US farms to receive $16bn to offset trade war impact
The US government will provide up to $16bn to US farmers this year to offset the impact of the ongoing trade dispute with China, up from $12bn pledged last year.
A second year of the market facilitation program (MFP) will see $14.5bn in direct payments to a broad array of arable, livestock and fruit producers, the US Department of Agriculture (USDA) said today.
The list of eligible products is broader than last year but, like last year, most payment is expected to be made to soybean, corn and wheat farmers.
MFP payments will be made in a way that aims not to distort current farmers' spring planting decisions, the USDA said without providing details. USDA said acres eligible for support payments could not exceed total 2018 plantings.
Payments will be made in 2-3 tranches, with the first payments made in late-July/early-August and subsequent payments dependent on market conditions.
Senate finance committee chairman Chuck Grassley (R-Iowa) said the aid could provide payments of close to $2/bushel on soybeans and 75¢/bushel on corn, at a briefing yesterday.
Many in the market are concerned that the new soybean subsidy will lead to even more soybeans being added to the already well-supplied marketplace, as producers chase the extra premium. If realized, farmers risks depressing commodity prices even after the current trade dispute is resolved.
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Norway's marine bio mandate ineffective: Marine market
Norway's marine bio mandate ineffective: Marine market
London, 29 April (Argus) — Norway's 6pc advanced biodiesel mandate for marine, which came into effect in October, has done little to incentivise the uptake of physical marine biodiesel blends at Norwegian ports, market participants told Argus . As of October 2023, bunker fuel suppliers in Norway must ensure that a minimum of 6pc, on a volume per volume basis, of the total amount of liquid fuels sold per year consists of advanced biofuel in the form of fatty acid methyl ester (Fame) or hydrotreated vegetable oil (HVO). The mandate is only applicable to bunker fuels sold in the domestic market, impacting vessels operating between Norwegian ports as well as local tugboats, offshore supply barges, and fishing vessels. Market participants confirmed that the mandate operates on a mass-balance system at the moment, such that the mandate could also be met by supplying the equivalent amount of biofuels into the inland road sector. Consequently, participants said that very few buyers end up purchasing the physical marine biofuel blends, and instead marine fuel suppliers have had to utilise the mass-balance system to meet their mandated targets. This has resulted in a premium added onto conventional bunker fuels in Norwegian ports of about $56-60/t on average. A market participant described the current system as "like a CO2 tax", with most marine fuel buyers paying the premium rather than purchasing a marine biodiesel blend directly. Participants told Argus that HVO is popular and frequently used in road transport because of its superior specifications compared with biodiesel and its generally low freezing point. Norway's HVO imports typically originate from the US — Kpler data shows that about 68.4pc of HVO flows into Norway have originated from there this year. This is mainly because Norway does not apply the same anti-dumping measures as EU nations, which typically put a substantial premium on US-origin biodiesel imports. Norwegian shipowners going internationally are exempt from being liable to the additional premium imposed by the mandate. But participants told Argus that they usually have to pay the premium and then claim it back from the Norwegian Environment Agency (NEA). The system may change very soon. Market participants told Argus that the NEA is considering some changes to the mandate requirement. A gradual move away from the mass balance system is being discussed, in favour of a physical product mandate that would require biofuel blends to be sold to bunker fuel buyers. Further, a switch from an annual reporting system to a monthly one could also be on the cards. NEA is also reportedly looking at mandating the availability of marine biodiesel at all Norwegian ports and biodiesel fuel reconciliation at the tank rather than terminal. By Hussein Al-Khalisy Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Yara first-quarter gas consumption higher on year
Yara first-quarter gas consumption higher on year
