Friday, 20 August 2010
“Most trading companies in Ukraine are now refusing to undertake any wheat purchases, and it can be assumed that this is the intention behind all these new measures. By threatening companies or even individual persons within the companies, or by introducing nontransparent measures and arbitrary new procedures without proper justification, the wheat exports out of Ukraine have practically stopped.
These actions by government agencies will hurt the Ukrainian State in the form of lost taxes and problems with foreign credits, failures for Ukrainian companies seeking IPOs and foreign partnerships, lost revenues for Ukrainian farmers etc. It should not be forgotten that the growing role of Ukraine as Eurasia’s grain basket is bringing substantial benefits to this country and supporting its international and investment profile. Unjustified and restrictive actions by Government authorities will damage the reputation of Ukraine as a reliable international trading partner and as a country in which to invest. “
Wednesday, 18 August 2010
Sounds fishier than Billingsgate to me!
The WTO is surprisingly silent in all of this. So much so I decided to contact them and ask what they are doing in all of this? I will let you know if they respond.
However the guys in charge thought this was a great leap too far and commanded that he replace it with a three stroke engine and if that proved successful he could then progress on to the two stroke version.
I’m not sure why I felt the need to recount that true story right now.
“I've been reading your blog on how markets work and have to agree. I feel I should send your (Ukrainian) government a bunch of flowers; your yields are down and they've kept your prices down so our average yields (winter barley all cut about 9t/ha) are being met with high prices, whoopieeeee! Maybe a box of chocolates?”
A case of single malt might be more appropriate perhaps from the Isle of Illegal Embargo, it’s just off the west coast I believe.
This rain will do wonders to re-charge the groundwater, encourage volunteers to chit, improve seedbed quality and get newly drilled crops up and away.
Tuesday, 17 August 2010
So that will be low yields coupled with low prices for the second year running. Abso-feckin-lutely brilliant!
My guess is the quota will be lifted some time after the local elections in October.
Monday, 16 August 2010
The price then drops as it is forecast to rain in said far off country even though all the harvest has been collected and the rain will do nothing to change the supply. Beats me.
a) follow with similar measures to protect its food security. 80.96%
b) resist export restrictions. 4.36%
c) adopt a cautious approach, with targeted export quotas that do not violate WTO rules. 14.68%
That’s the problem with the internet; any loon can get on it and voice an opinion.
Perhaps if they asked the question “Ukraine should follow with similar measures to protect its food security with the knock on effect that small to medium scale farmers will be put out of business and Ukraine will once again be seen as an unreliable export partner reducing future export opportunities thereby exacerbating the plight of farm and ancillary businesses delaying future economic development and prosperity for all” they might not have got such a skewed response.
I don’t mean to bang on about this but everyone in Ukraine is desperate for a drop in temperature so they can get some sleep at night.
How hot has it been? A quick look at the average temperature chart shows how far it has deviated from the norm.
What are the consequences of all this heat? About 1t/ha off the wheat yield (on top of 1t from the winter); maize shrivelling up in front of your eyes, there’s going to be a big hole there; sunflower still hanging on in; soya starting to look stressed.
Forecast is for some cooling and showers later in the week. Glory be!
Having said all that, right at this moment no one is buying any bread making grade wheat at all.
Buyers are unsure if they can export the stuff and are looking for a steer from the government (ha! see previous post) and I suspect some are waiting for a drop/collapse in the price. Which in my opinion isn’t likely to happen any time soon.
Chelski get off to a rip roaring start sticking six past West Brom. Evertons new pink strip didn’t do them any favours with a goalkeeper error gifting Blackburn a win.
Another goalkeeping error this time at Anfield saw the Gunners grab a last minute draw against Liverpool.
35,000MT has been found at fault with a further 95,000MT sitting in nine vessels awaiting results of examinations that will take three to four days.
I don’t think I will comment anymore on this, it’s getting a bit too heavy.
Thursday, 12 August 2010
I reckon they are just using the current situation as a cover to poor performance. This rally has only been going on for five weeks, surely Greggs who have 1,400 outlets must have planned for this sort of thing and forward purchased basic ingredients for bakery stuff?
