest increase in five months, central bank data showed today. Economists watch the numbers for signs of inflows of so-called hot money. Inflows of capital may complicate central bank efforts to tame inflation and limit the risk of asset bubbles in the real- estate market. With lenders’ reserve requirements already at record levels, the People’s Bank of China may rely on selling bills to soak up cash.
Greece Accelerates Cuts to Wages, Pensions (Source: Bloomberg)
Greek Prime Minister George Papandreou’s government said it will accelerate budget cuts, targeting civil servants’ wages and pensioners to keep emergency loans flowing and avoid default. Measures announced yesterday following two rounds of talks with the European Union and the International Monetary Fund include: a 20 percent cut in pensions of more than 1,200 euros ($1,650) a month, according to a government statement; pensions paid to those younger than 55 will be shaved by 40 percent for the amount exceeding 1,000 euros and wages will be lowered for 30,000 state employees. The policies were demanded by international lenders to ensure Greece reach deficit-reduction targets in a 110 billion- euro ($151 billion) bailout and receive a payment due next month.
Papandreou Pushes for Accelerated Cuts to Ensure Next Month’s Aid Package (Source: Bloomberg)
Greek Prime Minister George Papandreou convenes his Cabinet to press for accelerating budget cuts to ensure the next tranche of an international rescue package is delivered next month to stave off default. Today’s 11:30 a.m. meeting in Athens follows two days of telephone consultations between Finance Minister Evangelos Venizelos and representatives from the European Union and International Monetary Fund, which made “good progress,” the EU said. The meetings were intended to damp concerns that Greece may miss deficit-reduction targets required to receive rescue loans. The EU statement said a “full mission” will return to Athens next week after Venizelos’s talks in coming days at the IMF annual meeting in Washington.
Euro Advances After Greece Accelerates Spending Cuts to Avoid Debt Default (Source: Bloomberg)
The euro rose after Greek Prime Minister George Papandreou’s government said it will accelerate budget cuts, targeting civil servants’ wages and pensioners to keep emergency loans flowing and avoid default. The measures announced yesterday followed two rounds of talks with the European Union and the International Monetary Fund. European leaders are squabbling over the terms of a July 21 agreement for a second Greek rescue and the prospect that they will be forced to channel more money to keep Greece in the currency union. “My current base assumption is all the stuff in Europe will eventually work itself out,” said Mike Burrowes, a strategist at Bank of New Zealand Ltd. in Wellington. “We’ll probably look for euro to initially recover back to $1.3650.
Bank of England Policy Makers See Greater Stimulus as Increasingly Likely (Source: Bloomberg)
Bank of England officials said they may need to buy more bonds to bolster a faltering recovery after holding off adding stimulus this month in a decision that was “finely balanced.” Most policy makers said it was “increasingly probable that further asset purchases to loosen monetary conditions would become warranted at some point,” the minutes of the Monetary Policy Committee’s Sept. 8 decision said. “For some members, a continuation of the conditions seen over the past month would probably be sufficient to justify an expansion of the asset purchase program at a subsequent meeting.” The nine-member MPC, led by Mervyn King, voted 8-1 to maintain the size of the bond plan at 200 billion pounds ($313 billion) and were unanimous in keeping the benchmark rate at a record low of 0.5 percent.
U.K. Government Must Bring Forward Spending to Boost Economy, Huhne Says (Source: Bloomberg)
U.K. Energy Secretary Chris Huhne said the government should speed up capital spending to help the economy, after the International Monetary Fund said ministers may need to consider delaying some of their fiscal squeeze. “We’ve got to be creative and imaginative about bringing forward more spending,” Huhne told a fringe event last night at his Liberal Democrat party’s annual conference in Birmingham, central England. He said the option of “pump-priming” the economy by increasing expenditure is “blocked off to us” because of “the scale of our budget deficit.” Deputy Prime Minister Nick Clegg, the Liberal Democrat leader, said Sept. 14 the government was going to “unblock” 40 infrastructure projects in an effort to spur growth. He said the government wanted to “put its foot on the accelerator.”
IMF Sees 300 Billion-Euro Credit Risk to Europe Banks (Source: Bloomberg)
The European debt crisis has generated as much as 300 billion euros ($410 billion) in credit risk for European banks, the International Monetary Fund said, calling for capital injections to reassure investors and support lending. Political squabbling in Europe over ways to fight contagion and delays in implementing agreed measures are raising concern about the risk of government defaults, the IMF said. Banks, in turn face “funding challenges” because investors are concerned financial institutions will potentially show losses on government bonds holdings, and reliance by some on the European Central Bank for liquidity, it said. “A number of banks must raise capital to help ensure the confidence of their creditors and depositors,” the IMF wrote in its Global Financial Stability Report released today. “Without additional capital buffers, problems in accessing funding are likely to create deleveraging pressures at banks, which will force them to cut credit to the real economy.”
Harper Running Out of Economic Drivers as Carney Warns About Canada Trade (Source: Bloomberg)
Canadian Prime Minister Stephen Harper, who has overseen one of the developed world’s most robust economies during the global downturn, may be running out of drivers to sustain its growth. The world’s 10th-largest economy shrank in the second quarter as exports plunged. Bank of Canada Governor Mark Carney said yesterday trade will remain a “major source of weakness” as the U.S. faces its slowest recovery since the Great Depression. The IMF cut its growth forecast for Canada. “The risks to our economy remain largely external and are skewed to the downside,” Carney, 46, said in a speech in Saint John, New Brunswick.
Asian stocks fell, sending the regional benchmark index toward its lowest close in more than a year, after the U.S. Federal Open Market Committee pledged to buy $400 billion of long-term debt and cited risks to the economy, souring the earnings outlook for exporters and banks. BHP Billiton Ltd. (BHP), the world’s largest mining company, slumped 3.2 percent in Sydney and rival Rio Tinto Group sank 4.7 percent. Toyota Motor Corp., the world’s biggest carmaker, declined 1.9 percent in Tokyo, while South Korea’s Samsung Electronics Co. dropped 2.2 percent in Seoul. Mitsubishi UFJ Financial Group Inc., Japan’s No. 1 lender by market value, lost 2.4 percent. The MSCI Asia Pacific Index slumped 1.7 percent to 115.85 as of 9:33 a.m. in Tokyo. About eight stocks fell for each that advanced on the measure, which closed little changed yesterday. The gauge dropped in the previous two weeks amid concern Europe’s debt crisis is spreading and signs of slowing U.S. growth.
Japanese Stocks Decline as Fed Stimulus Plan Disappoints Investors (Source: Bloomberg)
Japanese stocks fell after the Federal Reserve’s plan to buy more long-term bonds failed to lift investor confidence amid what the central bank called “significant downside risks” to the economic growth outlook. Toyota Motor Corp. (7203), the world’s biggest carmaker, slid 2 percent. Mitsubishi UFJ Financial Group Inc. (8306), Japan’s largest lender by market value, fell 2.1 percent after Moody’s Investors Service cut the credit ratings on three major U.S. banks. The Nikkei 225 (NKY) Stock Average declined 1.2 percent to 8,635.18 as of 9:03 a.m. in Tokyo after the Federal Open Market Committee yesterday announced a plan to support the world’s biggest economy by buying $400 billion in long-term debt. The broader Topix index dropped 1.1 percent to 748.57. Japan’s stock market will be closed tomorrow for a public holiday.
Japanese, Australian Stock Futures Fall on Fed’s Bond Buying (Source: Bloomberg)
Japanese and Australian stock futures fell after the Federal Open Market Committee pledged to buy $400 billion of long-term debt and cited risks to the economic outlook, damping the earnings prospects for Asian exporters. American depositary receipts of Toyota Motor Corp. (7203), the world’s biggest carmaker that gets 28 percent of its sale in the U.S. and Canada, slid 2.1 percent from the closing share price in Tokyo. Those of Mitsubishi UFJ Financial Group Inc. (8306), Japan’s largest lender by market value, fell 3.9 percent after Moody’s Investors Service cut its ratings on three major U.S. banks. ADRs of Woodside Petroleum Ltd. (WPL), Australia’s No. 2 oil and gas producer, dropped 1.3 percent after crude prices fell. Futures on Japan’s Nikkei 225 (NKY) Stock Average expiring in December closed at 8,530 in Chicago yesterday, down from 8,680 in Osaka, Japan. They were bid in the pre-market at 8,580 in Osaka at 8:05 a.m. local time. Futures on Australia’s S&P/ASX 200 Index declined 2.6 percent today.
New Zealand’s NZX 50 Index lost 0.6 percent in Wellington.
European Stocks Retreat on Greek Talks; Peugeot, Volkswagen Lead Decline (Source: Bloomberg)
European stocks retreated as officials said they plan to return to Athens next week after three days of consultations failed to produce a solution to the country’s debt crisis. PSA Peugeot Citroen and Volkswagen AG (VOW) led a decline in automakers. BHP Billiton Ltd. (BHP) and Rio Tinto Group, the world’s largest mining companies, fell with metal prices. Deutsche Lufthansa AG (LHA) lost 5 percent as Deutsche Bank AG (DBK) downgraded Europe’s second-biggest airline. Stada Arzneimittel AG (SAZ) slumped 19 percent for the biggest drop in three years. The benchmark Stoxx Europe 600 Index sank 1.7 percent to 225.33 at the 4:30 p.m. close in London. The gauge rose for the fifth day in six yesterday as Greece described its debt talks with the European Union and the International Monetary Fund as “productive” and investors speculated the Federal Reserve will provide more stimulus at today’s meeting.
