Brazil attains status of largest corn exporter

United States corn export dominance is fading in an increasingly competitive global marketplace as Brazil, aided by a new supply agreement with China, is set to out ship the US for just the second time this season.

Meanwhile, Mexico, America's other top market, is preparing to limit imports of genetically modified corn that comprises more than 90% of every US harvest.

The eroding export market share spells trouble for the US$90 billion US corn industry as domestic demand for feeding livestock and producing ethanol has also cooled.

Plantings of America's most widely grown crop are likely to decline and farm incomes could suffer in the years ahead as a result, analysts said.

"When we look at US corn demand long term, we wonder where new demand is coming from," said Stephen Nicholson, global grains and oilseeds sector strategist with Rabobank, an agricultural lender.

"Brazil is likely taking a bigger share of the global market, ethanol has likely peaked and animal protein is likely not going to grow fast enough," he said.

Illinois farmer Richard Guebert is concerned. "We need a good export market for our corn. The seed technology in Brazil is getting better and better each and every year. They're not going away," he said.

Shrinking corn exports echo challenges faced by US soybeans a decade ago as Brazil ramped up production to feed soaring Chinese demand, eventually capturing the top supplier crown in 2013. The country now typically dominates the global soy export market for eight months of the year or more, undercutting US exports.

Brazilian corn exports are expected to flood the global marketplace beginning in July and into the US autumn harvest. The country harvests two corn crops from its tropical soils each year, unlike the US.

Despite the limited demand, US farmers expanded corn seeding this year to the largest in a decade, encouraged by lower seed and fertilizer costs and good planting weather, the government said last week. With a record Brazilian crop flooding the market, US corn farmers could see prices fall.

Still, Rabobank forecasts corn plantings will shrink to 88 million acres (356,123 square kilometers) in the next three years from more than 94 million currently, Nicholson said.

China expanded its list of approved Brazilian corn exporting facilities late last year, jumpstarting shipments from Brazil. Before that, the bulk of China's corn imports had come from the US and Ukraine.

"Brazil has the ability to ramp that planting area up to meet Chinese demand in a way that the United States doesn't," said Matthew Roberts, senior grain analyst with consultancy Terrain.

Through mid-June, US corn exports to China for shipment ahead of the next harvest were down 48% from a year ago, US Department of Agriculture (USDA) data showed.

China's overall corn imports are down about 10% this year, according to customs data, as buyers there await ample supplies of cheap Brazilian corn in the coming months.

"Brazil's winning the game right now. We're just not competitive on price," said one US export trader, citing Brazilian corn offers that are US$30 per metric ton below US Gulf Coast port prices.

Total US corn export sales in April and May were the lowest in at least 22 years, according to weekly USDA export sales data. The period included three weeks in which more purchases were canceled than booked, and the two worst weeks of US corn exports on record.

US corn exporters are hurting from stiff competition from cheaper Brazilian supplies and a strong dollar that makes their produce more expensive to buyers abroad.

Mexico has been a bright spot for US corn exports this season, with sales of the 2022 harvest through mid-June down only 11% from last year, compared with a 36% year-on-year drop sales to all destinations, according to USDA data.

An ongoing dispute over Mexico's decree to ban some biotech corn imports may risk disruption to US shipments, analysts said. The country is boosting corn production by about 2 million tons, the agriculture ministry said.

US corn exports in the 2022-23 marketing year that ends on August 31, 2023 are currently projected at 43.817 tons, a decade low representing a 24.8% share of global trade, according to USDA data. Brazil's projected exports were seen at a record 55 million tons.

Rapid growth in Brazilian corn production offset loss of much of the corn exports from Ukraine since Russia’s invasion.

It is the second smallest US share of the global corn market on record, behind only the 2012-13 season when a severe drought slashed production and sent prices to record highs.

Some analysts expect the USDA to cut its exports outlook in its next monthly report to be released on July 12, 2023.

The USDA forecasts 2023-24 US corn exports at 53.342 million tons, remaining behind Brazil's 55 million ton outlook.

 

Expression of solidarity with Jenin

In various parts of the world, pro-Palestine activists have organized vigils to protest against Israel's recent invasion of the occupied West Bank city of Jenin.

