In this issue we focus on recent activity in the agriculture sector.
February was another steady month for commodity markets. The geopolitical situation in Iran and Syria helped energy prices with the benchmark Brent crude increasing by about 12%.
In metals, platinum and silver rose approximately 7%, while in the agricultural markets the prospect of increasing Chinese demand and reports of dry weather in Brazil increased soybean prices by 8%. Cotton, however, continued its downward trend as a consequence of high stocks and low demand.
Sugar has the attention of investors following recent announcements from Brazil and Indonesia. Brazil’s sugar mills — the world’s largest producers of raw sugar and cane-based ethanol — have decided to convert more cane into ethanol, potentially reducing the amount of raw sugar available to world markets; whilst Indonesia — Southeast Asia’s largest sugar consumer — announced during the month that it will only issue import permits for raw and not refined sugar in the future, as it seeks to build its domestic refining industry.
As a result sugar finished February as one of the highest risers in agriculture with an increase of some 10%.
Brazil has in the past month made clear its intention to provide more
halal meat into the US$400 billion global market. About 40% of Brazil’s total meat exports are currently certified
halal, with more than 95% of production exported to Middle East and Arab Asian countries. Currently, 100 Brazilian beef companies are submitting their
halal certifications to the
Arab-Brazilian Chamber of Commerce and another 25 companies are likely to follow.
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