Source: vietnambiz.vn
Cargo ship moves through the Suez Canal on January 13, 2024. (Photo: THX/TTXVN).
The World Trade Organization (WTO) said the amount paddy Wheat shipped through the Suez Canal fell nearly 40% in the first half of January 2024, to 500,000 tons, due to concerns about attacks on cargo ships in the Red Sea and Gulf of Aden. This number reflects the trend of shipping lines having to divert ships carrying wheat after attacks by Houthi forces in Yemen on ships in the Red Sea.
According to WTO, in December 2023, only about 8% of wheat from the European Union, Russia and Ukraine that usually passes through the Suez Canal has moved to other routes. This number jumped to about 42% in the first half of January 2024. This affects the global food supply chain, especially for countries that depend on wheat sources import Along with growing food security concerns worldwide, tensions in the Red Sea add to market uncertainty.
In recent years, high food prices have encouraged farmers around the world to increase grain and oilseed cultivation. But consumers are expected to face tighter supplies moving into 2024, in the face of increasingly severe El Nino weather and regulatory restrictions. export of countries.
After years of strong price increases, global wheat, corn and soybean prices are trending lower as supply bottlenecks in the Black Sea cool and concerns about a possible global recession. But prices of these commodities remain susceptible to supply and condition shocks inflationary Food prices during the New Year.
“The grain supply landscape has improved markedly in 2023, with production increasing in many areas,” said Ole Houe, head of advisory services at agricultural brokerage firm IKON Commodities in Sydney. important area. But we are still not really out of trouble.” He said that in the context of the El Nino weather phenomenon expected to last until at least April-May 2024, Brazil will almost certainly reduce corn production, and China is surprising the market by increasing Increase purchases of wheat and corn from international markets.
The El Nino weather phenomenon, which causes large areas of Asia to become dry in 2023, is expected to continue in the first half of 2024. This phenomenon threatens the supply of rice, wheat, palm oil and many other agricultural products in many of the world’s leading agricultural importing and exporting countries.
Traders and officials in many countries predict Asia’s rice output in the first half of 2024 will decline due to dry growing conditions. Global rice supply has tightened since 2023, after El Nino affected production activities, causing India, the world’s largest rice exporter, to limit exports.
While other grain markets are depreciating, rice prices are rising to a 15-year high in 2023. In particular, rice asking prices in many export centers in Asia increased by 40-45%.
India’s upcoming wheat crop is also threatened by lack of moisture. This could force the world’s second-largest wheat consumer to import for the first time in six years, as domestic wheat stocks have dropped to their lowest level in seven years.
In April 2024 farmers in Australia, the world’s second largest wheat exporter, may have to farm in arid soil conditions, after months of heat reduced crop yields. 2023. This could lead wheat buying countries such as China and Indonesia to seek larger volumes of wheat from other exporting countries in North America, Europe and the Black Sea region.
Cargo ship moves through the Suez Canal on January 13, 2024. (Photo: THX/TTXVN).
Commerzbank believes that the wheat supply situation in the current 2023-2024 crop year may worsen compared to the previous crop year. According to Commerzbank, this is because exports from key producing countries are likely to decline sharply.
Regarding the positive outlook for grain supply, wheat and soybean production are expected to increase in 2024, although volatile weather conditions in Brazil are somewhat casting a shadow on this outlook.
In Argentina, more rain in the agricultural heartland could boost soybean, corn and wheat output in the world’s top grain exporter. According to Argentina’s Rosario grain exchange, 95% of early-planted corn and 75% of soybeans are in “very good to excellent” condition, thanks to persistent rain since late October across the Pampas region of Argentina. this country.
In addition, Brazil is expected to have near-record agricultural output in 2024, although the country’s estimated corn and soybean output was lowered in the final weeks of 2023 due to dry weather.
Global palm oil production may also decline in 2024 due to El Nino, while demand for biodiesel and palm oil-based cooking oil is expected to increase. This outlook will support cooking oil prices, which have dropped more than 10% in 2023.
CoBank, the leading bank in the agricultural sector in the US, believes that agricultural product prices are more likely to increase, rather than decrease. CoBank believes that global grain and oilseed reserves are at historically low levels. The Northern Hemisphere may experience strong El Nino weather during the farming season for the first time since 2015. The USD is expected to continue its recent decline, and global demand will return to an increasing trend in the long term.
According to recent analysis by Japanese experts, the sharp increase in global food prices, which has put a strain on the wallets of Japanese households, has begun to slow down. However, in many aspects, this is hardly an optimistic signal when food price inflation seems to be gradually shifting from a geopolitical risk to a “climate crisis”.
Taking an example of soybean products, although the price has decreased by about 20% compared to the end of March 2022, the decrease is only about half that of wheat and corn prices, and is still 40% higher. compared to the end of 2019. This is partly due to the impact of climate change in the soybean production areas of the US and Brazil.
Mr. Jeff Magyer, owner of a business that produces soybeans and many other agricultural crops in Ohio, USA and exports to Japan, said: “This is the driest summer ever. Furthermore, crops are also affected by lack of sunlight from forest fires in Canada. Surely output will decrease significantly.”
The US Department of Agriculture estimates US soybean production in fiscal 2023-2024 will be 112.38 million tons, 3.3% lower than the previous harvest. Along with that, Brazil’s soybean production in the 2023-2024 fiscal year was initially expected to be 163 million tons but may decrease by 10 million tons due to severe weather.
Currently, Japan is importing about 90% of soybeans from abroad, equivalent to about 3.5 million tons used for extracting cooking oil and as ingredients for many dishes, so the decrease in soybean production from this source US and Brazilian supply will have a significant impact on Japan.
According to experts, unusual weather problems have an increasing impact on the farming environment and the economy in general, also known as the “climate crisis”, showing the urgency of responding to climate change. Responding to global climate change for food security.