These demonstrations took place in Rome, Italy; Sydney, Australia; Barcelona, Spain; and New York City, United States. The activists stood in solidarity with Jenin and expressed their opposition to the invasion.

Israel's extensive and all encompassing aggression on the city of Jenin commenced on the morning of Monday, July 3, and persisted for 48 hours.

The assault resulted in unprecedented destruction in Jenin, the captivity of 120 Palestinians, and the tragic killing of 12 individuals, with over 140 others sustaining injuries. The resistance forces also achieved a significant feat by obliterating numerous military vehicles belonging to the Zionist regime. 

According to reports from the regime itself, an Israeli soldier lost his life during the operation, while at least five quadcopters were downed by the resistance forces.

Israel's recent attack on Jenin and its subsequent destruction of the city's infrastructure has garnered widespread condemnation from various corners of the world. 

The global community has expressed its outrage both online and through public opinion. 

Anniken Huitfeldt, the Norwegian Foreign Minister, stood in solidarity with the people of Jenin and vehemently denounced violence against civilians. 

In a tweet following her conversation with Palestinian counterpart Riyad Malki, Huitfeldt stated, "In a call today with my Palestinian counterpart Dr. Riyad Malki, I expressed Norway's solidarity with the people of Jenin. I condemned the high level of violence and all attacks against civilians. Any military measure must comply with international law. The cycle of violence must end."

Despite the Zionist regime's anger over the condemnation by the Norwegian foreign minister, the global response to Israel's crimes has been widespread.

Irish MP Frances Black emphasized the urgent need to acknowledge the destruction caused by Israel, with complicity from the international community, including Ireland. Black questioned when the government would finally take action.

Moreover, thousands of Jordanians rallied in Amman to show their support for Palestinians in Jenin. 

In Bangladesh, pro-Palestine advocates also protested against Israel's brutal attack on the Jenin refugee camp. Additionally, players from Club Deportivo Palestino wore armbands as a symbol of sympathy for the Palestinian victims of the recent Israeli offensive in Jenin.

 

Understanding India’s Bangladesh policy

Historically, Sheikh Mujeeb and his daughter Sheikh Hasina have enjoyed the support of the successive Indian governments. In the forthcoming general elections it is difficult to infer if India still supports Hasina.  

Indian External Affairs Minister Dr Subramaniam Jaisankhar’s recent address in New Delhi to celebrate the ninth anniversary of the Bharatiya Janata Party has created conflicting reactions in the Awami League and the Bangladesh Nationalist Party.

Dr Jaisankhar iterated in his address in New Delhi what prime minister Narendra Modi signed in the joint declaration namely India’s commitment not to interfere in Bangladesh’s forthcoming general elections.

These developments could also be the game-changer for holding Bangladesh’s next general elections freely and fairly and dealing with the existential threat that a flawed national election would pose for the country.

The statement has disappointed the Awami League, making many of its followers apprehensive. Bangladesh’s foreign minister Dr AKA Momen openly sought New Delhi’s help for a fourth consecutive term for the Awami League on an official visit to New Delhi in 2022. His plea was widely reported in the Indian and Bangladesh media.

Bangladesh’s opposition parties led by the BNP have been in the political wilderness since the Awami League came to power in January 2009. They have been oppressed, incarcerated and subjected to enforced disappearances and other forms of oppression.

The US-west-UN and international rights organizations have accused the Awami League in recent times of the violations that are protected by UN charters with Bangladesh on the cusp of its next general elections.

India had stood steadfastly behind the Awami League till Dr Jaisankhar’s recent statements. It provided seminal support to the Awami League to become and remain the dominant power in Bangladesh. While New Delhi remained silent, the US-led west became vocal against the Awami League up until the Indian prime minister’s Washington visit.

Two instances underline India’s prime role in placing the Awami League in its present position of dominance.

India’s former president Pranab Mukherjee’s soft corner for the Awami League and Sheikh Hasina were open secrets in Bangladesh, thanks to his prolific writings. He wrote that he had assured General Moeen U Ahmed not to worry about his safety and future after his military rule had ended when the latter met him in February 2008 in New Delhi.

Many now believe that the former Indian president won the general over on the side of the Awami League. The Awami League won the December 2008 elections by a landslide. Its victory was expected but not the margin. General Moeen U Ahmed supervised the general elections.

The other instance of India’s interference in Bangladesh’s domestic politics was the infamous visit of the Indian foreign secretary Sujata Singh to Dhaka before Bangladesh’s 2014 general election. She arm-twisted President HM Ershad, many say blackmailed, to participate in the 2014 elections. India’s interference allowed the Awami League to hold the 2014 elections that the BNP-led opposition boycotted.

India’s interference helped the Awami League to also abort the BNP-Jamaat’s movement for the restoration of the caretaker government system that it had forced the BNP to adopt in the constitution as the 13h amendment in 1991–96 with Jamaat and Jatiya Party as allies.

Sheikh Hasina claimed while leading the 1991–96 movement that the caretaker government system was the panacea for changing government peacefully in an emerging democracy. She wanted the caretaker government system to be in the constitution ‘forever.’

India’s interference also legitimized the 15th amendment under which the Awami League held the 2014 elections. The BNP’s effort to establish the amendment as the Awami League’s constitutional mechanism for its BAKSAL vision failed because India led the Awami League’s claim that the BNP and Jamaat were supporters of Islamic terrorism and Islamic fundamentalism that the US-led West accepted wholeheartedly. The result of the 2014 elections was a shame not just to Bangladesh but also to all those who supported it. There was no election to 154 of the 300 seats.

Bangladesh’s present crisis is similar but more dangerous than that it faced leading to the 2014 elections with important changes down the road. One perceptible change has been in India’s role in the 2018 elections. New Delhi stayed away from it despite repeated appeals by the Awami League for help. The Awami League even claimed in making its desperate appeals to New Delhi, leading to the 2018 elections that many hundreds and thousands of its supporters would be killed if it lost power.

The Awami League still won in 2018 elections. It had, meanwhile politicized the civil bureaucracy, the law enforcement agencies and the Election Commissioner in its favour in such a manner that they ensured ballot boxes managed votes to be stuffed in its favour the midnight before the election.

The 2018 elections earned the ‘midnight elections’ nickname. The BNP flagged the futility of participating in a general election under the 15th amendment but was forced to take part in it because it would have, otherwise, lost its registration for abstaining from two consecutive general elections. It was no wonder, therefore, that the Awami League won 293 of the 300 seats in the 2018 elections.

Dramatic changes have occurred in the international order since Bangladesh’s 2018 election. Islamic terrorism and Islamic fundamentalism that had made the US-west-UN allow the Awami League to do anything to remain in power leading to the 2014 and the 2018 elections are now out of the radar.

These powers have now come together for democracy, human rights and a free and fair general election in Bangladesh at a time when it is clear that the country cannot withstand another election similar to the 2014 and 2018 elections. It is now also clear that there cannot be any election in Bangladesh under the 15th Amendment without pushing the country towards an existential crisis.

India which was an ally of the US-West in Bangladesh’s controversial 2014 and 2018 elections, nevertheless, had remained silent about the dramatic changes. It kept Bangladesh across its political divide, waiting, aware that its role would be very crucial.

Most Bangladeshis were not inclined to believe that the US-west-UN would not be able to force a peaceful change of government in Bangladesh without India. A great many believed that New Delhi and Washington would, in the end, back a fourth term for the Awami League.

India’s Prime Minister Narendra Modi’s recent visit to Washington answered Bangladesh’s waiting, almost. Narendra Modi did not speak for the Awami League as its supporters expected. He agreed instead through paragraph 36 of the 58-paragraph joint declaration of the summit to support ‘freedom, democracy, human rights, inclusion, pluralism, and equal opportunities for all citizens.’

Thus, by interpretation, he dittoed the recent initiatives of the United States in Bangladesh for democracy and human rights, particularly for holding Bangladesh’s next general election in a manner where every voter would be able to vote freely, fairly and without fear.

 

US cluster munitions sale to Ukraine must be stopped

The world has not really raised voice against the US proxy war going on in Ukraine since February 2022. Little effort has been made for establishing truce. On the contrary, the United States and its allies have sent the latest as well as outdated arms worth billions of dollars to Ukraine. 

The latest news is that the US is getting ready to supply banned cluster munitions to Ukraine. This shipment must be stopped to save hundreds of civilians who may dies due to its indiscriminate use.

According to Reuters, the United States announced on Friday that it would supply Ukraine with widely banned cluster munitions for its counteroffensive against occupying Russian forces.

Rights groups and the United Nations secretary-general questioned Washington's decision on the munitions, part of an US$800 million security package that brings total US military aid to more than US$40 billion since Russia's February 2022 invasion of Ukraine.

Russian President Vladimir Putin, who describes the conflict as a "special military operation" to protect Russian security, has said the US and its allies were fighting an expanding proxy war.

The cluster munitions will deliver in a time frame that is relevant for the counteroffensive, a Pentagon official told reporters.

Cluster munitions are prohibited by more than 100 countries. Russia, Ukraine and the United States have not signed on to the Convention on Cluster Munitions, which bans production, stockpiling, use and transfer of the weapons.

They typically release large numbers of smaller bomblets that can kill indiscriminately over a wide area. Those that fail to explode pose a danger for decades after a conflict ends.

Ukraine has provided written assurances that it is going to use these in a very careful way to minimize risks to civilians, White House national security adviser Jake Sullivan said.

US President Joe Biden described the decision on cluster bombs as difficult but said Ukraine needed them.

Human Rights Watch has accused Russian and Ukrainian forces of using cluster munitions, which have killed civilians.

Russian Ambassador to the United States Anatoly Antonov criticized the transfer of these weapons to Ukraine by the US.

"The cruelty and cynicism with which Washington has approached the issue of transferring lethal weapons to Kyiv is striking," TASS news agency on Friday quoted Antonov as saying.

"Now, by the fault of the US, there will be a risk for many years that innocent civilians will be blown up by submunitions that have failed."

Ukraine says it has taken back some villages in southern Ukraine since the counteroffensive began in early June, but that it lacks the firepower and air cover to make faster progress.

"It's too early to judge how the counteroffensive is going one way or the other because we're at the beginning of the middle," Colin Kahl, the US under secretary of defense for policy, told reporters.

Erdogan demands Black Sea grain deal extension

Turkish President Tayyip Erdogan said on Saturday that he was pressing Russia to extend a Black Sea grain deal by at least three months and announced a visit by President Vladimir Putin in August.

Turkey, a NATO member, has managed to retain cordial relations with both Russia and Ukraine over the past 16 months of the war and last year it helped to broker prisoner exchanges. Turkey has not joined its Western allies in imposing economic sanctions on Russia but has also supplied arms to Ukraine and called for its sovereignty to be respected.

He was speaking at a joint news conference with Ukraine President Volodymyr Zelenskiy after the two parties met to discuss the fate of an arrangement, brokered last year by Turkey and the United Nations, to allow for the safe export of grain from Ukrainian ports via the Black Sea despite the war.

Zelenskiy's visit followed stops in Bulgaria and the Czech Republic, part of a tour of some NATO capitals aimed at encouraging them to take concrete steps at a summit next week towards granting Kyiv membership of the alliance, which Erdogan said Ukraine deserved.

Erdogan said work was under way on extending the Black Sea grain deal beyond its expiration date of July 17 and for longer periods beyond that. The deal would be one of the most important issues on the agenda for his meeting with Putin in Turkey next month, he said.

"Our hope is that it will be extended at least once every three months, not every two months. We will make an effort in this regard and try to increase the duration of it to two years," he said at the news conference with Zelenskiy.

Both men said they had also discussed another key question for Erdogan's talks with Putin ‑ the question of prisoner exchanges, which Zelenskiy said had been the first thing on their agenda. "I hope we will get a result from this soon," Erdogan said.

Zelenskiy said he would wait for a result to comment but made clear the discussion had gone into specifics on returning all captives including children deported to Russia and other groups.

"We are working on the return of our captives, political prisoners, Crimean Tatars," he said, referring to members of Ukraine's Muslim community in the peninsula annexed by Russia in 2014. "Our partners have all the lists. We are really working on this."

Erdogan said the issue could also come up in his contacts with the Russian leader before his visit. "If we make some phone calls before that, we will discuss it on the call as well," he said.

The Kremlin said it would be watching the talks closely, saying Putin has highly appreciated the mediation of Erdogan in attempting to resolve the conflict in Ukraine.

"As for forthcoming contacts between Putin and Erdogan, we do not rule them out in the foreseeable future," Kremlin spokesman Dmitry Peskov told reporters ahead of the Istanbul talks with Zelenskiy, which began on Friday.