The Stoxx 600 has still fallen 23 percent from this year’s peak on Feb. 17 amid concern the global economic recovery is at risk.
Emerging-Market Stocks Decline to a 14-Month Low as Fed Sees Economic Risk (Source: Bloomberg)
Emerging-market stocks fell to a 14-month low after the Federal Reserve said there are “downside risks” to the economic outlook and planned to replace much of the short-term debt in their portfolio with longer-term Treasuries. The MSCI Emerging Markets Index slipped 1.2 percent to 940.02 at 5:06 p.m. New York time, the lowest closing level since July 2010. Equities benchmarks in Brazil, Mexico, Chile, and Argentina declined. Russia’s Micex Index retreated 0.8 percent. Indonesia’s Jakarta Composite index slid for a third day as the nation’s domestic vehicle sales slowed in August. Hungary’s BUX index declined 1.3 percent. The U.S. central bank will buy $400 billion of bonds with maturities of six to 30 years while selling an equal amount of debt maturing in three years or less, the Federal Open Market Committee said today in Washington after a two-day meeting. “There are significant downside risks to the economic outlook, including strains in global financial markets,” the Fed statement said.
Fed Will Shift Holdings to Longer-Term Securities (Source: Bloomberg)
The Federal Reserve will replace $400 billion of short-term debt in its portfolio with longer- term Treasuries in an effort to further reduce borrowing costs and counter rising risks of a recession. The central bank will buy bonds with maturities of six to 30 years through June while selling an equal amount of debt maturing in three years or less, the Federal Open Market Committee said today in Washington after a two-day meeting. The action “should put downward pressure on longer-term interest rates and help make broader financial conditions more accommodative,” the FOMC said. Chairman Ben S. Bernanke expanded use of unconventional monetary tools for a second straight meeting after job gains stalled and the government lowered its estimate of second- quarter growth. Yields on 30-year Treasuries fell below 3 percent for the first time since 2009 and U.S. stocks had their biggest drop in a month on the Fed’s plan, dubbed “Operation Twist” after a similar Fed action in 1961.
Sales of U.S. Existing Homes Increased More Than Forecast (Source: Bloomberg)
Sales of previously owned U.S. homes rose more than anticipated in August as investors scooped up distressed properties with cash. The 7.7 percent increase left purchases at a five-month high 5.03 million annual rate, the National Association of Realtors said today in Washington. The August pace compares with a peak of 7.08 million in 2005, before the housing boom turned into a subprime-mortgage bust that dragged the economy into an 18-month recession. “Housing’s been down for so long, we should take whatever good news we can get,” said Brian Jones, an economist at Societe Generale in New York, whose forecast was among the highest in the Bloomberg survey. “Interest rates are low and pricing is attractive and people are responding.”
Bernanke Battling Housing Collapse Shows Fed Has Few Tools to Heal Economy (Source: Bloomberg)
U.S. mortgage rates are the lowest in at least four decades, with a 30-year fixed loan available at 4.09 percent. That didn’t help Alexis Wolf buy a townhome in Beaverton, Oregon. “Unless you have family help, you’re stuck renting,” said Wolf, 26, a real estate broker who turned to relatives for a loan because she didn’t have the credit and employment history needed to qualify for a mortgage. Wolf’s experience illustrates the predicament for Federal Reserve policy makers as they end a two-day meeting today to consider ways to boost economic growth. Low interest rates, the traditional medicine for a flagging economy, aren’t helping housing, which since 1982 has aided every recovery except the current one.
BofA, Wells Fargo Downgraded by Moody’s (Source: Bloomberg)
Bank of America Corp. (BAC) and Wells Fargo & Co. (WFC) had long-term credit ratings downgraded by Moody’s Investors Service, which said U.S. support has become less likely if lenders get into financial trouble. Citigroup Inc. (C)’s short-term rating also was cut by Moody’s, which said today “there is an increased possibility that the government might allow a large financial institution to fail, taking the view that contagion could be limited.” Citigroup’s stand-alone credit has improved, Moody’s said in a statement, leading the service to confirm the bank’s long-term rating. The downgrade questions whether the largest banks will always be “too big to fail,” a status conferred in 2008 when they received government rescues to keep the financial system from collapsing. Lawmakers have since overhauled regulations to head off a repeat of the bailouts and ordered regulators to set up a system for seizing and dismantling banks that founder.
U.S. Stocks Drop as Fed Announces Bond Purchase Plan, Sees Economic Risks (Source: Bloomberg)
U.S. stocks slumped, giving the Standard & Poor’s 500 Index its biggest decline in a month, as the Federal Reserve announced plans to buy $400 billion of long- term debt and cited risks to the economic outlook. Caterpillar Inc. and Dow Chemical Co. fell more than 5.1 percent, pacing losses among companies most-tied to the economy. Financial shares in the S&P 500 slid 4.9 percent as a group, to a two-year low, as Moody’s Investors Service cut its ratings on Bank of America Corp., Citigroup Inc. and Wells Fargo & Co. The Dow Jones Transportation Average slid 5.3 percent as railroad shares tumbled after two coal companies cut their forecasts. The S&P 500 fell 2.9 percent to 1,166.76 at 4 p.m. New York time. The benchmark gauge for American equities has dropped 4.1 percent in three days. The Dow Jones Industrial Average lost 283.82 points, or 2.5 percent, to 11,124.84 today.
China Faces Surge in ‘Hot Money’ Inflows on Market Turmoil, PBOC Data Show (Source: Bloomberg)
Turmoil in global financial markets may be spurring a surge in flows of speculative capital into China as investors bet on the nation’s growth and prospects for gains in the yuan. Financial institutions’ yuan positions, accumulated from purchases of foreign exchange by the central bank, had a net gain of 376.94 billion yuan ($59 billion) in August, 72 percent more than in July and the biggest increase in five months, central bank data showed today. Economists watch the numbers for signs of inflows of so-called hot money. Inflows of capital may complicate central bank efforts to tame inflation and limit the risk of asset bubbles in the real- estate market. With lenders’ reserve requirements already at record levels, the People’s Bank of China may rely on selling bills to soak up cash.
Greece Accelerates Cuts to Wages, Pensions (Source: Bloomberg)
Greek Prime Minister George Papandreou’s government said it will accelerate budget cuts, targeting civil servants’ wages and pensioners to keep emergency loans flowing and avoid default. Measures announced yesterday following two rounds of talks with the European Union and the International Monetary Fund include: a 20 percent cut in pensions of more than 1,200 euros ($1,650) a month, according to a government statement; pensions paid to those younger than 55 will be shaved by 40 percent for the amount exceeding 1,000 euros and wages will be lowered for 30,000 state employees. The policies were demanded by international lenders to ensure Greece reach deficit-reduction targets in a 110 billion- euro ($151 billion) bailout and receive a payment due next month.
Papandreou Pushes for Accelerated Cuts to Ensure Next Month’s Aid Package (Source: Bloomberg)
Greek Prime Minister George Papandreou convenes his Cabinet to press for accelerating budget cuts to ensure the next tranche of an international rescue package is delivered next month to stave off default. Today’s 11:30 a.m. meeting in Athens follows two days of telephone consultations between Finance Minister Evangelos Venizelos and representatives from the European Union and International Monetary Fund, which made “good progress,” the EU said. The meetings were intended to damp concerns that Greece may miss deficit-reduction targets required to receive rescue loans. The EU statement said a “full mission” will return to Athens next week after Venizelos’s talks in coming days at the IMF annual meeting in Washington.
Euro Advances After Greece Accelerates Spending Cuts to Avoid Debt Default (Source: Bloomberg)
The euro rose after Greek Prime Minister George Papandreou’s government said it will accelerate budget cuts, targeting civil servants’ wages and pensioners to keep emergency loans flowing and avoid default. The measures announced yesterday followed two rounds of talks with the European Union and the International Monetary Fund. European leaders are squabbling over the terms of a July 21 agreement for a second Greek rescue and the prospect that they will be forced to channel more money to keep Greece in the currency union. “My current base assumption is all the stuff in Europe will eventually work itself out,” said Mike Burrowes, a strategist at Bank of New Zealand Ltd. in Wellington. “We’ll probably look for euro to initially recover back to $1.3650.
Bank of England Policy Makers See Greater Stimulus as Increasingly Likely (Source: Bloomberg)
Bank of England officials said they may need to buy more bonds to bolster a faltering recovery after holding off adding stimulus this month in a decision that was “finely balanced.” Most policy makers said it was “increasingly probable that further asset purchases to loosen monetary conditions would become warranted at some point,” the minutes of the Monetary Policy Committee’s Sept. 8 decision said. “For some members, a continuation of the conditions seen over the past month would probably be sufficient to justify an expansion of the asset purchase program at a subsequent meeting.” The nine-member MPC, led by Mervyn King, voted 8-1 to maintain the size of the bond plan at 200 billion pounds ($313 billion) and were unanimous in keeping the benchmark rate at a record low of 0.5 percent.
U.K. Government Must Bring Forward Spending to Boost Economy, Huhne Says (Source: Bloomberg)
U.K. Energy Secretary Chris Huhne said the government should speed up capital spending to help the economy, after the International Monetary Fund said ministers may need to consider delaying some of their fiscal squeeze. “We’ve got to be creative and imaginative about bringing forward more spending,” Huhne told a fringe event last night at his Liberal Democrat party’s annual conference in Birmingham, central England. He said the option of “pump-priming” the economy by increasing expenditure is “blocked off to us” because of “the scale of our budget deficit.” Deputy Prime Minister Nick Clegg, the Liberal Democrat leader, said Sept. 14 the government was going to “unblock” 40 infrastructure projects in an effort to spur growth. He said the government wanted to “put its foot on the accelerator.”
