Jul 24

UN Alarmed Over Sharp Rise in Grain Prices (VOA, July 21, 2012):

A 20-percent spike in maize and wheat prices in just the past three weeks is raising concerns with the United Nations Food and Agriculture Organization (FAO).

FAO economist Shukri Ahmed said the increase in price was sharp and sudden. He said that until May, experts were hoping for a huge increase in worldwide maize production.

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Feb 15

The world’s biggest farm has put up the for-sale sign, after being hit by a collapse in grain prices during the world financial crisis, and then by the droughts and the fires that raged across its territories last summer.

Ivolga, a farming conglomerate which controls 1.5m hectares of land across Russia and Kazakhstan, is presently negotiating with Royal Bank of Scotland, which leads its creditors, to restructure a $300m loan it arranged in 2007.

The company’s immense holding, an area a third the size of Wales, easily outstrips that of El Tejar, the Argentine conglomerate which is the largest farm in the Western hemisphere, with 1.1m hectares under cultivation. Analysts estimate that a sale could value the farm at £500m-£1bn.

Ivolga last year asked a team of investment banks from Europe and Russia to try and find a buyer for a stake in the company, after deciding it needed a strategic partner to fund further development. Vasily Rozinov, the company’s owner, is thought to be keen not to lose ultimate control of the company.

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Aug 05

See also:

Russia Declares State Of Emergy Emergency As Forest Fires Rage

Russia: Worst drought in a decade, high temperatures damaged 32 percent of land under cultivation, grain prices may double


wheat

WINNIPEG Manitoba (Reuters) – Chicago wheat markets jumped 8 percent to near two-year highs on Thursday, twice triggering trading curbs to restore order before easing back after Russia said it would temporarily halt grain exports.

Russia’s worst drought on record has devastated crops in parts of the country and sent international grain prices soaring as markets placed bets that without shipments from one of the world’s leading exporters, global supplies would be restricted.

Wheat has risen seven of the past eight days at the Chicago Board of Trade and buying by funds and traders spilled across the grain markets. Corn and soybeans were 2 and 0.5 percent higher, respectively.

Prime Minister Vladimir Putin signed an order banning grain and flour exports from August 15 to December 31, with a spokesman saying this would apply to contracts that had been already signed. Continue reading »

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Jul 29

Russia’s Drought Raises Bondholder Risk on Prices

russia_worst-drought-in-a-decade-high-temperatures-damaged-32-percent-of-land-under-cultivation-grain-prices-may-double
A farmer driving his tractor to harvest flax at a collective farm in the village of Mirny, in the Tver region (Reuters)

Russia’s worst drought in a decade will probably generate losses for bondholders as food prices rise and the government may be pushed to tap debt markets for funds to support farmers.

High temperatures, which rose to a record 37.4 Celsius (99 Fahrenheit) yesterday in Moscow, have damaged 32 percent of land under cultivation and forced Russia to declare states of emergency in 23 regions. Grain prices may double this year because of the drought, according to the Grain Producers’ Union.

Inflation may quicken to 8.1 percent by the end of December, compared with the government’s annual forecast of 6 percent, according to Yaroslav Lissovolik, Deutsche Bank AG’s head of research in Moscow. That will put pressure on Bank Rossii to raise its benchmark rate by year-end for the first time since December 2008, said Natalia Orlova, Moscow-based chief economist at Alfa Bank.

Higher rates “may cause a correction in short-term sovereign bonds and, later, in long-term sovereign bonds,” said Evgeniy Nadorshin, senior economist at Trust Investment Bank in Moscow.

The government, which plans to sell 1.2 trillion rubles ($39.3 billion) of bonds on the domestic market this year to finance its budget deficit, may increase that figure to pay for subsidies and contain the drought’s fallout, Nadorshin said. Continue reading »

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Nov 01

VeraSun Energy Corp., one of the nation’s largest ethanol producers announced late Friday that it is filing for Chapter 11 bankruptcy protection.

The South Dakota-based company says it expects to continue normal operations and pay its workers regular salaries while it reorganizes. According to a company news release “the filing was precipitated by a series of events that led to a contraction in VeraSun’s liquidity, impairing its ability to operate its business and invest in production facilities.”

VeraSun made bad bets on the corn market over the summer as grain prices reached record highs, resulting in significant losses for the company. That came just as the U.S. economy began deteriorating.

“Worsening capital market conditions and a tightening of trade credit resulted in severe constraints on the Company’s liquidity position,” the company said.

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Apr 14

KABUL, April 14 (Reuters) – Impoverished Afghans struggling with rising wheat prices are not expected to get any relief soon with no sign prices are going to come down, a United Nations official said on Monday.

Top finance and development officials from around the world called in Washington on Sunday for urgent action to stem rising food prices, warning that social unrest will spread unless the cost of basic staples is contained.

Afghanistan is one of the world’s poorest countries with half its 25 million people living below the poverty line.

Wheat prices in Afghanistan have risen by an average of 60 percent over the last year with certain areas seeing a rise of up to 80 percent, the U.N. World Food Programme (WFP) said. Continue reading »

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Mar 27

Rice shortages are appearing across Asia. In Egypt, the Army is now baking bread to curb food riots.

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Rice farmers here are staying awake in shifts at night to guard their fields from thieves. In Peru, shortages of wheat flour are prompting the military to make bread with potato flour, a native crop. In Egypt, Cameroon, and Burkina Faso food riots have broken out in the past week. Continue reading »

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