Canola, Sugar Targeted in Trade Moves, While Robusta Slides

Grains & Oilseeds

China Launches Anti-Dumping Probe into Canadian Canola Imports

Escalating trade tensions, China announced an anti-dumping investigation into canola imports from Canada. The move comes on the heels of Canada imposing 100% tariffs on Chinese electric vehicles. China imported 5.5 million tonnes of canola in 2023, with Canada accounting for 94% of the total, valued at $3.72 billion. The investigation could impact canola prices and force China to seek alternative suppliers like Australia and Ukraine.

ABARES Boosts Australian Wheat, Barley Production Forecasts

Australia’s wheat production is projected to reach 31.8 million tonnes in the 2024/25 season, a 9% increase from previous estimates, according to ABARES. Barley production is also forecasted to rise 6% to 12.2 million tonnes. Favorable growing conditions in key regions like New South Wales, Queensland, and Western Australia contributed to the improved outlook.

Softs

Robusta Coffee Prices Retreat from Recent Highs

Robusta coffee futures retreated from their highest point since the 1970s, driven by profit-taking and low trading volumes due to a US holiday. The commodity, used in instant coffee, had surged on concerns about tight supplies from Vietnam and Brazil. Despite the pullback, analysts highlight the ongoing volatility in the robusta market due to low stock levels and potential shipping disruptions.

Global Cocoa Deficit Continues

The International Cocoa Organization (ICCO) predicts a global cocoa deficit of 462,000 tonnes for the 2023/24 season, extending a period of tight supply in the cocoa market. Factors contributing to the shortfall include adverse weather conditions, aging trees, and persistent pests and diseases in key cocoa-growing regions. This imbalance between supply and demand has driven end-of-season stocks down to 1.324 million tonnes, a 26.1% decrease compared to the previous year and the lowest level in 45 years. The ICCO reports a stocks-to-grindings ratio of 27.9%, a key indicator of market tightness. While cocoa prices have eased recently from record highs, they remain elevated due to the ongoing supply constraints.

Kenya Imposes Immediate Ban on Sugar Imports

Aiming to bolster domestic sugar production, Kenya has implemented an immediate ban on all sugar imports. The government asserts that local sugar mills can adequately meet national demand, with monthly production estimated at 80,000 tonnes against consumption of 4,000 tonnes. This move is anticipated to benefit sugarcane farmers who have long advocated for import restrictions.

Biofuel

China’s Biodiesel Exports Expected to Decline Following EU Tariffs, While Ethanol Production Rises

The USDA forecasts a decline in China's biodiesel exports due to recently imposed anti-dumping duties by the European Union, reaching up to 36.4%. This will significantly impact the Chinese biodiesel industry, which has been heavily reliant on exports to Europe. Conversely, China's ethanol production is projected to increase by 17% in 2024, driven by low corn prices and government support for domestic consumption. The report highlights China's strategic shift towards bolstering domestic biofuel production and consumption while facing international trade barriers.

Agribusiness & Finance

Olam Agri Extends Takeover Bid for Namoi Cotton

Singapore-based Olam Agri has extended its takeover bid for Australia's leading cotton ginner, Namoi Cotton, to October 8th. The extension allows more time for the Australian Competition and Consumer Commission (ACCC) to complete its review of the proposed acquisition. Olam is competing with Louis Dreyfus Company (LDC) to acquire Namoi.

Ukraine Suspends Debt Payments to Cargill Totaling $700 Million

As part of a broader debt reorganization driven by the ongoing war with Russia, Ukraine has suspended payments on approximately $700 million owed to Cargill. The move impacts loans provided by Cargill Financial Services International to the Ukrainian government before the conflict began. The suspension comes as Ukraine grapples with the financial strain of the war and seeks to restructure its debt obligations.

(Source: Reuters, Bloomberg, Grain Central, ICCO, ChiniMandi, The Capital Brief, The Minnesota Star Tribune)

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