IMF Sees 300 Billion-Euro Credit Risk to Europe Banks (Source: Bloomberg)
The European debt crisis has generated as much as 300 billion euros ($410 billion) in credit risk for European banks, the International Monetary Fund said, calling for capital injections to reassure investors and support lending. Political squabbling in Europe over ways to fight contagion and delays in implementing agreed measures are raising concern about the risk of government defaults, the IMF said. Banks, in turn face “funding challenges” because investors are concerned financial institutions will potentially show losses on government bonds holdings, and reliance by some on the European Central Bank for liquidity, it said. “A number of banks must raise capital to help ensure the confidence of their creditors and depositors,” the IMF wrote in its Global Financial Stability Report released today. “Without additional capital buffers, problems in accessing funding are likely to create deleveraging pressures at banks, which will force them to cut credit to the real economy.”
Harper Running Out of Economic Drivers as Carney Warns About Canada Trade (Source: Bloomberg)
Canadian Prime Minister Stephen Harper, who has overseen one of the developed world’s most robust economies during the global downturn, may be running out of drivers to sustain its growth. The world’s 10th-largest economy shrank in the second quarter as exports plunged. Bank of Canada Governor Mark Carney said yesterday trade will remain a “major source of weakness” as the U.S. faces its slowest recovery since the Great Depression. The IMF cut its growth forecast for Canada. “The risks to our economy remain largely external and are skewed to the downside,” Carney, 46, said in a speech in Saint John, New Brunswick.
20110922 0928 Global Commodities Related News.
Corn (Source: CME)
US corn futures finish lower under spillover pressure from steep losses in the soybean market. Selling expands to the grains as the oilseed reaches a six-week low. Corn and wheat had been higher earlier in the session but "threw in the towel when the beans started to" tumble, says Mike Zuzolo of Global Commodity Analytics and Consulting. Commodity funds were sellers in all three markets, unloading an estimated 5,000 corn and 9,000 soybean contracts. CBOT December corn drops 4 1/2c to $6.85 3/4 a bushel.
Wheat (Source: CME)
US wheat futures finish at a 6-week low, pulling back from early gains on increasing jitters about poor demand. Export sales have been weak recently as Russian wheat is lower-priced than US wheat on the global market. Egypt, the world's top buyer, issued a tender for wheat and will likely continue to buy from Russia, traders say. Concerns about the shaky global economy add to worries about commodity demand. CBOT December wheat slips 8c to $6.66 3/4 a bushel, KCBT December drops 4 1/2c to $7.60 1/2 and MGEX December slides2c to $8.40 1/2.
Wheat Falls to Two-Month Low as Demand May Ebb on Global Economic Concerns (Source: Bloomberg)
Wheat futures fell to a two-month low on concern that the global economy will falter, diminishing demand for commodities. After Chicago grain markets closed, the U.S. Federal Reserve said there are “significant downside risks” to the economic outlook. The Standard & Poor’s 500 Index dropped as much as 3 percent, and the Thomson Reuters/Jefferies CRB Index of raw materials slid 1.1 percent. “The economy, not only in the U.S., but the global economy continues to struggle,” Jerod Leman, a broker at Wellington Commodities in Carmel, Indiana, said in a telephone interview. “There is concern that we’ll slip back into recession, and that would slow down demand for commodities.”
U.S. wheat, soy tick up; corn awaits China's move
SINGAPORE, Sept 21 (Reuters) - U.S. wheat and soy futures ticked higher despite escalating worries about the global economy and the IMF warning the United States could slip back into recession, while corn hardly moved as dealers awaited a possible purchase by China.
Under normal circumstances we would expect prices to rise. But what we have right now in terms of the global economic environment is anything but a normal environment, and that's what's pressuring prices lower," said Luke Mathews, commodities strategist at Commonwealth Bank of Australia in Sydney.
India rice court case withdrawn, exports seen unchanged
NEW DELHI, Sept 21 (Reuters) - A court case seeking to stop the exports of one million tonnes of rice from India has been withdrawn, the chief of the trade body which filed the petition said on Wednesday, but this may not lead to the consignment being shipped.
As a result exports of common rice from India will remain for now at 2 million tonnes announced by the food minister this month.
Russian grain harvest 81.1 million tonnes so far
MOSCOW, Sept 21 (Reuters) - Russia harvested 81.1 million tonnes of grain by bunker weight by Sept. 20, up from 53.5 million tonnes a year ago and 79.4 million tonnes by the same date in 2009, Agriculture Ministry data said late on Tuesday.
Grain has been harvested from 34.7 million hectares, or 79 percent of the harvesting area, a ministry statement said.
Corn fungus adds to hard year for U.S. farmers
OVERLAND PARK, Kan., Sept 20 (Reuters) - Corn farmers in some parts of the U.S. Plains are finding their newly harvested crop has to be heavily discounted or cannot be sold at all due to the presence of a vicious fungus that makes the corn dangerous to eat. The culprit is "aflatoxin" - toxins produced by a fungus that can harm and possibly kill livestock and are considered carcinogenic to animals and humans.
France says aid impasse could spark EU food crisis
BRUSSELS, Sept 20 (Reuters) - France warned Germany and other countries on Tuesday that they risked provoking a food crisis in Europe because of their opposition to an EU-funded food aid scheme for the bloc's poorest citizens.
"In the current economic crisis, this programme is proof of the European principle of solidartity. It would be unacceptable for Europe to abandon its most vulnerable citizens," French President Nicolas Sarkozy said in a statement.
Dry Argentine weather fuels fight for crop acreage
BUENOS AIRES, Sept 20 (Reuters) - Dry weather that is delaying corn plantings in the world's No. 2 exporter, Argentina, could force some farmers to turn over more land to later-planted soybeans instead.
Growers in the South American country recently started sowing 2011/12 corn, but parched fields are slowing their progress, leading industry analysts to predict some will hold off and plant more lucrative soy toward the end of the year.
Not much rain relief for drought-stricken U.S. Plains
CHICAGO, Sept 20 (Reuters) - Only minor rainfall was expected this week in the drought-stricken U.S. Plains, leading to even more worries about the fate of seeding the 2012 hard red winter wheat crop, an agricultural meteorologist said Tuesday.
"A few light showers in northwest Texas and most of Oklahoma Wednesday through Thursday, but only about a third of an inch," predicted Don Keeney, meteorologist with MDA EarthSat Weather.
Rice (Source: CME)
US rice futures finish weaker under pressure from losses in wheat and corn markets. Losses in wheat, in particular, weigh on rice because both grains are global food staples. Additional pressure stems from forecasts for increased output from Pakistan, an analyst says. The country's exports are seen up 11% at 4M tons, according to the Rice Exporters' Association of Pakistan. That's 2.6% above USDA's last forecast for Pakistan's exports. CBOT November rice slides 5 1/2c to $17.14/hundredweight.
Rising Asian demand feeds corn, soybean bulls
NUSA DUA, Indonesia, Sept 21 (Reuters) - Robust Asian demand will keep intact a bullish outlook for corn and soybean in the long term, although current high prices have hit a ceiling as investors steer clear of economic uncertainty in developed nations, industry officials said this week.
Rising demand for feed in emerging economies, boosted by population and economic growth, will be the key driver for soybean and corn for years to come, as consumption swings away from staple grains towards meat, participants at an industry meeting in Indonesia said.
Indonesia's U.S. wheat imports set to fall
NUSA DUA, Indonesia, Sept 21 (Reuters) - United States wheat exports to top Asian importer Indonesia may fall next year due to increased competition and rising output from rivals Canada and Australia, a senior official at U.S. Wheat Associates said on Wednesday.
Last year, the United States shipped about 800,000 tonnes of wheat to Southeast Asia's biggest economy, Michael Spier, the association's vice president for South Asia, told Reuters at the SE Asia US Agricultural Co-operators Conference.
Russian wheat seeks to conquer fresh markets
HAMBURG/LONDON, Sept 20 (Reuters) - Russian wheat exporters aim to ramp up sales to nascent markets such as South America due to their cheap price edge, which may also give a boost to freight rates which are struggling with a ship glut.
Millions of tonnes of low-priced Russian wheat have surged onto global markets since Russia ended a near year-long grain export ban in July, sweeping aside competitors including those from Europe and the United States.
China to release 3.7 mln tonnes corn reserves, imports expected
BEIJING/SINGAPORE, Sept 20 (Reuters) - China will sell about 3.7 million tonnes of state corn reserves by November in a bid to cool record prices and take the heat off food inflation, which the government fears may fuel social unrest.
Tuesday's announcement by the State Grain Administration is likely to support corn prices, with some traders in the United States saying the world's second-biggest consumer of the grain was asking about buying up to 5 million tonnes of U.S. corn.
China to consume 15-20 mln T wheat for feed -Canada wheat body
SINGAPORE, Sept 20 (Reuters) - China's feed industry is expected to consume 15 million to 20 million tonnes of wheat in 2011/12 if corn prices remain high, a Canadian Wheat Board official based in Beijing said on Tuesday.
"We see a lot of switching from corn to wheat in China," Haiguang Shi, a vice president of the Canadian Wheat Board, told Reuters at a grains conference in Singapore. "Wheat prices are 15 percent below corn, so that's why a lot of feed mills are shifting to feed wheat."