There are local elections in October and I guess the government wants to score some cheap populist votes by keep bread prices down.
We start drilling oilseed rape next week.
Seedbeds will be bone dry but that doesn't worry me, I've grown loads of rape in these conditions, the seed just sits there until it does rain when it absolutely shoot out of the ground. The trick is not to be tempted to sow it deep in the vain hope of trying to find non existent moisture. Better to be too shallow and wait for rain than too deep and achieving patchy emergence.
I’m going for low seed rates this year and will be aiming for 50ppm from the start and will stop drilling by the 15th September regardless. Anything after this date always does pants.
Tuesday, 10 August 2010
What you probably haven’t heard is that some of the fires are in the Chernobyl exclusion zone and that the smoke might be radioactive. Great!
No sign of an outright export ban yet and probably unlikely in light of the recent IMF loan. But that’s not to say local bureaucrats will make things easy for us.
Preliminary figures are suggesting a 25% drop in yields caused by a combination of higher than average levels of winterkill and very high temperatures over the last three weeks.
This hot weather - and believe me it’s a scorcher - is starting to knock maize with reports of crops suffering quite badly. Sunflowers are ripening faster than normal and this will also mean a yield reduction. Soya isn't too bad at the moment but could obviously do with a drink.
Weather forecasts are suggesting the hot spell will continue with some local showers to give brief relief.
Friday, 6 August 2010
I stopped reading newspapers a few years back mainly because I decided that reading the opinion of the unelected about the unknown by the unknowledgeable was an increasingly pointless and fruitless exercise.
Two articles today in the otherwise excellent Agrimoney kind of illustrate this point of view;
Wheat rally cools as analysts flag huge stockpiles
Opinion: wheat's rally may yet have some puff left
What's it to be chaps?
However regional government is tasked with ensuring food security and can put in other measures to make it difficult to sell and transport grain locally thereby restricting the export of grain by other means. Sneaky.
I am about sell some wheat today so I will see what restrictions have been put in place.
At the moment I have some interested buyers who are offering 1,550UAH/128GBP for milling grade but I am also hearing that there are some other quality criteria that might mean that our milling wheat is suddenly "no longer suitable for milling”.
I will let you know if this turns out to be the case.
Thursday, 5 August 2010
Russia announced they are restricting grain exports and wish partners in crime Kazakhstan and Belarus to follow suit.
Mr Putin said "I think it is advisable to introduce a temporary ban on the export from Russia of grain and other agriculture products made from grain".
Like vodka you mean? Don’t expect a shortage of Stolichnaya anytime soon.
Wheat prices are closing the gap as I write.
Just been quoted 1,650UAH (132GBP) for one metric tonne of milling grade wheat.
Latest London price is 174GBP so we should expect the local price to lift further as it usually lags by about 20% which would mean a local price of around 1,750UAH or 140GBP on those figures.
If you look at the last twelve months the price does indeed look like a spike.
However if you take it in context with the last twenty years of prices which have shown a downward trend you could argue that this is a realignment rather than a spike.
If you take 1990 as a base price of £106 and add say 2% for inflation every year then by 2010 wheat would be £158.
Should we be paying more for our food?
Wednesday, 4 August 2010
It's obviously very dry and seedbeds are difficult to achieve but to ensure the whole crop is planted before the latest safe sowing date which is the second week in September in Ukraine planting needs to start pretty much about now.
Still very hot and dry, combines working flat out.
The vice president of the Association of Grape Growers and Wine Makers of Ukraine, said "the hot, sunny summer is conducive to the formation of a large quantity of sugars in the grapes" and "in general, the quality of the grape harvest this year should be high.”
Ukraine may gather 300,000MT of grapes this year.
The most likely outcome will be that small Ukraine farm business failing to capitalise on the current market rally will once again have little working capital to invest in quality seed, fertilisers and sprays not to mention machinery come planting time.
The hand to mouth existence that typifies small Ukrainian farm business will continue on for yet another year.
Nice one lads!