The Russian shortages of wheat are also being compounded by news of further crop failings in Europe. Germany’s 2010 grain crop is likely to fall to around 44 million tonnes from 49.7 million last year due to poor weather conditions. More recently, Russian wheat plantings for the next season have been estimated at 0.356 million hectares as opposed to 0.964 million hectares this time last year. The continued hot, dry weather is causing the soil to compact so that plantings are difficult due to the dryness and hardness of the soil. We can therefore expect Russia to be experiencing continued shortages which will support wheat prices out into 2011. They will push Kazakhstan to limit their export for any other destination other than Russia.

News of Vale’s acquisition of a majority stage in Fosfertil has been generally received well by Vale investors. Most seem to have forgotten that Vale sold its shares in Fosfertil a few years back before the price spikes. The acquisition will deliver access to vital domestic supplies of superphosphates for a high consumption market. The investment case is considered extremely strong. Rumours of a Brazilian nationalised fertiliser company have been rife throughout the Brazilian farming community for the last couple of years. Vale taking a majority stake in Fosfertil will do much to calm political nerves as a major domestic fertilizer provider is back in Brazilian hands. Arable farming margins in Brazil have improved since the time of extreme high fertilizer prices in 2007 & 2008. Fertilizer price spikes are unlikely to repeat them selves in the short term but a steady increase is realistic and palatable.

Drought has impeded successful winter wheat production in the Ukraine. The harvest will likely only total 20 million tonnes incomparison to 2008’s 25.9million tonnes. Meanwhile domestic domand grows as pork and poultry production increases in pace with domestic and growing export demand.

Meanwhile Ukrainians and Foreign Investors await January’s presidential election with bated breath, all hoping for a new road to economic recovery.

The report can be downloaded from the internet after registration for a password and payment via paypal.We hope you find the report informative and would appreciate any feedback you would like to give, please write to: info@agriinvestpublications.com  Forth coming titles in the pipeline include: ‘Comparing the Agronomic Capability of Kazakhstan, Russia and the Ukraine’  

By Leonardo Prandini, CB&C Ltd Associate
Following a historical period of record prices and sharp expansion in the agribusiness sector, meat supply chain members remain in relatively strong position to face the economic turmoil, thanks to firmness of demand for its non-replaceable end product and export potential to meet local supply imbalances. In this context, the meat sector relies on trade to reach the global food needs and deliver sales. The current reduced capital accessibility and increased credit requirements limit the fast recovery of international meat trade flows.Despite major worldwide price decline since October 2008, the general 30% currency exchange rate devaluation in the main meat exporting countries in the same period (Australia, Brazil, Argentina and Uruguay) underpinned supportive values for local producers at profitable levels.

Centrovet Ltd has recently obtained the SAG provisional registry for the “Subunit vaccine against Infectious Salmon Anaemia” (ISA). The vaccine is the first in its type developed by a Chilean Laboratory, and it is also the first available immunological alternative against this pathology which has devastated the Chilean salmon industry over the last 18 months. If successful, the vaccine will staunch a plague that has wiped out 16 salmon-farming centres and led to hundreds of lay-offs in Chile’s southern regions in the last year. The vaccine, which was obtained from the Virus in the Chilean fishes, has already got the provisional registration from the ‘Servicio Agrícola y Ganadero’ (SAG) and has also been authorized by Chile’s National Fisheries Service (Sernapesca) so that it could become commercialized within two months.

The global crisis, which has cut demand and reduced exports, has been the major block to cash flow for the slaughterhouses. Prior to the crisis, the rising price cycle for beef cattle had already begun to squeeze profit margins and reduce liquidity for slaughterhouses.

In such challenging market conditions a number of large players have been proactive in developing strategies to cope with these difficulties: