MASSIVE INCREASE IN UKRAINIAN GRAIN PRODUCTION & EXPORT
Ukraine has bounced back from its 2010 drought with a vengeance, exporting a whopping 9.65 million tonnes for their marketing year, which began on July 1.
This is a 42pc year on year increase.
Ukrainian officials say 2011 was the biggest production year in the nation since independence in 1991.
CORN & SOYBEANS ‘How does your garden grow”
In a surprise bearish report, the US Department of Agriculture increased production estimates and harvested acres for both the corn and soybean markets.
On the corn supply side of the ledger, USDA increased corn yields 0.5 bu./acre to 147.2 bu./acre on a total of 84 million harvested acres (an increase of 45,000 acres). USDA increased corn use with South American weather pulling down world corn supplies. Exports were projected 50 million bu. higher due to lower projected supply prospects for Argentina. Ending stocks for corn now sit at 846 million bu., providing more leeway rather than the low end of trade estimates calling for a mere 582 million bu.
Terry Roggensack, analyst for the Hightower Report, noted that USDA lowered Argentina production estimates by just 3 million tons due to dryness over the critical grain fill period. However, he warned that the production drop may be too low, with many in the field projecting production cuts ranging from 12 to 16 million tons.
If those large production losses due come in, next month USDA could lower world production by quite a bit and raise U.S. exports again, again amplifying the tight world stocks situation in corn, Roggensack noted.
USDA also slightly increased soybean yields, up 0.2 bu. to 41.5 bu./acre, bringing total production to 3.056 billion bu. USDA lowered soybean crush 10 million bu. and dropped exports 25 million bu. from last month and down 226 million from the 2010-11 marketing year. Soybean ending stocks are projected at 275 million bu., up 45 million bu. from last month.
Global soybean production was projected at 257 million tons, down 2.2 million mostly due to lower production forecasts for South America. The Argentina soybean crop was projected at 50.5 million tons, down 1.5 million due to lower projected area and yields, USDA said.
In the short-term, prices will see downward pressure from the bearish news. However, South American weather will again take the front seat in driving prices forward to gauge the total production losses that could result from the continued dry weather.
SLASHING RED TAPE FOR EXPORTS BY FEDERAL GOVERNMENT
The Australian Government is boosting regional economies through $30 million in support and a further $30 million per annum in reduced red tape for agricultural export industries.
Minister for Agriculture, Fisheries and Forestry, Senator Joe Ludwig, said the changes to the Australian Quarantine and Inspection Service (AQIS) export certification services were made under the Export Certification Reform Package to deliver better and more flexible arrangements for exporters.
“In October 2011, improvements in the meat inspection program introduced flexibility and efficiency through the implementation of AQIS Authorised Officers,” Minister Ludwig said.
“Changes to the meat program will reduce the regulatory cost of export certification by $27 million per annum and are being supported by $25.8 million in transitional assistance.
“On 1 January 2012, new arrangements commenced for exports of grain, fish and egg products.
“The Government will provide $1.5 million to support efficiencies in the fish and eggs program and $2.5 million to support the changes to the grain export program.”
Minister Ludwig said the changes were developed in close partnership with export groups to ensure a smooth transition to the new arrangements.
“None of the reforms that have been agreed and implemented could be delivered without an effective working partnership with exporters,” Minister Ludwig said.
“Australia’s agriculture industries support 300,000 jobs in regional communities.”
“I’m calling on the Opposition to support these important reforms, including underpinning regulations, and show their commitment to jobs in regional Australia rather than playing politics with regional communities.
“Export reforms will improve confidence in Australia’s export certification systems and improve the competitiveness of Australia’s $32 billion agricultural export industries.”
Highlights of the new service delivery arrangements follow. A full report on each project is available at www.daff.gov.au/ecri
CATTLE KILL IN INDONESIA GETS GOOD MAN SACKED AFTER 30 YEARS IN THE JOB
WHEN a slim blonde woman and her male Australian colleague turned up at the Kota Binjai abattoir in March, Aliaman thought little of it.
It was about 3am and the veteran slaughterman had only just been called out of bed. His workmates hadn’t turned up and there was a steer to kill and get to the local market by dawn.
”I was busy. It was already late. I didn’t pay them much attention,” said Aliaman, 45, about the appearance of Lyn White, the investigator from Animals Australia whose expose´ halted the $300 million cattle trade with Indonesia for a month and will probably result in Australian cattle never again going to Binjai’s traditional abattoir.
