06 Foreign News
Declining Russian wheat prices
06 Foreign News
@ AGROBiz | July-August . 2024
Microsoft ’ s carbonfarming boost
INDIGO Ag , a leader in sustainable agriculture , announced that it will provide Microsoft with 40,000 carbon credits . It marks the largest delivery of carbon credits in Indigo Ag ’ s history .
The credits are generated through carbon farming practices , which focus on sustainable methods to sequester carbon in the soil . The Climate Action Reserve ’ s Soil Enrichment Protocol verifies these credits , ensuring their integrity and impact .
Microsoft ’ s choice to purchase these credits aligns with its goal to become carbon-negative by 2030 . Microsoft aims to accelerate progress toward its ambitious climate targets by integrating soil-based carbon removals into its decarbonisation efforts .
Carbon credits are produced by planting cover crops , reducing tillage , and rotating crops . These methods help trap carbon in the soil and reduce greenhouse gas emissions .
Farmers who adopt these practices contribute to environmental sustainability and gain financially by selling carbon credits through Indigo Ag .
The company ensures that farmers receive at least 75 per cent of the average credit price , offering them a substantial revenue stream . So far , Indigo Ag ’ s carbon program has issued nearly 300,000 offset credits .
Microsoft ’ s credits will come from Indigo Ag ’ s third carbon crop , sourced from farms in 28 states across the United States . This agreement highlights the growing demand for credible , science-backed agricultural carbon credits and underscores their vital role in climate action . It also reflects the maturation of the voluntary carbon market .
Indigo Ag Chief Executive Officer Dean Banks celebrated
Expanding US meat trade
AS CHINA ’ S demand declines , the US is shifting focus to expanding its meat export market in Central Asia . Uzbekistan has opened its market to US beef and poultry producers , and Kazakhstan plans to certify more American production facilities for export .
Central Asian countries offer new opportunities for US meat exporters as they navigate reduced demand from significant partners like China . Starting June 1 , Uzbekistan began accepting imports from approved US meat and poultry facilities .
Similarly , Kazakhstan will increase the certification of US production facilities for meat and poultry exports . These steps were decided following a recent meeting between US trade officials and five Central Asian countries .
US beef and broiler chicken exports have decreased this year , with China , the largest buyer , significantly reducing its purchases . By April , China ’ s imports of US broiler meat dropped by 79 per cent , and beef imports fell by 10 per cent
compared to the previous year .
Although beef sales to East Asian countries like South Korea have declined , sales to Japan have risen due to a surge in tourism . More robust demand from Mexico and Middle Eastern countries has led to the highest US beef export levels in 10 months .
US Meat Export Federation President and CEO Dan Halstrom noted that these markets benefit from favourable food service demand and currency conditions compared to key Asian markets .
For chicken , emerging markets the deal as a significant achievement for the company ’ s carbon programme and an endorsement of nature-based carbon solutions
This deal is part of a series of actions Microsoft is taking to reduce its carbon footprint . Earlier in June , Microsoft signed an agreement with Anew Climate to purchase over 970,000 carbon removal credits from forest management and afforestation projects across the US .
Additionally , Microsoft has entered into a landmark carbon removal contract with Stockholm Exergi , a six-year offtake agreement with Catona Climate , and a renewable energy credits purchase with Recurrent Energy .
These initiatives collectively represent Microsoft ’ s comprehensive approach to addressing climate change and achieving its sustainability goals .
such as Mexico , Qatar , Iraq , Vietnam , Peru , and the Philippines are showing increased interest , according to the USA Poultry & Egg Export Council .
Despite this diversification , the reduction in China ’ s purchasing power has led to an overall 11.1 per cent decrease in broiler exports in the year ’ s first four months .
Thus , diversifying export markets will be essential for maintaining and growing the US meat export industry ’ s global presence .
Declining Russian wheat prices
RUSSIAN wheat export prices continued downward last week as the new crop entered the market earlier than usual , influencing market dynamics . Based on initial estimates , analysts foresee a potential significant decrease in July exports .
By the end of last week , the price for 12.5 per cent protein Russian new crop wheat for August delivery was reported at $ 216 per metric ton freeon-board ( FOB ), marking a $ 10 decline from the previous week , according to The Institute for Agricultural Market Studies ( IKAR ) consultancy . Sovecon cited a range of $ 221-224 per ton FOB for wheat with similar protein content and nearest delivery , down from $ 227- $ 229 per ton .
IKAR Head Dmitry Rylko attributed the price drop to the peak of the harvesting season and the subsequent increase in supply . Sovecon highlighted active selling by southern farmers despite reduced bids at ports , possibly driven by the need to bolster working capital , a departure from usual practices among well-off producers in the region .
“ The Russian domestic market is beginning to feel the pressure of the harvest ,” Sovecon said in a weekly note .
“ Southern farmers are selling actively despite a sharp decrease in CPT bids at the ports , likely reflecting a need to replenish working capital , which is uncommon for the wealthy southern producers .”
Moreover , Sovecon revised its forecast for the new Russian wheat crop to 84.1 million tons from 80.7 million tons , adjusting production figures across key regions .
As of June 28 , Russian farmers had harvested 10.3 million tons of grain , a stark increase from 2.1 million tons the previous year . The yield was 4.25 tons per hectare , compared to 3.97 tons the last season . The wheat harvest reached 6.9 million tons from 1.47 million hectares , reflecting a yield of 4.68 tons per hectare .
Looking ahead , Sovecon predicted predominantly dry conditions in most regions for the upcoming week , with particularly intense heat anticipated in the southern areas of Russia , according to the Russian Hydrometeorological Centre Scientific Director Roman Vilfand .