Russia, angry about aspects of the grain deal's implementation, has threatened not to allow its further extension beyond July 17.

 

Pakistan Stock Exchange benchmark index posts 6.65%WoW gain

The week ended on July 07, 2023 started on a very positive note, with the market going up 2,000 points from the opening bell and closed the day at 43,899 points.

The rally was mainly driven by the positive sentiment coming out from the Eid Holidays as the country’s authorities reached Staff Level Agreement with the IMF on June 30, 2023. Overall, market ended gaining 2,754 points or 6.65%WoW during the week, breaking the 44,000 barrier during Thursday's trading session, up 660 points in intraday trade.

The market capitalization rose to PKR6,685 billion, up from PKR6,361 billion. In terms of volume, WTL topped the list with 162.97 million, followed by CNERGY with 103.65 million shares.

Foreign exchange reserves held by State Bank of Pakistan (SBP) rose to US$4.5 billion on June 30, from US$4.07 billion on June 23, reflecting an increase of 10%WoW. Total liquid reserves on June 30 were reported at US$9.7 billion, representing an increase of 4%WoW. Moreover, CPI for June 2023 clocked at 29.40%YoY.

Other notable news for the week include: 1) price of petrol was left unchanged at PKR262 per litre, whereas the price of High Speed Diesel was raised to PKR260.5 (effective beginning July); 2) Pakistan’s trade deficit for June 2023 was reported at US$1.81 billion as compared to US$2.13 billion a month ago; 3) the GoP increased advance income tax rate for commercial importers to 6%, from 5.5%; 4) IMF put Pakistan’s external funds requirement at US$91.5 billion over the next three years; 5) the GoP’s total debt skyrocketed to PKR58.96 trillion in May 2023 due to the increased domestic and external borrowing; 6) SBP reserves further increased by US$ 393 million to US$4.463 billion; 7) Saudi Arabia invested US$0.59 billion under SIFC; 8) Pak Eurobond yields witnessed a significant increase on a MoM basis.

Sector wise, Modarabas/Leasing Companies/Synthetic & Rayon have been worst performers, whilst Refinery remained an anomaly.

Top performing scrips of the week were: NRL, AIRLINK, AVN, UNITY, and INIL, while top laggards were: PGLC, IBFL, GADT, EFUG, and PAKT.

Flow-wise, major net selling was recorded by Banks/DFIs with a net sell of US$5.48 million. Insurance Companies absorbed most of the selling with a net buy of US$5.72 million.

After the bullish end to the previous week, market participants await further clarity regarding the IMF bailout package. The market may observe momentum once the lender concludes its board meeting on July 12, 2024. It is believed that the country's impending risk of default diminish before the market can establish its direction.

Analysts reiterate stance to follow a cautious approach while picking up scrips and continue to advocate dollar-denominated revenue stream scrips (Tech and E&P sector) to hedge against currency risk or high dividend-yielding scrips.

  

 

 

 

 

Saudi Arabia prohibits 30 items in baggage

King Abdulaziz International Airport in Jeddah announced that 30 items are prohibited from being carried in baggage of flight passengers. The airport authorities stated that such goods will be confiscated, and passengers will have no right to claim these.

The airport alerted departing Hajj pilgrims not to carry any of these dangerous and prohibited items in their baggage. Out of these, 16 items are prohibited from being carried in the flight cabins. These materials include knives, compressed gases, toxic liquids, blades, baseball bats, skateboards, explosives or crackers.

Prohibited items include firearms, magnetic materials, radioactive or corrosive materials, equipment, nail clippers, shears, meat cleavers, and ammunition.

The list of dangerous materials that are prohibited from being transported in all baggage included 14 items, such as oxidants, organic peroxides, radioactive materials, electric shock devices, disabling devices, automatic skateboards, liquid oxygen devices, in addition to toxic or biological materials that transmit infection, matches, lighters and flammable liquids.

Among the prohibited materials are compressed gases, explosives or crackers, firearms and imitation weapons, magnetic materials, and corrosive materials.

The airport authorities stressed that these 30 prohibited items will be confiscated and passengers will have no right to claim these. The passengers have been advised to contact their respective airlines for more details.