Energy: Oil, Agriculture, Food, Commodities & Cost of Living (13)


  • PlanetArkAnalysis: Wood Fuel Poised To Be Next Global Commodity;
  • MSNBC.comDrought in US, EU stressing crops, farmers; U.S. wheat prices are on their way to their biggest weekly gain;
  • Financial Times blog, “Beyond BRICS” – Locusts: looming in central Asia; In Kyrgyzstan where the poorest 10 per cent of the population spend almost three quarters of their budget on food, prices rose by 27 per cent last year. Georgia saw food inflation of 23 per cent last year and Tajikistan 14 per cent. Fearing a repeat of the unrest that toppled dictatorial leaders in North Africa this year, some central Asian governments have resorted to market intervention to control food prices.In Tajikistan, where Emomali Rahmon, the authoritarian president has advised citizens to stock up on two years of grain supplies, police have been deployed in food markets to ensure vendors of meat and bread observe state price controls. Speaking in Astana last week, Jacques Diouf, the FAO director general, warned that trade restrictions and price controls could exacerbate food price rises. “Such policies can affect production incentives and have spill-over impact on neighboring countries,” he said.That sounds almost as bad as locusts.
  • Global Arab NetworkArab world buys a third of the world’s traded wheat;
  • David Malone / The Debt Generation – More food riots and uprisings on the way; The situation in Egypt was about to, and perhaps still will, get critical. If food prices, shortages and hunger ignites another street uprising it will not be against an aging dictator who can be thrown to the crowd, it will be against the quasi military government which the US backs. What worries the US is the possibility that if there is another wave of unrest, this time blaming the moderate, largely secular uprising itself, then more radical Islamic groups will rise to prominence. That is why the US is giving money it can ill afford given the fact that it has exceeded its own debt ceiling yet again. And it is not only the US. This week Saudi Arabia has pledged $4 billion in loans and aid to Egypt. After the Saudi stock market lost 6.5% last Saturday.

    The price of food in Egypt is partly due to global Wheat harvest shortages. Last Wednesday Wheat futures jumped 7% in a single day. Wheat futures are now up 91% in less than a year. 91%! Such huge price rises are going to make staple foods unaffordable in all the same countries that saw popular uprisings already this year.

  • Wall Street JournalFacing Up to End of ‘Easy Oil’; Saudi Arabia became the world’s top oil producer by tapping its vast reserves of easy-to-drill, high-quality light oil. But as demand for energy grows and fields of “easy oil” around the world start to dry up, the Saudis are turning to a much tougher source: the billions of barrels of heavy oil trapped beneath the desert.Heavy oil, which can be as thick as molasses, is harder to get out of the ground than light oil and costs more to refine into gasoline. Nevertheless, Saudi Arabia and Kuwait have embarked on an ambitious experiment to coax it out of the Wafra oil field, located in a sparsely populated expanse of desert shared by the two nations.That the Saudis are even considering such a project shows how difficult and costly it is becoming to slake the world’s thirst for oil. It also suggests that even the Saudis may not be able to boost production quickly in the future if demand rises unexpectedly. Neither issue bodes well for the return of cheap oil over the long term.“The easy oil is coming to an end,” says Alex Munton, a Middle East analyst for the Scottish energy consulting firm Wood Mackenzie. The major oil fields in the Gulf region, he says, have pumped more than half their oil—the point at which production traditionally begins to decline.
  • ArabianBusiness.comSaudi looks at restarting its first oilfield;
  • Forbes.comBritish Government Faces Up To Peak Oil; The UK Secretary for Energy and Climate Change, Chris Huhne, has committed to establish an “Oil Shock Response Plan” to cope with some of the consequences of peak oil.
  • The IndependentGoldman U-turn fuels surge in oil prices;
  • CNNMoney / FortuneWhy oil prices will spike again soon; Oil prices could surge again by the end of 2012, economists Jan Hatzius and Andrew Tilton wrote in a note to clients this past weekend. They say the snail-like pace of global oil supply expansion – which Goldman projects at 1% or so annually – can’t keep a petroleum-addicted world economy rolling without prices rising, perhaps sharply.
  • Mike “Mish” Shedlock / Global Economic Analysis blog – Energy Shortages Spreading: Rationing in China, Pakistan, Venezuela, Japan, Argentina; China Resorts to Punitive Prices to Curb Demand;
  • OilPrice.comForget Oil and Gold – Phosphorus is the Commodity Everyone Should be Concerned About;Today the world market for phosphorus is mined from ancient sea floors, likely volcanic deposits buried eons ago.  The good ones are in the U.S., Morocco and far west China.  The problem is the U.S reserve is in decline, Morocco is expected to peak in the next decade or so and China’s reserve is inexact.  China will certainly in time hoard for its own population and Morocco is a fast becoming a monopoly source for everyone else.We’re getting to a point of “what are you willing to pay” to eat well.
  • Business InsiderRising Coal Prices Are Driving Power Plants Out Of Business In China;
  • New York TimesChina’s Utilities Cut Energy Production, Defying Beijing;
  • China.org.cnSteel output may fall as power cuts loom;
  • Reuters blog, by Mark Mobius – China’s growing presence in Africa;There are some key forces both pushing and pulling China into Africa. First, China now has the world’s largest amount of foreign reserves, reaching $3 trillion, more than twice that of Japan and far larger than most other countries. Up to now a large portion of these reserves have gone into U.S. government debt but increasingly China is finding the necessity to diversify those reserves  because of the growing precarious situation with the U.S. Dollar and concerns about U.S. government debt.At the same time, China’s burgeoning economy is demanding more and more natural mineral resources whether it is oil, copper, nickel, gold, etc. Looking further into the future, the demands of China’s more sophisticated diets means that imports of food will be increasing as well. In both areas, minerals and food, Africa has great promise. It is well known that Africa is rich in a wide variety of minerals from oil to copper. Africa’s vast amount of land could fit the entire land mass of not only China but also India, the United States, Mexico, France, Italy and a number of other countries. Besides land, and more importantly, Africa has huge resources of water essential for bountiful harvests.China’s attraction to Africa is clear. Africa is also attracted to China — China is a developing country demonstrating a successful growth model and this is an opportunity for African leaders to learn from them. China has the money to import Africa’s resources and the money to help build Africa’s urgent need for infrastructure: roads, railroads, ports, electric power systems, etc.
  • The New York ObserverHedge Farm! The Doomsday Food Price Scenario Turning Hedgies into Survivalists; “A friend of mine is actually the largest owner of agricultural land in Uruguay,” said the hedge fund manager. “He’s a year older than I am. We’re somewhere [around] the 15th-largest farmers in America right now.” “We,” as in, his hedge fund.
  • Hispanically Speaking NewsDeforestation in Brazil’s Amazon Region Increases 400% in One Year.
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This entry was posted in Agriculture, Budget, Commodities & Cost of Living, Economy, Energy / Natural Resources, Energy: Oil, Environment, Food, Geopolitics and tagged , , , . Bookmark the permalink.

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