Brazil corn exports to China expected to jump
Brazil is poised to export up to 4mn metric tonnes of corn to China in 2023 and the country also may sharply boost shipments this year, as difficulties exporting grain from Ukraine continue to influence the international market.
Despite being one of the world's largest corn exporters, Brazil sells low volumes of the grain to China, the world's largest importer. In 2020, for example, Brazil shipped only 23,000t of corn to the Chinese market in a year when it exported a total of 34.4mn t.
The main barrier has been China's concern with phytosanitary issues. But in May, the two countries signed an agreement that should resolve China's concerns. Brazil presented data to prove herbicides are controlling certain weeds in its corn crop, and it is preparing to certify exporting companies to the Chinese market. A pending equivalence agreement would ensure that all genetically modified corn from Brazil is accepted in China.
With the reduction of corn exports from Ukraine, Brazil could export up to 4mn t of corn to China next year, Agrinvest Commodities analyst Eduardo Vanin told Argus. Even this year, the country should export at least 2mn t of corn to China, Vanin said.
Ukraine has been cut off from seaborne loadings that account for more than 90pc of its agricultural exports since Russia's invasion on 24 February. Ukraine's agriculture ministry expects the country to begin the 2022-23 marketing season that starts on 1 July with record old-crop grain and oilseed stocks of 20mn t, compared with only 6.5mn t at the start of the previous marketing year.
China's corn imports totaled 29.5mn t in 2021, mostly from the US and Ukraine. It is estimated that at least 10pc of this volume could be met by Brazil in the future. A study by Brazilian consultancy Céleres projects that in a decade, China's corn imports will rise to 60mn t/yr. This is because China's yields are lower than the world's main corn producers, and also because China has removed corn from a list of products in which the country should be self-sufficient. This change was previously implemented for soybeans, causing Chinese imports to surge.
According to the Céleres study, Brazil could supply 15mn t of corn to China by 2032, while Brazilian corn production could rise to 200mn t in the same period, from 115mn t in 2021-22.
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Draught limits tighten on lower Mississippi River
Draught limits tighten on lower Mississippi River
Houston, 23 September (Argus) — The US Coast Guard (USGC) placed further restrictions on traffic on the lower Mississippi River as water levels continue to deteriorate. The USCG on 22 September announced that all northbound traffic cannot have draught deeper than 9.5ft from Tunica, Louisiana, to Greenville, Mississippi. For Greenville to Tiptonville, Mississippi, barges must remain above a 9ft draught, the shallowest draught channel allowed for the lower Mississippi River by the US Army Corps of Engineers. All northbound transit also cannot load more than four barges wide or configure more than five barges wide. Southbound traffic from Tiptonville to Greenville cannot be more than six barges wide or deeper than 9.5ft. Greenville to Tunica southbound barges can load as deep as 10ft but cannot be more than seven barges wide. All locations between Cairo, Illinois, and Greenville fell back to their low water threshold over the weekend as rainfall from Hurricane Francine flowed down the river. More grain has moved downriver this year compared with last year as the US Department of Agriculture (USDA) expects higher US grain exports in the 2024-25 marketing year. Around 367,000 short tons of grain moved for the week ended 14 September, which is about double the same period a year earlier, the USDA said. Both south and northbound movement is expected to see a heavier pace in October. By Meghan Yoyotte Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Vancouver sulphur exports rise 20pc in Aug
Vancouver sulphur exports rise 20pc in Aug
London, 23 September (Argus) — Sulphur exports from Canada's Vancouver port reached 320,000t in August, rising by 20pc from July. Exports in August went to China at 180,000t, Australia at 69,000t, the US at 50,000t and New Zealand at 21,000t. Last month's bumper exports pushed the total for the first eight months of this year 15pc above the same period last year at 2.27mn t, on disruptions to loading schedules in July last year because of a 13-day strike . An anticipated port strike this year has so far been averted. But the risk remains, as there has been no update regarding the progress of negotiations between the International Warehouse and Longshore Union Canada and the British Columbian Maritime Employers Association. Both parties are awaiting a ruling by the Canadian Industrial Relations Board, following a hearing that ran from 11-17 September. Neither party has issued a 72-hour strike or lockout notice . September's rail strikes were also short-lived this year, and the disruption minimal . Wildfires pose a further risk, after they caused outages last year to delivery schedules from production sites to Vancouver port. While the impact has been limited this year, with some oil sands operations reducing staffing, there is still some time before the risk of them abates . There is also more de-blocking taking place, with product melted from long-term storage at Alberta's substantial sulphur blocks to reduce block size and move stored product to export markets. This is expected to accelerate, and maintain higher exports despite reducing production from some oils sands plants and upgraders, as new forming capacity lifts remelting and reforming. The new South Cheecham priller is finally operational after long-standing operational issues from January to May . By Maria Mosquera Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
MET Group aims to become global energy company
MET Group aims to become global energy company