Obama Administration Proposes Cutting Farm Subsidies (Source: CME)
The Obama administration is proposing to cut billions of dollars in agriculture subsidies as part of a $3 trillion deficit-reduction plan rolled out this week. First on the farm subsidy chopping block is a program that pays out about $5 billion per year to farmers. The Obama administration is proposing to cut $3 billion worth of these payments. Much of the "direct" payments that have been going to farmers since the 1990s now go to producers who don't need the money and may not even be planting crops on the acres, according to the White House plan. "Direct payments do not vary with prices, yields, or producers' farm incomes," the Obama administration said. "As a result, taxpayers continue to foot the bill for these payments to farmers who are experiencing record yields and prices; more than 50% of direct payments go to farmers with more than $100,000 in income."
About one million farmers on 260 million acres of land spread around 364 of 435 congressional districts do collect direct payments, according to the U.S. Department of Agriculture and the Environmental Working Group, a organization that wants to eliminate some farm subsidies and use the money to protect natural habitats. There is plenty of opposition, though, in Congress to slashing the direct payment subsidy program. An earlier, smaller proposal by the Obama administration to decrease the same direct payments was rejected by the U.S. House of Representatives. Lawmakers in June removed a provision from the fiscal year 2012 agriculture spending bill that sought to prevent farmers with an adjusted gross income of more than $250,000 from receiving direct payments. Farmers are now prevented from receiving those payments only if they have an AGI exceeding $750,000.
The Obama administration is also proposing to cut $8.3 billion worth of spending on subsidized crop insurance over a 10-year span. "Our Nation's farmers and agricultural bankers understand the value of this effective risk management program, and currently 83% of eligible program crop acres are enrolled in the program," according to the White House plan. "However, the program continues to be highly subsidized and costs the taxpayers approximately $8 billion a year to run: $2.3 billion per year for the private insurance companies to administer and underwrite the program and $5.7 billion per year in premium subsidies to the farmers." The plan would take most of the proposed cut to crop insurance--$3.7 billion over 10 years--by capping payments to crop insurance companies for their administrative expenses.
Ivory Coast Pres: Oil, Gas Revenue To Top Cocoa In 3-4 Years (Source: CME)
Ivory Coast's President Alassane Ouattara said that he expects revenue from the oil and gas sector to surpass income from cocoa over the next three to four years. The West African nation is the world's largest producer of cocoa, a raw ingredient in chocolate. "I think in three or four years, cocoa will not be the most important revenue," and oil and gas revenue will likely exceed that from cocoa, Ouattara told Dow Jones Newswires after a question-and-answer session at the Council on Foreign Relations in New York. Ouattara, a former International Monetary Fund official, took office in May after a violent half-year electoral stalemate with Laurent Gbagbo in which some 3,000 people were killed, according to the United Nations. Since assuming the presidency, Ouattara has said he is eager to increase investment in the country's small hydrocarbons sector. Last October, France's Total SA, signed an agreement with Ivory Coast's government to acquire a majority stake in an oil exploration license there.
Cotton Extends Longest Slump Since July as Debt Woes Erode Demand Outlook (Source: Bloomberg)
Cotton futures fell for the fifth straight session, heading for the longest slump since July, on signs that slowing economic growth will curb demand for supplies from the U.S., the world’s largest exporter. The debt crisis in Europe and political squabbling over how to prevent contagion are raising concern that the risk of defaults by governments is increasing, the International Monetary Fund said today. The MSCI World Index of equities fell as much as 1 percent. Before today, cotton futures plunged 52 percent from a record in March. “A lot of people are worried about demand destruction” as the economic crisis worsens in Europe, Fain Shaffer, the president of Infinity Trading Corp., in Medford, Oregon, said in a telephone interview. “There won’t be as much need for as much cotton.”
ICE sugar, cocoa little changed, coffee lower
LONDON, Sept 21 (Reuters) - ICE raw sugar and cocoa futures were little changed in early trade with both markets consolidating after recent setbacks while arabica coffee prices eased.
Raw sugar futures on ICE were little changed in early trade with the market still consolidating after a steep setback late last week.
Pakistan not to import sugar despite floods-officials
ISLAMABAD, Sept 21 (Reuters) - Pakistan does not need to import sugar this year despite minor losses to sugarcane crop by floods in the country's south, officials and traders said on Wednesday, with sufficient stocks available to meet domestic demands.
"There is no need to import sugar this year, import is out of question," Javed Kayani, chairman Pakistan Sugar Mills Association, told Reuters.
South Asia floods spare crops but Pakistan cotton hit
NEW DELHI/ISLAMABAD, Sept 20 (Reuters) - Seasonal floods across South Asia have largely spared summer crops this year, helping meet output targets for key rice and cane harvests, but Pakistan could import more cotton after losing about two million bales of the fibre to rains.
Shipments from a region that is among the world's top producers of grain, sugar and oilseeds will reduce price volatility and bring relief to several Asian governments trying to combat food-led inflation.
Indonesia Sulawesi Aug cocoa exports drop 76.7 pct y/y
JAKARTA, Sept 21 (Reuters) - Indonesia's cocoa bean exports from the main growing island of Sulawesi continued to drop in August to 8,421.50 tonnes from 36,167.56 tonnes a year ago, or 76.7 percent, industry data showed on Wednesday.
Indonesia is the world's third largest cocoa producer after Ivory Coast and Ghana.
Centam, Mexico, Colombia coffee exports rise in Aug
MEXICO CITY, Sept 20 (Reuters) - Coffee exports from Central America, Mexico, Colombia, Peru and the Dominican Republic rose 12 percent to 24.7 million 60-kg bags in October through August from the prior harvest, Guatemalan growers' group Anacafe said Tuesday.
The 2010/11 coffee harvesting season will come to a close next month.
Indonesia says Cargill to invest in cocoa grinding
JAKARTA, Sept 20 (Reuters) - U.S. agribusiness giant Cargill [CARG.UL] plans to invest 1 trillion rupiah ($113 million) to set up a cocoa grinding plant in Indonesia, a local government official said on Tuesday.
Cargill, which has said it is looking to expand its cocoa operations in emerging markets, plans to start operating a 65-70,000 tonnes a year plant in June 2103 in cocoa-producing southern Sulawesi, the official said.
India extends sugar stock limits for two months-minister
NEW DELHI, Sept 20 (Reuters) - India has extended for two months the limit up to which traders can stock sugar, a minister said on Tuesday, to avoid any possibility of rise in local prices during the festival season when demand peaks.
Traders can not hold more than 500 tonnes of sugar and that limit was to expire at the end of this month, Science and Technology Minister Vilasrao Deshmukh told reporters.
Colombia's coal industry calls for more coordination
BOGOTA, Sept 20 (Reuters) - Colombia's coal industry on Tuesday called on the new energy and environment ministers to improve their coordination of the fast-growing but increasingly criticized mining industry.
Colombia's oil and mining boom has created an unprecedented number of mining and environmental requests, straining institutions at a time when Latin America's No. 4 oil producer is trying to balance the environment and commodity extraction.
Colombia's Drummond sees 2011 coal output up 14 pct
BOGOTA, Sept 20 (Reuters) - Colombia's second largest coal exporter, Drummond, expects production to shoot up nearly 14 percent to 25 million tonnes in 2011 versus last year, the company's local president said on Tuesday.
Colombia, the world's No. 4 coal exporter, is looking to nearly double production of the material over the coming years, and expansion projects by Drummond, and the country's top producer Cerrejon, are seen as key to achieving that goal.
Australia cuts coal output forecasts as recovery drags
SYDNEY, Sept 20 (Reuters) - Australia cut its forecast for coking coal production in fiscal 2012 as recovery from natural disasters takes longer than expected but lifted its projection for iron ore production a touch.
The world's top coking coal and iron ore exporter lowered its forecast for the production of metallurgical coal, a key steelmaking material, by 6 percent to 161 million tonnes from its June forecast and cut its export forecast by 5 percent to 156 million tonnes.
Euro Coal-Prices dip $1/T with oil
LONDON, Sept 19 (Reuters) - Prompt physical coal prices fell again on Monday by 50 U.S. cents to $1.00 a tonne in line with oil's drop but overall the market continued to look fairly stable, utilities and traders said.
Oil fell more than 2 percent on Monday as mounting concern over the euro zone debt crisis exacerbated investor fears about the demand outlook for commodities.
S.Korea LNG could surge 40 pct by 2024 - GS Caltex
SINGAPORE, Sept 21 (Reuters) - South Korean demand for liquefied natural gas (LNG) could surge nearly 40 percent in the next decade due to rising consumer and industrial needs in Asia's fourth largest economy, a senior industry official said on Wednesday.
South Korea is the world's second biggest LNG importer after Japan, and its demand for LNG could surge as high as 44 million tonnes within 13 years, surpassing government expectations for imports to remain relatively steady at around 34 million tonnes.
Brent creeps up ahead of Fed, economy weighs
LONDON, Sept 21 (Reuters) - Brent crude futures pushed slightly higher on Wednesday but moves were muted as investors awaited a U.S. Federal Reserve policy meeting in which the bank is expected to announce further steps to stimulate the economy.
"There's set to be weaker growth as shown by the IMF which points to lower oil demand and production in Libya is coming on stream faster than expected," Christophe Barret, analyst at Credit Agricole Corporate & Investment Bank said.