“People are angry with me” … Aliaman with his co-worker Darwin outside Aliaman’s house. Aliaman says his wife is also very angry and will not cook for him. Photo: Chalid Nasution
”I think they said they were tourists.” But he said he did wonder what they were doing with a camcorder.
The three workers at Binjai that night said Ms White’s Indonesian driver had given each of them 50,000 rupiah (about $6) for the access. They were given no instructions to mistreat the animal.
It was a decent sum for poor Indonesians but in accepting the gratuity, Aliaman’s life has been ruined. After the footage was shown on the ABC program Four Corners, he was driven to nearby Medan, the North Sumatran capital, and given a dressing down by agriculture ministry officials. The next day he was sacked from a job he had had for more than 30 years.
He now survives on odd jobs and about $1 a day and has been ostracised by his wife and community, where a small but lucrative business processing Australian cattle has disappeared and overall revenue at the abattoir has been cut to about a fifth of its previous levels. ”My colleagues, the people in the market, they blame me for what has happened,” Aliaman said outside his simple house shaded by a huge rambutan tree.
”My wife is very angry, too. She won’t cook for me. Sometimes she leaves the house and locks me in from the outside.
”Sometimes I stay with my brother but I can’t ask him for money because he is a pedicab driver … and I don’t go to the market at all because people are angry with me.” The footage taken at Binjai depicts Aliaman hitting the steer with a rope and then twisting its tail as he tries to move it close to the post where it was to be tied before being killed.
Another worker, Darwin, kicks the beast in the face as it is being pulled back into position.
Animals Australia released the footage on its website, with commentary from Ms White who named the beast ”Brian”, ”a big affable steer … trying his best to keep out of trouble”.
Ms White said: ”Sadly, this seems to be a battle of man versus beast that the workers get some gratification out of while the animal is simply terrorised.”
Binjai, a traditional abattoir where animals are trussed by hand before being killed, hardly boasts world’s best practice but Aliaman takes great exception to Ms White’s assertion that he hurt animals for pleasure.
”I didn’t torture the cow. I put the rope around the cow’s neck and pulled it towards the post,” he said. ”I hit it with the rope [and twisted the tail] just to move it to the pole. That was all.”
The thought of purposely hurting a beast is abhorrent. ”It is haram [forbidden under Islamic law]. Besides, there is a sura [chapter] in the Koran named after a cow, the al-Baqara sura.
”I always use a sharp knife and I always say a prayer before I slaughter an animal,” he added.
Ms White said yesterday that her opinion that Aliaman was gratified by hitting the animal was based on her observation. ”I’m not suggesting for a moment that these are bad people.”
She said she had no idea her driver had paid the workers for the access.
The footage broadcast by the ABC included kicking, hitting, gouging of eyes and breaking of tails of some animals as Indonesian workers attempted to force them into slaughter boxes.
Mr Yudhoyono also said the country needed to find a swift solution to ensure meat supplies before important Islamic holidays come up.
”What we need to do is to find a suitable solution for the short and long term … if we fail to take appropriate measures, it could affect domestic meat supply,” he said.
He ordered his ministers to act immediately to prevent a possible increase in meat prices as the mainly Muslim country will celebrate the holy month of Ramadan in July.
”We have to make a maximum effort to ensure our domestic supply,” he said, adding that the Australian ban should serve as a challenge to boost the country’s efforts to become self-sufficient in meat supplies.
Australian Agriculture Minister Joe Ludwig said earlier the live cattle trade, worth $318 million a year, would not start again until safeguards were in place to ensure animal welfare in Indonesia.
Sixty per cent of Australia’s lucrative live cattle trade goes to Indonesia, with about half a million animals sent each year.
Meanwhile, ACT Liberal senator Gary Humphries appears at odds with his party leader, Tony Abbott, over the suspension of the exports.
In separate media interviews yesterday, the two Liberals presented opposing views about the ban.
At the same time, Mr Ludwig avoided committing to an immediate inquiry into Meat and Livestock Australia’s knowledge of any abuse.
Mr Abbott appeared on Channel Nine’s Today yesterday and condemned the blanket suspension because of the financial impact it could have on Australian producers and exporters.