London, 29 April (Argus) — Europe's largest fertiliser producer Yara's European gas consumption in the first quarter was up by 26pc on the year, but remained far lower than in the second half of last year. Norway-based Yara's gas consumption across Europe in January-March totalled 29.2 trillion Btu, well above the 23.1 trillion Btu a year earlier, but drastically down from 37.5 trillion Btu in the fourth quarter last year, the company's latest quarterly report shows. Yara did not report its European ammonia production for the first quarter, but the company's global output totalled 1.74mn t, up from 1.38mn t a year earlier. Yara's first-quarter European gas consumption fell from the preceding three months, despite its average European gas costs falling to $11.70/mn Btu from $13/mn Btu. The firm's European gas costs have declined sharply since peaking at $34.50/mn Btu in the third-quarter 2022, when European wholesale prices hit all-time highs ( see price graph ). Yara's quarterly spending on European gas supplies fell to $343mn in January-March, the lowest since at least summer 2021 when the company began reporting this data, and around one third the $1.08bn peak in April-June 2022. Yara's European gas consumption also fell despite a 37pc annual increase in total fertiliser deliveries in Europe . Lower curtailments, improved production economics and "volume catch-up" had supported output, Yara said. But while European deliveries improved on the year, they remained "below normal" — particularly for nitrates — and Yara sourced a larger share of its European deliveries from its global plants, the company's chief financial officer Thor Giaever said. Yara had hinted earlier this year its ammonia assets might run at 90pc or more of capacity as the company expected to boost production this year . But one explanation for the lower gas demand compared to the previous quarter is Yara may be maximising production at more efficient plants like Sluiskil in the Netherlands and Brunsbuttel in Germany, while ramping down less efficient plants, allowing the company to maintain or increase production while consuming less gas. Yara last year curtailed 19pc of its European ammonia capacity , turning towards greater imports of ammonia to replace the lower production. And that remains key to Yara's business plans , which the company said last week focused on "further strengthening operational resilience and flexibility". Argus assessed European ammonia production prices based on the TTF front-month price at roughly a $100/t discount to northwest European import prices in its last weekly assessment on 25 April, suggesting a still-significant financial incentive to produce ammonia domestically. The European fertiliser market remains under pressure by large volumes from Russia, meaning Europe has swapped an energy dependency on Russia for a food dependency, chief executive Svein Tore Holsether said, echoing previous statements . Comparing global assets Yara consumed 54.4 trillion Btu of gas globally in January-March, down from a multi-year high of 61.9 trillion Btu in October-December ( see consumption graph ). European consumption accounted for roughly 54pc of Yara's global gas demand in January-March, well down from 61pc in the previous quarter. And Yara spent $485mn on gas worldwide in January-March, 71pc for European supply, a lower proportion than at any other point since 2021. Yara's global average gas cost was $8.90/mn Btu in January-March, 24pc below its reported European cost. That discount has been a significant driver for Yara and others to increase production abroad rather than in Europe over the past two years. Yara forecasts its European gas costs at $9.70/mn Btu and $10.50/mn Btu in the second and third quarters of this year, respectively, holding well above its global average gas costs of $7.70/mn Btu and $8.40/mn Btu during those same periods. Globally, the firm aims to produce 8.6mn t of ammonia in 2025, significantly up from 7.8mn t in 2023, it said. By Brendan A'Hearn Yara European vs global gas costs $/MMBtu Yara European vs global gas consumption million MMBtu Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
India's RCF seeks 100,000t of NPS
India's RCF seeks 100,000t of NPS
London, 29 April (Argus) — Indian fertilizer importer RCF has issued a tender to buy two 50,000t lots of 20-20-0+13S. RCF requests delivery of the first lot by 10 June and the second by 20 June. The tender is to close on 3 May, and offers must be valid until 7 May. The tender is open only to suppliers with which RCF has signed long-term agreements. RCF in February bought just over 30,000t of Saudi Arabian 20-20-0+13S from a trading firm at around $359/t cfr duty unpaid, equating to $377/t cfr duty paid/free. The Argus assessment for Indian imports of the grade has remained broadly flat since, largely because of a lack of trade. Indian importers have been buying mainly NPK grades — particularly Russian-produced 10-26-26 — while high stocks have helped to ensure little NPS activity. But the nutrient-based subsidy (NBS) for 20-20-0+13S being raised by just 11pc season on season , compared with 19pc for 10-26-26 and 20pc for 12-32-16, has also helped to nudge demand towards the latter products. By David Maher Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
India's Fact issues tender to buy 15-15-15
India's Fact issues tender to buy 15-15-15
London, 29 April (Argus) — Indian fertilizer producer and importer Fact has issued a tender to buy two 20,000-30,000t lots, plus or minus 10pc, of 15-15-15 product. The tender closes on 13 May at 14:30 Indian Standard Time (IST). The first shipment should be delivered to the port of New Mangalore before 20 June, and the second to Tuticorin during 1-15 July. If suppliers cannot meet these timelines, they can offer to the nearest available date, and these submissions will be considered in the absence of offers that match Fact's desired dates. Offers can be made for either shipment or both. By David Maher Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
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