Oil downside risk rises as economic outlook darkens
LONDON, Sept 20 (Reuters) - A series of supply squeezes have helped keep oil strong this year but some of them have been short-term factors and could give way to longer-term weakness as the outlook for the world economy and global fuel demand dims.
The uprising against Muammar Gaddafi in Libya, production problems in the UK and Norwegian North Sea, lower supplies from Russia, central Asia, Nigeria and Angola have all cut supplies, especially of high quality, light, low sulphur crude oil.
Crude Declines for Second Day After Fed Sees Downside Risks to Economy (Source: Bloomberg)
Oil fell for a second day in New York as investors speculated that fuel demand will falter after the Federal Reserve said there are “significant downside risks” to the U.S. economic outlook in the world’s biggest crude-consuming nation. Futures slipped as much as 1.3 percent after dropping 1.2 percent yesterday. The Fed announced plans to buy $400 billion of long-term debt in an attempt to keep the economy from relapsing into a recession. London-traded Brent oil’s premium to U.S. prices widened. Crude for November delivery dropped as much as $1.11 to $84.81 a barrel in electronic trading on the New York Mercantile Exchange and was at $84.90 at 8:50 a.m. Sydney time. The contract yesterday fell $1 to $85.92. Prices are 14 percent higher the past year.
Iron Ore-China steel snaps 8-day slide, outlook shaky
MANILA, Sept 21 (Reuters) - Shanghai rebar steel futures rebounded on Wednesday after losing more than 4 percent in the past eight sessions, but the modest gain suggests the outlook for China's steel demand remained shaky, limiting buying interest in iron ore.
Tighter credit in China, the world's biggest steel producer and consumer, is slowing demand for steel and also restraining mills from replenishing stocks of iron ore, a key raw material.
Europe steel production: the boom is over
LONDON, Sept 20 (Reuters) - European steelmakers will be forced to cut crude steel capacity utilisation and may idle some furnaces in the next few months, after producing at high levels in the first half this year, as weaker demand, prices and destocking hit their sales.
Last spring, crude steel production in Europe was accelerating and it seemed that the industry was slowly but surely sailing back towards record levels last hit in 2008.
Global crude steel output hits lowest point in 2011
LONDON, Sept 20 (Reuters) - Daily global crude steel production hit its lowest point in 2011, due to a seasonal slowdown and as steelmakers started to cut production to respond to softer demand for steel.
The world's steel production fell to 124.589 million tonnes in August from 127.512 million in July, its lowest daily production rate since December 2010, according to a Reuters calculation based on the revised data released by the World Steel Association on Tuesday.
Australia lifts iron ore projections, coal lags
SYDNEY, Sept 20 (Reuters) - Australia lifted its projections for iron ore output and exports on Tuesday, defying concerns over the global economy as Asian demand roars along, though it cut its forecast for coal output on a slow recovery from natural disasters.
Exports of iron ore, a key steelmaking ingredient, are seen at 449 million tonnes -- 40 percent of global trade -- in fiscal 2012, a 3 percent increase from an earlier projection and a 10 percent rise on the previous year, as Japanese and Chinese steel output expands rapidly.
Gold Surge Fuels Inflation, Vexes Asia Officials (Source: Bloomberg)
The surging price of gold is fueling inflation from India to Indonesia and forcing statisticians to decide whether jewelry made of the metal still belongs in consumer-price indexes. In South Korea, gold rings will be dropped from the inflation basket for the first time since 1975 as part of a scheduled reweighting in December, Bang Tae Kyoung, deputy director of the statistics agency, said in an phone interview from Daejeon. “People are now buying gold mostly for investment purposes, and so it should be classified as an asset, rather than spending,” Bang said. Gold has climbed 27 percent this year as turbulence in equities and currencies, money printing by central banks, and a decade-long bull market in the metal lure investors to an alternative store of value. Bullion vaults such as the Swiss Precious Metals facility in Singapore are nearing capacity, and Tiberius Asset Management AG warns that gold is in the final, overheated phase of an upswing.
Gold Declines as Dollar Jumps on Fed’s Bond Plan to Bolster U.S. Economy (Source: Bloomberg)
Gold prices fell as the dollar’s rally eroded demand for the metal as an alternative investment after the Federal Reserve said it will increase holdings of longer-maturity Treasuries in a bid to bolster the U.S. economy. Gold for immediate delivery fell $18.40, or 1 percent, to $1,785.23 an ounce at 4:04 p.m. New York time after dropping as much as 1.3 percent. At 2:20 p.m., just before the Fed announcement, the metal traded at $1,805. The greenback rose as much 0.9 percent against a basket of major currencies, erasing earlier losses. The Fed plans to buy $400 billion of bonds with maturities of six to 30 years through June while selling an equal amount of debt maturing in three years or less. That “should put downward pressure on longer-term interest rates and help make broader financial conditions more accommodative,” the Federal Open Market Committee said in a statement.
Baltic index rebounds, set to stay volatile
LONDON, Sept 20 (Reuters) - The Baltic Exchange's main sea freight index, which tracks rates to ship dry commodities, turned positive on Tuesday, helped by light cargo business with expectations for more volatility ahead.
The overall index rose 1.76 percent or 31 points to 1,795 points after falling for three previous sessions. The index had risen to its highest level in nearly nine months earlier last week.
Ship insurers backing armed guards as piracy grows
PARIS, Sept 20 (Reuters) - More ship insurers are backing the use of private armed guards on merchant vessels at sea to combat Somali piracy as attacks and the resulting costs are set to rise in coming weeks, industry officials said on Tuesday.
Pirate attacks on oil tankers and other ships are costing the world economy billions of dollars a year and navies have struggled to combat the menace, especially in the vast Indian Ocean. Seaborne gangs are set to ramp up attacks in the area after a monsoon abates.
Dry bulk ship market to stay weak into 2013
PARIS, Sept 20 (Reuters) - The global dry bulk freight market is expected to stay weak throughout 2012 and into 2013 due to an oversupply of ships, a senior executive of major ship brokerage Braemar Seascope said on Tuesday.
The industry has been struggling with a supply glut that has outpaced demand for commodities such as coal and iron ore.
Ship owners went on an ordering spree before economic turmoil in 2008 and have been hit this year by the pace of ship deliveries, which have stepped up in recent months.
US corn futures finish lower under spillover pressure from steep losses in the soybean market. Selling expands to the grains as the oilseed reaches a six-week low. Corn and wheat had been higher earlier in the session but "threw in the towel when the beans started to" tumble, says Mike Zuzolo of Global Commodity Analytics and Consulting. Commodity funds were sellers in all three markets, unloading an estimated 5,000 corn and 9,000 soybean contracts. CBOT December corn drops 4 1/2c to $6.85 3/4 a bushel.
Wheat (Source: CME)
US wheat futures finish at a 6-week low, pulling back from early gains on increasing jitters about poor demand. Export sales have been weak recently as Russian wheat is lower-priced than US wheat on the global market. Egypt, the world's top buyer, issued a tender for wheat and will likely continue to buy from Russia, traders say. Concerns about the shaky global economy add to worries about commodity demand. CBOT December wheat slips 8c to $6.66 3/4 a bushel, KCBT December drops 4 1/2c to $7.60 1/2 and MGEX December slides2c to $8.40 1/2.
Wheat Falls to Two-Month Low as Demand May Ebb on Global Economic Concerns (Source: Bloomberg)
Wheat futures fell to a two-month low on concern that the global economy will falter, diminishing demand for commodities. After Chicago grain markets closed, the U.S. Federal Reserve said there are “significant downside risks” to the economic outlook. The Standard & Poor’s 500 Index dropped as much as 3 percent, and the Thomson Reuters/Jefferies CRB Index of raw materials slid 1.1 percent. “The economy, not only in the U.S., but the global economy continues to struggle,” Jerod Leman, a broker at Wellington Commodities in Carmel, Indiana, said in a telephone interview. “There is concern that we’ll slip back into recession, and that would slow down demand for commodities.”
U.S. wheat, soy tick up; corn awaits China's move
SINGAPORE, Sept 21 (Reuters) - U.S. wheat and soy futures ticked higher despite escalating worries about the global economy and the IMF warning the United States could slip back into recession, while corn hardly moved as dealers awaited a possible purchase by China.
Under normal circumstances we would expect prices to rise. But what we have right now in terms of the global economic environment is anything but a normal environment, and that's what's pressuring prices lower," said Luke Mathews, commodities strategist at Commonwealth Bank of Australia in Sydney.
India rice court case withdrawn, exports seen unchanged
NEW DELHI, Sept 21 (Reuters) - A court case seeking to stop the exports of one million tonnes of rice from India has been withdrawn, the chief of the trade body which filed the petition said on Wednesday, but this may not lead to the consignment being shipped.
As a result exports of common rice from India will remain for now at 2 million tonnes announced by the food minister this month.
Russian grain harvest 81.1 million tonnes so far
MOSCOW, Sept 21 (Reuters) - Russia harvested 81.1 million tonnes of grain by bunker weight by Sept. 20, up from 53.5 million tonnes a year ago and 79.4 million tonnes by the same date in 2009, Agriculture Ministry data said late on Tuesday.
Grain has been harvested from 34.7 million hectares, or 79 percent of the harvesting area, a ministry statement said.