”If I was the prime minister I would sort this out because it’s absolutely wrong to send Australian cattle to centres that don’t have proper animal welfare measures in place, but there’s no point destroying a perfectly good export business while there are centres that we could send cattle to that have these measures in place,” he said.
”The fact of the matter is it should never have come to this and we should not destroy this important industry because it ought to be possible to keep exporting to centres that do treat animals humanely while absolutely refusing to send our cattle to centres that don’t.” But shortly after those comments, Senator Humphries told ABC local radio that he supported the Government’s decision and said Mr Ludwig had no other option.
”I’m in favour of being tough about this,” Senator Humphries said.
”I think we should ban the trade unless a satisfactory way can be found of providing cattle to those abattoirs in Indonesia or anywhere else for that matter which can demonstrate acceptable standards of slaughter.
”In terms of freezing trade, I think it’s the only thing he could do.”
Sourced & published by Henry Sapiecha
May 20, 2011 – 11:10AM
The strong dollar is proving to be a mixed blessing for Australian businesses with some importers saying they’re passing on lower prices while exporters fret they will lose competitiveness abroad.
Tiziana Smith of Melbourne-based Mamma Lucia Cheese said the dollar’s strength has helped her company offer more specials on imported cheese from Europe in recent weeks.
“It’s not every product but certain products,” she said, adding that customers had relished getting any discounts against a backdrop of rising prices. “If you’re getting a discount, it’s better.”
Over the past year, the Australian dollar has gained about 25 US cents – or about 30 per cent – against the greenback to trade today at about 106.6 US cents. Against the euro, it has climbed 13 per cent over the period to fetch 74.5 euro cents, while the dollar is not far off its highest in 25 years against the pound, buying about 65.7 pence.
The incidence of price cutting may be spreading, according to the latest Aussie Dollar Barometer survey, conducted by Commonwealth Bank, with about half of importers polled saying they are considering lowering prices.
“We suspect intense competitive pressures in Australia are forcing some importers to consider passing on some of the benefit of the high dollar onto their customers,” said Joseph Capurso, currency strategist at CommBank.
Importers surveyed believe the dollar will peak at 114 US cents by the end of the year, while exporters are more pessimistic, tipping it to rise as high as 116 US cents by September, the survey showed.
140-year high
The federal government in handing down the budget this month said Australia’s terms of trade – the value of its exports over the value of its imports – were at 140-year highs, driven demand from Asia for iron ore, coal, gold and other commodities.
New Treasury Secretary Martin Parkinson predicted this week the Aussie dollar would stay ’’persistently high for some time’’.
’’Most Australian businesses are well equipped to deal with short-term volatility of the exchange rate,’’ he said. ‘‘But what we are dealing with now is a very different type of event,’’ he said. ’’This will challenge a number of existing business models.’’
Priced out
Winemaker John Casella of New South Wales-based Casella Wines said his company is one exporter who will have no choice but to raise prices for customers of his Yellow Tail and other wines in the US, Canada, UK and Japan if the dollar doesn’t pull back over the coming 12 months.
“The issue for us is what effect will that (price increase) have on sales and what effect that ultimately has on what grapes we buy,” said Mr Casella. “I do expect there will be a decline in sales as the (selling) price moves up.”
About 80 per cent of exporters surveyed said they are considering price changes to account for the exchange rate movements, CommBank said.
Exporters said they began to feel the pain when the Aussie rose over 91 US cents – which happened in September of last year, the survey found.
“The contrast between exporters and importers is stark,” said Mr Capurso, who noted that no importers surveyed said they were uncompetitive when the dollar trades at 91 US cents or higher. “We are definitely at an interesting point in time for Australian businesses. The next few months will be very telling as to whether businesses have gotten their hedging strategies right,” said Mr Capurso.
Despite the lower cost of importing goods, the strength of the dollar has hurt sectors such as clothing, electronics and books, by luring consumers to overseas websites to shop directly, undercutting traditional local retail businesses.
Electronics and furniture retailer Harvey Norman flagged the strong dollar as a contributor to its weaker sales in the nine months to March 2011, when it updated the market last month.
“Significant price deflation exacerbated by the strong Australian dollar was experienced in the key laptop computer category,” the retailer said.
Woolworths-owned Big W said prices had eased between 4 to 7 per cent in the first three months of the year.
“The primary cause of price deflation has been the stronger Australian dollar with cost price reductions passed on to customers,” the company said.
czappone@fairfax.com.au