Aid, grain rally whittle away US farmer loan demand
Demand for loans in key US agricultural districts has slumped to a seven-year low on a prolonged grain rally and mounting federal aid, but the unpredictability of Covid-19's impact on future conditions has restricted long-term optimism among farm bankers.
Surveys conducted by the Federal Reserve Banks of Minneapolis, Chicago and Kansas City showed farm demand for new non-real-estate loans contracted in the third quarter to the lowest level since 2013, as record government aid compounded with corn futures surging past $4/bushel and soybean values breaching $11/bushel.
Front-month corn and soybean futures have sustained a three-month rally on strengthening global demand, primarily concentrated in China, while livestock and dairy prices have incrementally recovered from the early-year doldrums spurred by the pandemic.
Strengthening agricultural markets have coupled with more than $35bn of federal aid to buoy farm earnings in 2020, increase cash flow and improve credit conditions, according to the US Department of Agriculture (USDA). Nevertheless, loan repayments were stable-to-lower from a year ago.
Dependence on ad-hoc federal aid in farm income — which doubled over the last three years to 9pc of gross income in 2020, according to the USDA — is cause for concern. With most aid exclusive to this season, uncertainty over future aid continues to cloud future lending conditions, according to the Kansas City Federal Reserve.
Fourth-quarter and 2021 outlooks remain muddied among districts because of uncertain government participation next year. The Chicago Federal Reserve bankers anticipate loan repayments to slip in the fall and winter, with asset liquidation to increase during the next 3-6 months. Meanwhile, only a fifth of bankers surveyed by the Kansas City Federal Reserve anticipate repayment rates to slip.
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Phosphates: Indian DAP stocks build in March
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London, 19 April (Argus) — DAP stocks rose by the equivalent of 2-3 import cargoes in March, or nearly 86,000t, as imports and local production outstripped offtake. Indian DAP production reached 218,900t in March, according to FAI data, down nearly 41pc on the same month in 2023. DAP imports reached 201,000t in March, down nearly 54pc on March 2023. Sales of DAP reached 334,200t, down nearly 12pc year on year. Stock draw/build, defined as production plus imports minus offtake, was plus 85,700t. This implies that stocks are still close to 2mn t of DAP, as estimated by the Indian government. Full fertilizer year DAP production (April 2023-March 2024) reached 4.29mn t, down around 1pc year on year. Imports were down 15.4pc at 5.57mn t, mainly due to the loss of supply from China owing to customs inspections, with sales at 10.8mn t, up nearly 4pc year on year. By Mike Nash Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
EPS to register six ammonia-powered newbuilds with SRS
EPS to register six ammonia-powered newbuilds with SRS
London, 17 April (Argus) — Shipping firm Eastern Pacific Shipping (EPS) will register six dual-fuel ammonia powered vessels, due to be delivered from 2026, with the Singapore Registry of Ships (SRS). The commitment is part of an initial agreement with Singapore's Maritime and Port Authority (MPA), vessel classification organisation American Bureau of Shipping (ABS) and Lloyd's Register. EPS said the collaboration with the MPA will extend to supporting crew and seafarer training on the vessels powered by "zero and near-zero emission fuels", in addition to pilot trials of these fuels, and building on the capacity and infrastructure required for ammonia bunkering. Argus assessed the price of green ammonia dob east Asia on a very-low sulphur fuel oil energy density equivalent (VLSFOe) at $2,608.90/t in March, a premium of over $1,975.08/t against VLSFO dob Singapore. Grey ammonia in east Asia was assessed at an average of $829.52/t VLSFOe across March, a premium of $195.70/t to VLSFO dob Singapore. By Hussein Al-Khalisy Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Singapore's MPA, IEA unite on maritime decarbonisation
Singapore's MPA, IEA unite on maritime decarbonisation
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US Gulf lowest-cost green ammonia in 2030: Report
US Gulf lowest-cost green ammonia in 2030: Report
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