Corn fungus adds to hard year for U.S. farmers
OVERLAND PARK, Kan., Sept 20 (Reuters) - Corn farmers in some parts of the U.S. Plains are finding their newly harvested crop has to be heavily discounted or cannot be sold at all due to the presence of a vicious fungus that makes the corn dangerous to eat. The culprit is "aflatoxin" - toxins produced by a fungus that can harm and possibly kill livestock and are considered carcinogenic to animals and humans.
France says aid impasse could spark EU food crisis
BRUSSELS, Sept 20 (Reuters) - France warned Germany and other countries on Tuesday that they risked provoking a food crisis in Europe because of their opposition to an EU-funded food aid scheme for the bloc's poorest citizens.
"In the current economic crisis, this programme is proof of the European principle of solidartity. It would be unacceptable for Europe to abandon its most vulnerable citizens," French President Nicolas Sarkozy said in a statement.
Dry Argentine weather fuels fight for crop acreage
BUENOS AIRES, Sept 20 (Reuters) - Dry weather that is delaying corn plantings in the world's No. 2 exporter, Argentina, could force some farmers to turn over more land to later-planted soybeans instead.
Growers in the South American country recently started sowing 2011/12 corn, but parched fields are slowing their progress, leading industry analysts to predict some will hold off and plant more lucrative soy toward the end of the year.
Not much rain relief for drought-stricken U.S. Plains
CHICAGO, Sept 20 (Reuters) - Only minor rainfall was expected this week in the drought-stricken U.S. Plains, leading to even more worries about the fate of seeding the 2012 hard red winter wheat crop, an agricultural meteorologist said Tuesday.
"A few light showers in northwest Texas and most of Oklahoma Wednesday through Thursday, but only about a third of an inch," predicted Don Keeney, meteorologist with MDA EarthSat Weather.
Rice (Source: CME)
US rice futures finish weaker under pressure from losses in wheat and corn markets. Losses in wheat, in particular, weigh on rice because both grains are global food staples. Additional pressure stems from forecasts for increased output from Pakistan, an analyst says. The country's exports are seen up 11% at 4M tons, according to the Rice Exporters' Association of Pakistan. That's 2.6% above USDA's last forecast for Pakistan's exports. CBOT November rice slides 5 1/2c to $17.14/hundredweight.
Rising Asian demand feeds corn, soybean bulls
NUSA DUA, Indonesia, Sept 21 (Reuters) - Robust Asian demand will keep intact a bullish outlook for corn and soybean in the long term, although current high prices have hit a ceiling as investors steer clear of economic uncertainty in developed nations, industry officials said this week.
Rising demand for feed in emerging economies, boosted by population and economic growth, will be the key driver for soybean and corn for years to come, as consumption swings away from staple grains towards meat, participants at an industry meeting in Indonesia said.
Indonesia's U.S. wheat imports set to fall
NUSA DUA, Indonesia, Sept 21 (Reuters) - United States wheat exports to top Asian importer Indonesia may fall next year due to increased competition and rising output from rivals Canada and Australia, a senior official at U.S. Wheat Associates said on Wednesday.
Last year, the United States shipped about 800,000 tonnes of wheat to Southeast Asia's biggest economy, Michael Spier, the association's vice president for South Asia, told Reuters at the SE Asia US Agricultural Co-operators Conference.
Russian wheat seeks to conquer fresh markets
HAMBURG/LONDON, Sept 20 (Reuters) - Russian wheat exporters aim to ramp up sales to nascent markets such as South America due to their cheap price edge, which may also give a boost to freight rates which are struggling with a ship glut.
Millions of tonnes of low-priced Russian wheat have surged onto global markets since Russia ended a near year-long grain export ban in July, sweeping aside competitors including those from Europe and the United States.
China to release 3.7 mln tonnes corn reserves, imports expected
BEIJING/SINGAPORE, Sept 20 (Reuters) - China will sell about 3.7 million tonnes of state corn reserves by November in a bid to cool record prices and take the heat off food inflation, which the government fears may fuel social unrest.
Tuesday's announcement by the State Grain Administration is likely to support corn prices, with some traders in the United States saying the world's second-biggest consumer of the grain was asking about buying up to 5 million tonnes of U.S. corn.
China to consume 15-20 mln T wheat for feed -Canada wheat body
SINGAPORE, Sept 20 (Reuters) - China's feed industry is expected to consume 15 million to 20 million tonnes of wheat in 2011/12 if corn prices remain high, a Canadian Wheat Board official based in Beijing said on Tuesday.
"We see a lot of switching from corn to wheat in China," Haiguang Shi, a vice president of the Canadian Wheat Board, told Reuters at a grains conference in Singapore. "Wheat prices are 15 percent below corn, so that's why a lot of feed mills are shifting to feed wheat."
Obama Administration Proposes Cutting Farm Subsidies (Source: CME)
The Obama administration is proposing to cut billions of dollars in agriculture subsidies as part of a $3 trillion deficit-reduction plan rolled out this week. First on the farm subsidy chopping block is a program that pays out about $5 billion per year to farmers. The Obama administration is proposing to cut $3 billion worth of these payments. Much of the "direct" payments that have been going to farmers since the 1990s now go to producers who don't need the money and may not even be planting crops on the acres, according to the White House plan. "Direct payments do not vary with prices, yields, or producers' farm incomes," the Obama administration said. "As a result, taxpayers continue to foot the bill for these payments to farmers who are experiencing record yields and prices; more than 50% of direct payments go to farmers with more than $100,000 in income."
About one million farmers on 260 million acres of land spread around 364 of 435 congressional districts do collect direct payments, according to the U.S. Department of Agriculture and the Environmental Working Group, a organization that wants to eliminate some farm subsidies and use the money to protect natural habitats. There is plenty of opposition, though, in Congress to slashing the direct payment subsidy program. An earlier, smaller proposal by the Obama administration to decrease the same direct payments was rejected by the U.S. House of Representatives. Lawmakers in June removed a provision from the fiscal year 2012 agriculture spending bill that sought to prevent farmers with an adjusted gross income of more than $250,000 from receiving direct payments. Farmers are now prevented from receiving those payments only if they have an AGI exceeding $750,000.
The Obama administration is also proposing to cut $8.3 billion worth of spending on subsidized crop insurance over a 10-year span. "Our Nation's farmers and agricultural bankers understand the value of this effective risk management program, and currently 83% of eligible program crop acres are enrolled in the program," according to the White House plan. "However, the program continues to be highly subsidized and costs the taxpayers approximately $8 billion a year to run: $2.3 billion per year for the private insurance companies to administer and underwrite the program and $5.7 billion per year in premium subsidies to the farmers." The plan would take most of the proposed cut to crop insurance--$3.7 billion over 10 years--by capping payments to crop insurance companies for their administrative expenses.
Ivory Coast Pres: Oil, Gas Revenue To Top Cocoa In 3-4 Years (Source: CME)
Ivory Coast's President Alassane Ouattara said that he expects revenue from the oil and gas sector to surpass income from cocoa over the next three to four years. The West African nation is the world's largest producer of cocoa, a raw ingredient in chocolate. "I think in three or four years, cocoa will not be the most important revenue," and oil and gas revenue will likely exceed that from cocoa, Ouattara told Dow Jones Newswires after a question-and-answer session at the Council on Foreign Relations in New York. Ouattara, a former International Monetary Fund official, took office in May after a violent half-year electoral stalemate with Laurent Gbagbo in which some 3,000 people were killed, according to the United Nations. Since assuming the presidency, Ouattara has said he is eager to increase investment in the country's small hydrocarbons sector. Last October, France's Total SA, signed an agreement with Ivory Coast's government to acquire a majority stake in an oil exploration license there.
Cotton Extends Longest Slump Since July as Debt Woes Erode Demand Outlook (Source: Bloomberg)
Cotton futures fell for the fifth straight session, heading for the longest slump since July, on signs that slowing economic growth will curb demand for supplies from the U.S., the world’s largest exporter. The debt crisis in Europe and political squabbling over how to prevent contagion are raising concern that the risk of defaults by governments is increasing, the International Monetary Fund said today. The MSCI World Index of equities fell as much as 1 percent. Before today, cotton futures plunged 52 percent from a record in March. “A lot of people are worried about demand destruction” as the economic crisis worsens in Europe, Fain Shaffer, the president of Infinity Trading Corp., in Medford, Oregon, said in a telephone interview. “There won’t be as much need for as much cotton.”
ICE sugar, cocoa little changed, coffee lower
LONDON, Sept 21 (Reuters) - ICE raw sugar and cocoa futures were little changed in early trade with both markets consolidating after recent setbacks while arabica coffee prices eased.
Raw sugar futures on ICE were little changed in early trade with the market still consolidating after a steep setback late last week.
Pakistan not to import sugar despite floods-officials
ISLAMABAD, Sept 21 (Reuters) - Pakistan does not need to import sugar this year despite minor losses to sugarcane crop by floods in the country's south, officials and traders said on Wednesday, with sufficient stocks available to meet domestic demands.
"There is no need to import sugar this year, import is out of question," Javed Kayani, chairman Pakistan Sugar Mills Association, told Reuters.
South Asia floods spare crops but Pakistan cotton hit
NEW DELHI/ISLAMABAD, Sept 20 (Reuters) - Seasonal floods across South Asia have largely spared summer crops this year, helping meet output targets for key rice and cane harvests, but Pakistan could import more cotton after losing about two million bales of the fibre to rains.
Shipments from a region that is among the world's top producers of grain, sugar and oilseeds will reduce price volatility and bring relief to several Asian governments trying to combat food-led inflation.