Houston, 23 September (Argus) — Switzerland-based MET Group strives to become a global integrated energy company with a footprint across Europe, Asia and the US, its chief executive Benjamin Lakatos told Argus . MET dreamed of entering the LNG market for 16-17 years but knew that it had to "grow up" first, its chief executive Benjamin Lakatos told Argus on the sidelines of the Gastech conference in Houston last week. The firm now has a sufficient size to take on fob contracts, Lakatos said — it signed its first long-term deal for US LNG on a fob basis in July. MET's revenue was nearly €25bn ($28bn) in 2023. The firm has already been buying spot LNG for 4-5 years. It has long-term regasification capacity in Germany, Spain and Croatia, and unloaded LNG in eight countries last year. MET is now setting its sights on the Asian market, where it is looking to start both gas sales and gas supply sourcing through its subsidiary in Singapore that opened last year. It is also looking for additional potential US LNG supply. "But we don't want to do it too fast," Lakatos said. Lakatos did not exclude the possibility of getting involved in the upstream sector as well. Owning upstream assets and having fixed costs "is a kind of insurance against market de-efficiencies", Lakatos said — by which he means "too big" price differentials, for example between Europe and the US. In the medium term, firms can only stay competitive in LNG if they are involved "in all three key regions — Asia, US sourcing, Europe", Lakatos said. "We need to play this optimisation between the three territories." A large part of the value in selling LNG will start to shift between continents, he said. But while this strategy is "easy to execute and understand" for the largest global companies, it is more challenging for smaller ones such as MET, Lakatos said. Lakatos said that although he would like to see a convergence of global gas prices over time, the market's structure is too segmented to allow this. Today, only a few companies are involved in the whole US LNG value chain, from extracting the gas, to liquefying it, shipping it and then regasifying the supply and selling it to Europe. "Everyone has his own home currency or price reference, everyone is asking for relatively big risk securities." MET's number one priority within Europe for the next five years is growing its sales in the retail sector, Lakatos said. The firm is starting to push higher retail sales in France. It will also restart in Germany and is targeting higher sales in Italy and Spain too. The MET head described his firm's trading style as "a little bit opportunistic", with traders taking advantage of changing price differentials. MET is also interested in the Baltics because it believes that the region is undervalued by international investors owing to the geopolitical situation, Lakatos said. "Investors do not consider the very stabilising factors such as the EU and Nato membership of these countries, or the euro currency." One of the business areas MET will be looking at in the Baltics is fertilisers. Expanding into fertilisers MET is trying to expand its value chain into the European fertilisers sector, in view of declining European gas consumption, as it strives to stay competitive. Lakatos said he is concerned that Europe will soon become heavily dependent on imports of fertiliser, just as it is on gas imports. Without support, the heavily gas-intensive European fertiliser industry will continue to struggle because of high gas prices, Lakatos said. MET is working on a new product for fertiliser companies, in which it would have the option of supplying either ammonia or natural gas, as both can be used to run the plants. The firm has spoken to potential suppliers but it will take 1-2 years to build up its expertise, Lakatos said. By Natasha Fielding Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Japan pushes abatement approach to energy transition
Japan pushes abatement approach to energy transition
Tokyo, 23 September (Argus) — Japan is keen to promote its energy transition approach, focused on carbon abatement technologies, to the wider coal-reliant Asia-Pacific region. The country has accelerated development of carbon abatement technologies to keep fossil fuels in its energy mix and boost energy security and economic growth. Japan, with its G7 counterparts, pledged to phase out "unabated" coal-fired plants by 2035, or "in a timeline consistent with keeping a limit of a 1.5°C temperature rise within reach, in line with countries' net zero pathways". This is a major step for Japan, a resource-poor country. But legislative progress aimed at developing value chains for carbon capture and storage (CCS) and cleaner fuels, such as hydrogen and ammonia, might have encouraged Tokyo to commit, especially since the G7 text allows for some wiggle room. To ensure continued use of its abated thermal power plants, trade and industry ministry has requested ¥11.2bn ($79mn) to support CCS projects, including exploration of CO2 storage sites, for 2025-26, up sharply from the ¥1.2bn budgeted for 2024-25. Japan has yet to set a date to achieve the phase-out target. But it had already promised not to build new unabated coal-fired plants at last year's UN Cop 28 climate talks, while pledging to phase out "inefficient" coal-fired plants by 2030. Less than 5pc of Japan's operational coal fleet has a planned retirement year, according to analysis by Global Energy Monitor, and these might comprise the oldest and least efficient plants. Coal capacity built in the last decade, following the Fukushima-Daiichi nuclear disaster, is unlikely to receive a retirement date without a countrywide policy that calls for a coal exit. Japan's coal demand could decline, to some extent, under global divestment pressure. But the fuel remains key, as the government sees renewables and nuclear as insufficient to meet rising power demand driven by the growth of data centres needed to enable artificial intelligence. Continental divide The country is keen to extend its vision for "various" and "practical" pathways, including abatement technologies, to coal-reliant southeast Asia. This stems from Tokyo's sceptical view about promoting a more European approach to the energy transition — driven by wind and solar power — to Asian countries. Japan stresses the importance of more diversified pathways, including thermal power with abatement. The country aims to spur decarbonisation in Asia-Pacific through a platform called the Asia Zero Emission Community (Azec) initiated in 2022. Asia-Pacific accounts for more than half of global greenhouse gas (GHG) emissions, at 17.178bn t of CO2 equivalent, according to the IEA. In Jakarta last month, 11 Azec countries emphasised the need to co-operate "to decarbonise coal power generation". The platform sets out options such as biogas, hydrogen and ammonia, and retrofitting with CCS and carbon capture, utilisation and storage. Japan's industries have already committed to carbon abatement at coal-fired plants in Asia, leveraging their technological know-how. Tokyo has pledged to provide about $70bn to support decarbonisation globally. This funding is part of wider financial assistance to help mobilise the estimated $28 trillion that Asia requires. To secure the funding, Japan has already issued part of a $139bn climate transition bond and aims to strengthen the financial support through the Asia Zero Emission Centre, the latest Azec initiative, under which transitional finance will be studied further, a trade and industry ministry official told Argus . Japan is on track to reduce its GHG emissions by 46pc by the April 2030-March 2031 fiscal year from its 2013-14 level, and hit its net zero emissions goal by 2050. By Motoko Hasegawa and Yusuke Maekawa Japan CO2 emissions by sector Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
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