Indonesia Sulawesi Aug cocoa exports drop 76.7 pct y/y
JAKARTA, Sept 21 (Reuters) - Indonesia's cocoa bean exports from the main growing island of Sulawesi continued to drop in August to 8,421.50 tonnes from 36,167.56 tonnes a year ago, or 76.7 percent, industry data showed on Wednesday.
Indonesia is the world's third largest cocoa producer after Ivory Coast and Ghana.
Centam, Mexico, Colombia coffee exports rise in Aug
MEXICO CITY, Sept 20 (Reuters) - Coffee exports from Central America, Mexico, Colombia, Peru and the Dominican Republic rose 12 percent to 24.7 million 60-kg bags in October through August from the prior harvest, Guatemalan growers' group Anacafe said Tuesday.
The 2010/11 coffee harvesting season will come to a close next month.
Indonesia says Cargill to invest in cocoa grinding
JAKARTA, Sept 20 (Reuters) - U.S. agribusiness giant Cargill [CARG.UL] plans to invest 1 trillion rupiah ($113 million) to set up a cocoa grinding plant in Indonesia, a local government official said on Tuesday.
Cargill, which has said it is looking to expand its cocoa operations in emerging markets, plans to start operating a 65-70,000 tonnes a year plant in June 2103 in cocoa-producing southern Sulawesi, the official said.
India extends sugar stock limits for two months-minister
NEW DELHI, Sept 20 (Reuters) - India has extended for two months the limit up to which traders can stock sugar, a minister said on Tuesday, to avoid any possibility of rise in local prices during the festival season when demand peaks.
Traders can not hold more than 500 tonnes of sugar and that limit was to expire at the end of this month, Science and Technology Minister Vilasrao Deshmukh told reporters.
Colombia's coal industry calls for more coordination
BOGOTA, Sept 20 (Reuters) - Colombia's coal industry on Tuesday called on the new energy and environment ministers to improve their coordination of the fast-growing but increasingly criticized mining industry.
Colombia's oil and mining boom has created an unprecedented number of mining and environmental requests, straining institutions at a time when Latin America's No. 4 oil producer is trying to balance the environment and commodity extraction.
Colombia's Drummond sees 2011 coal output up 14 pct
BOGOTA, Sept 20 (Reuters) - Colombia's second largest coal exporter, Drummond, expects production to shoot up nearly 14 percent to 25 million tonnes in 2011 versus last year, the company's local president said on Tuesday.
Colombia, the world's No. 4 coal exporter, is looking to nearly double production of the material over the coming years, and expansion projects by Drummond, and the country's top producer Cerrejon, are seen as key to achieving that goal.
Australia cuts coal output forecasts as recovery drags
SYDNEY, Sept 20 (Reuters) - Australia cut its forecast for coking coal production in fiscal 2012 as recovery from natural disasters takes longer than expected but lifted its projection for iron ore production a touch.
The world's top coking coal and iron ore exporter lowered its forecast for the production of metallurgical coal, a key steelmaking material, by 6 percent to 161 million tonnes from its June forecast and cut its export forecast by 5 percent to 156 million tonnes.
Euro Coal-Prices dip $1/T with oil
LONDON, Sept 19 (Reuters) - Prompt physical coal prices fell again on Monday by 50 U.S. cents to $1.00 a tonne in line with oil's drop but overall the market continued to look fairly stable, utilities and traders said.
Oil fell more than 2 percent on Monday as mounting concern over the euro zone debt crisis exacerbated investor fears about the demand outlook for commodities.
S.Korea LNG could surge 40 pct by 2024 - GS Caltex
SINGAPORE, Sept 21 (Reuters) - South Korean demand for liquefied natural gas (LNG) could surge nearly 40 percent in the next decade due to rising consumer and industrial needs in Asia's fourth largest economy, a senior industry official said on Wednesday.
South Korea is the world's second biggest LNG importer after Japan, and its demand for LNG could surge as high as 44 million tonnes within 13 years, surpassing government expectations for imports to remain relatively steady at around 34 million tonnes.
Brent creeps up ahead of Fed, economy weighs
LONDON, Sept 21 (Reuters) - Brent crude futures pushed slightly higher on Wednesday but moves were muted as investors awaited a U.S. Federal Reserve policy meeting in which the bank is expected to announce further steps to stimulate the economy.
"There's set to be weaker growth as shown by the IMF which points to lower oil demand and production in Libya is coming on stream faster than expected," Christophe Barret, analyst at Credit Agricole Corporate & Investment Bank said.
Oil downside risk rises as economic outlook darkens
LONDON, Sept 20 (Reuters) - A series of supply squeezes have helped keep oil strong this year but some of them have been short-term factors and could give way to longer-term weakness as the outlook for the world economy and global fuel demand dims.
The uprising against Muammar Gaddafi in Libya, production problems in the UK and Norwegian North Sea, lower supplies from Russia, central Asia, Nigeria and Angola have all cut supplies, especially of high quality, light, low sulphur crude oil.
Crude Declines for Second Day After Fed Sees Downside Risks to Economy (Source: Bloomberg)
Oil fell for a second day in New York as investors speculated that fuel demand will falter after the Federal Reserve said there are “significant downside risks” to the U.S. economic outlook in the world’s biggest crude-consuming nation. Futures slipped as much as 1.3 percent after dropping 1.2 percent yesterday. The Fed announced plans to buy $400 billion of long-term debt in an attempt to keep the economy from relapsing into a recession. London-traded Brent oil’s premium to U.S. prices widened. Crude for November delivery dropped as much as $1.11 to $84.81 a barrel in electronic trading on the New York Mercantile Exchange and was at $84.90 at 8:50 a.m. Sydney time. The contract yesterday fell $1 to $85.92. Prices are 14 percent higher the past year.
Iron Ore-China steel snaps 8-day slide, outlook shaky
MANILA, Sept 21 (Reuters) - Shanghai rebar steel futures rebounded on Wednesday after losing more than 4 percent in the past eight sessions, but the modest gain suggests the outlook for China's steel demand remained shaky, limiting buying interest in iron ore.
Tighter credit in China, the world's biggest steel producer and consumer, is slowing demand for steel and also restraining mills from replenishing stocks of iron ore, a key raw material.
Europe steel production: the boom is over
LONDON, Sept 20 (Reuters) - European steelmakers will be forced to cut crude steel capacity utilisation and may idle some furnaces in the next few months, after producing at high levels in the first half this year, as weaker demand, prices and destocking hit their sales.
Last spring, crude steel production in Europe was accelerating and it seemed that the industry was slowly but surely sailing back towards record levels last hit in 2008.
Global crude steel output hits lowest point in 2011
LONDON, Sept 20 (Reuters) - Daily global crude steel production hit its lowest point in 2011, due to a seasonal slowdown and as steelmakers started to cut production to respond to softer demand for steel.
The world's steel production fell to 124.589 million tonnes in August from 127.512 million in July, its lowest daily production rate since December 2010, according to a Reuters calculation based on the revised data released by the World Steel Association on Tuesday.
Australia lifts iron ore projections, coal lags
SYDNEY, Sept 20 (Reuters) - Australia lifted its projections for iron ore output and exports on Tuesday, defying concerns over the global economy as Asian demand roars along, though it cut its forecast for coal output on a slow recovery from natural disasters.
Exports of iron ore, a key steelmaking ingredient, are seen at 449 million tonnes -- 40 percent of global trade -- in fiscal 2012, a 3 percent increase from an earlier projection and a 10 percent rise on the previous year, as Japanese and Chinese steel output expands rapidly.
Gold Surge Fuels Inflation, Vexes Asia Officials (Source: Bloomberg)
The surging price of gold is fueling inflation from India to Indonesia and forcing statisticians to decide whether jewelry made of the metal still belongs in consumer-price indexes. In South Korea, gold rings will be dropped from the inflation basket for the first time since 1975 as part of a scheduled reweighting in December, Bang Tae Kyoung, deputy director of the statistics agency, said in an phone interview from Daejeon. “People are now buying gold mostly for investment purposes, and so it should be classified as an asset, rather than spending,” Bang said. Gold has climbed 27 percent this year as turbulence in equities and currencies, money printing by central banks, and a decade-long bull market in the metal lure investors to an alternative store of value. Bullion vaults such as the Swiss Precious Metals facility in Singapore are nearing capacity, and Tiberius Asset Management AG warns that gold is in the final, overheated phase of an upswing.
Gold Declines as Dollar Jumps on Fed’s Bond Plan to Bolster U.S. Economy (Source: Bloomberg)
Gold prices fell as the dollar’s rally eroded demand for the metal as an alternative investment after the Federal Reserve said it will increase holdings of longer-maturity Treasuries in a bid to bolster the U.S. economy. Gold for immediate delivery fell $18.40, or 1 percent, to $1,785.23 an ounce at 4:04 p.m. New York time after dropping as much as 1.3 percent. At 2:20 p.m., just before the Fed announcement, the metal traded at $1,805. The greenback rose as much 0.9 percent against a basket of major currencies, erasing earlier losses. The Fed plans to buy $400 billion of bonds with maturities of six to 30 years through June while selling an equal amount of debt maturing in three years or less. That “should put downward pressure on longer-term interest rates and help make broader financial conditions more accommodative,” the Federal Open Market Committee said in a statement.
Baltic index rebounds, set to stay volatile
LONDON, Sept 20 (Reuters) - The Baltic Exchange's main sea freight index, which tracks rates to ship dry commodities, turned positive on Tuesday, helped by light cargo business with expectations for more volatility ahead.
The overall index rose 1.76 percent or 31 points to 1,795 points after falling for three previous sessions. The index had risen to its highest level in nearly nine months earlier last week.
Ship insurers backing armed guards as piracy grows
PARIS, Sept 20 (Reuters) - More ship insurers are backing the use of private armed guards on merchant vessels at sea to combat Somali piracy as attacks and the resulting costs are set to rise in coming weeks, industry officials said on Tuesday.
Pirate attacks on oil tankers and other ships are costing the world economy billions of dollars a year and navies have struggled to combat the menace, especially in the vast Indian Ocean. Seaborne gangs are set to ramp up attacks in the area after a monsoon abates.
Dry bulk ship market to stay weak into 2013
PARIS, Sept 20 (Reuters) - The global dry bulk freight market is expected to stay weak throughout 2012 and into 2013 due to an oversupply of ships, a senior executive of major ship brokerage Braemar Seascope said on Tuesday.
The industry has been struggling with a supply glut that has outpaced demand for commodities such as coal and iron ore.
Ship owners went on an ordering spree before economic turmoil in 2008 and have been hit this year by the pace of ship deliveries, which have stepped up in recent months.
20110922 0927 Soy Oil & Palm Oil Related News.
Soybeans (Source: CME)
US soybean futures stumble to 6-week lows, fueled by investor selling amid the absence of fresh demand to buoy prices. The combination of seasonal harvest pressure and fears of slumping demand amid a tenuous global economy attracted sellers to the market, says Chad Henderson at Prime Ag Consultants. Traders were also reducing risk exposure ahead of the announcement of Fed action after the FOMC meeting. CBOT November soy dropped 17 1/2c to $13.20 1/2 a bushel.
Soybean Meal/Oil (Source: CME)
Soy-product futures fall in unison with soybeans, with soymeal like beans sliding to a 6-week lows. Meanwhile, traders unwinding long soymeal/short soyoil positions limited losses in soyoil. CBOT December soymeal dropped 1.7% to $344.20/short ton and December soyoil fell 0.5% to 55.34c/pound.
India Minister Favors Higher Import Tax On Refined Edible Oil (Source: CME)
India's food ministry is backing local refiners' demand for a higher import tax on refined edible oil to prevent cheap foreign supplies from flooding the market, and the food minister said he has already taken up the matter with the finance minister. The refiners are particularly worried about supplies from Indonesia, the biggest palm oil producer and exporter that recently cut its export tax on refined, bleached and deodorized palm olein in bulk to 8% from 15%. This has made importing palm olein cheaper than sourcing crude palm oil from abroad and processing it locally. India has an edible oil refining capacity of 20 million metric tons annually and it imports almost 80% of its edible oil requirement as crude oil. Higher imports of refined products will hurt local refiners.
"We are cautious and apprehensive about cheap imports," Food Minister K.V. Thomas told Dow Jones Newswires, two days ahead of an edible oil conference in Mumbai. "I have discussed it with the finance minister as the industry's demand for higher import duty is genuine." India, the world's top edible oil importer, levies a 7.5% tax on refined edible oils, and imports palm oil mostly from Indonesia and Malaysia. Thomas said he also favored the industry's demand for increasing the base value on which import tax is calculated. The base value is currently $484 a ton for refined palm oil, much lower than the market price of about $1,200 a ton. The government will aim to increase the production of oilseeds and the local refining capacity to help the country cut down on imports of refined oil, the minister said.
India's summer-sown oilseed production is set to rise in 2011-12 to 20.89 million tons from 20.84 million tons the previous year, but its edible oil imports is unlikely to fall because of growing consumption. India is expected to import 8.2 million-8.5 million tons this marketing year through October. The minister said his ministry isn't averse to increasing the curbs on oilmeal exports to improve local availability of cattle feed, following complaints by the local dairy and poultry sector. India's animal husbandry department has asked for raising the export tax on oilmeals to 20% from 10%. Thomas, however, ruled out the dairy industry's demand for banning oilmeal exports to help cut down costs for the sector, saying "we are against any ban on oilmeal exports."
Palm oil retreats on bleak global economic outlook
KUALA LUMPUR, Sept 21 (Reuters) - Malaysian palm oil fell as investors grew wary over attempts to resolve Europe's debt crisis and shore up the U.S. economy against a slide back into recession -- factors that can stall global commodity demand.
"When palm oil goes below 3,000 ringgit, there is no follow-through selling. When it goes above 3,000 ringgit there is no follow through buying. The keyword is caution," said a trader with a foreign brokerage in Malaysia.
Cargill to rebuild, expand N.Dakota oilseed plant
Sept 20 (Reuters) - U.S. agribusiness giant Cargill Inc said on Tuesday it is planning a $50 million-plus project to rebuild and expand its 30-year-old oilseed processing plant in West Fargo, North Dakota.
Construction is set to begin this fall with completion expected by the 2013 U.S. harvest, Cargill said.
Indian vegetable oils to resume rise -Oil World
HAMBURG, Sept 20 (Reuters) - India will import more vegetable oils in the new 2011/12 season, following an import drop in 2010/11, as domestic output cannot meet booming consumption, Hamburg-based oilseeds analysts Oil World forecast on Tuesday.
India's total vegetable oil imports in October 2011/September 2012 are likely to rise by 0.2-0.3 million tonnes on the year to 8.86 million tonnes after falling by 0.5 million tonnes in 2010/11, Oil World said.
US soybean futures stumble to 6-week lows, fueled by investor selling amid the absence of fresh demand to buoy prices. The combination of seasonal harvest pressure and fears of slumping demand amid a tenuous global economy attracted sellers to the market, says Chad Henderson at Prime Ag Consultants. Traders were also reducing risk exposure ahead of the announcement of Fed action after the FOMC meeting. CBOT November soy dropped 17 1/2c to $13.20 1/2 a bushel.
Soybean Meal/Oil (Source: CME)
Soy-product futures fall in unison with soybeans, with soymeal like beans sliding to a 6-week lows. Meanwhile, traders unwinding long soymeal/short soyoil positions limited losses in soyoil. CBOT December soymeal dropped 1.7% to $344.20/short ton and December soyoil fell 0.5% to 55.34c/pound.
India Minister Favors Higher Import Tax On Refined Edible Oil (Source: CME)
India's food ministry is backing local refiners' demand for a higher import tax on refined edible oil to prevent cheap foreign supplies from flooding the market, and the food minister said he has already taken up the matter with the finance minister. The refiners are particularly worried about supplies from Indonesia, the biggest palm oil producer and exporter that recently cut its export tax on refined, bleached and deodorized palm olein in bulk to 8% from 15%. This has made importing palm olein cheaper than sourcing crude palm oil from abroad and processing it locally. India has an edible oil refining capacity of 20 million metric tons annually and it imports almost 80% of its edible oil requirement as crude oil. Higher imports of refined products will hurt local refiners.
"We are cautious and apprehensive about cheap imports," Food Minister K.V. Thomas told Dow Jones Newswires, two days ahead of an edible oil conference in Mumbai. "I have discussed it with the finance minister as the industry's demand for higher import duty is genuine." India, the world's top edible oil importer, levies a 7.5% tax on refined edible oils, and imports palm oil mostly from Indonesia and Malaysia. Thomas said he also favored the industry's demand for increasing the base value on which import tax is calculated. The base value is currently $484 a ton for refined palm oil, much lower than the market price of about $1,200 a ton. The government will aim to increase the production of oilseeds and the local refining capacity to help the country cut down on imports of refined oil, the minister said.
India's summer-sown oilseed production is set to rise in 2011-12 to 20.89 million tons from 20.84 million tons the previous year, but its edible oil imports is unlikely to fall because of growing consumption. India is expected to import 8.2 million-8.5 million tons this marketing year through October. The minister said his ministry isn't averse to increasing the curbs on oilmeal exports to improve local availability of cattle feed, following complaints by the local dairy and poultry sector. India's animal husbandry department has asked for raising the export tax on oilmeals to 20% from 10%. Thomas, however, ruled out the dairy industry's demand for banning oilmeal exports to help cut down costs for the sector, saying "we are against any ban on oilmeal exports."
Palm oil retreats on bleak global economic outlook
KUALA LUMPUR, Sept 21 (Reuters) - Malaysian palm oil fell as investors grew wary over attempts to resolve Europe's debt crisis and shore up the U.S. economy against a slide back into recession -- factors that can stall global commodity demand.
"When palm oil goes below 3,000 ringgit, there is no follow-through selling. When it goes above 3,000 ringgit there is no follow through buying. The keyword is caution," said a trader with a foreign brokerage in Malaysia.
Cargill to rebuild, expand N.Dakota oilseed plant
Sept 20 (Reuters) - U.S. agribusiness giant Cargill Inc said on Tuesday it is planning a $50 million-plus project to rebuild and expand its 30-year-old oilseed processing plant in West Fargo, North Dakota.
Construction is set to begin this fall with completion expected by the 2013 U.S. harvest, Cargill said.
Indian vegetable oils to resume rise -Oil World
HAMBURG, Sept 20 (Reuters) - India will import more vegetable oils in the new 2011/12 season, following an import drop in 2010/11, as domestic output cannot meet booming consumption, Hamburg-based oilseeds analysts Oil World forecast on Tuesday.
India's total vegetable oil imports in October 2011/September 2012 are likely to rise by 0.2-0.3 million tonnes on the year to 8.86 million tonnes after falling by 0.5 million tonnes in 2010/11, Oil World said.
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