Lawsuit Adds to Concern Over China Commodities Fraud – NYTIME 27-Jun-2014 06:01 HONG KONG — China’s commodities fraud scandal continues to widen, with more companies reporting losses on bogus aluminum and copper financing deals, while Chinese authorities now say gold contracts have also been faked to secure more than $15 billion in loans. On Thursday, a coal producer in the northeastern city of Taiyuan, in Shanxi Province, said it had filed a lawsuit to reclaim about $170 million it said it was owed. The producer named among the defendants the Chinese company at the center of an investigation into aluminum and copper financing fraud at Qingdao Port, in northeastern Shandong Province. The lawsuit, filed by Shanxi Coal International Energy Group, claims that Dezheng Resources and one of its subsidiaries, Qingdao Decheng Mining — the two main companies under investigation in Qingdao for suspected fraud — had acted as guarantor in several contracts to import aluminum. The suit, which also names four other companies, is asking the high court in Shanxi Province to award two payments of $120.4 million and 352.5 million renminbi, or $57 million, that Shanxi Coal said it was owed because the defendants allegedly failed to honor their obligations under the contracts. News of the lawsuit came as China’s top government auditor released a report on Tuesday indicating that gold had also been used in fraudulent commodities financing deals. The National Audit Office said that since 2012, it had conducted spot checks that caught 25 domestic gold producers conducting “fake trades” to secure loans with a value of 94.4 billion renminbi. These financing deals involved a form of illegal arbitrage between bank interest rates and foreign currency exchange rates and yielded a profit of around 900 million renminbi, according to the auditor. The report did not identify the gold companies and banks involved, or say whether anyone had been punished. Chinese companies have long relied on imported commodities like copper, aluminum and iron ore to obtain short-term financing, which is legal. But as the country’s economic growth rate declines to the slowest pace in more than a decade, signs are emerging that at least some of these deals have been fictitious and fraudulent. In Qingdao, Chinese authorities are investigating whether Dezheng Resources acted with its subsidiaries fraudulently to obtain loans by pledging and re-pledging the same stockpiles of metals as collateral to multiple banks. Several Chinese and global banks are working to determine their level of exposure to potential losses in the Qingdao case, including Citigroup, Britain’s Standard Chartered Bank and South Africa’s Standard Bank. On Thursday, Standard Chartered’s chief executive, Peter Sands, said the bank’s total exposure to commodity-related financing in the Qingdao area was about $250 million. This amount was spread across multiple locations and multiple types of financing deals, “not all of which will be affected by what appears to have happened,” he added. “On the Qingdao situation, we’re obviously engaged in understanding and protecting our interest in what is quite a rapidly unfolding situation,” Mr. Sands said, speaking on a conference call for investors. “It’s still quite unclear about what’s actually going on there.” Last week, Citic Resources, a Chinese state-owned commodities trader, said that about 100,000 tons of alumina, also known as aluminum oxide, had gone missing at the port in Qingdao. The company, which also produces oil and coal and is a unit of the state-owned conglomerate Citic Group, said in an announcement to the stock exchange in Hong Kong that it had secured a court order to secure about 253,000 tons of alumina and about 8,000 tons of copper to which it has legal title at the port of Qingdao. However, Citic Resources said it had not been able to locate more than half of its alumina, worth an estimated $43 million. Qingdao’s port ranks as the country’s fifth-largest in terms of cargo handled, with around 12 percent of China’s metal ore and 15 percent of crude oil shipments by volume, according to Qingdao Port International, the city’s main port operator. The operator first disclosed the fraud investigation in a stock exchange filing on June 6.
VEGOILS-Palm down for 2nd day as crude cools, but records 3rd weekly gain FCPOc3 – RTRS 27-Jun-2014 05:30 Weekly prices up 0.1 pct, posts 3rd straight gain Palm prices easing alongside crude oil -trader Oil steadies around $113 as Iraq supply worries ease Palm prices to drop as Indonesia lags biodiesel targets-Mistry
By Anuradha Raghu KUALA LUMPUR, June 27 (Reuters) – Malaysian palm oil futures fell for a second session on Friday as easing crude prices reined in biodiesel-driven demand for the tropical oil, and as weakness in comparative soyoil markets dragged. Benchmark prices shot up to a near one-month high of 2,511 ringgit earlier this week, as violence in Iraq sparked fears of supply disruptions from OPEC’s second-largest producer, in turn making palm a more attractive option for biodiesel feedstock. This demand cooled off as crude prices eased later. Palm prices, however, recorded their third straight weekly gain with a 0.1 percent rise. “The palm market went up along with higher crude oil. When that came down, our market also followed,” said a trader with a foreign commodities brokerage, adding that overnight losses in soy markets also weighed on palm prices. The benchmark September contract FCPOc3 on the Bursa Malaysia Derivatives Exchange inched down 1 percent to 2,445 ringgit ($761) per tonne by Friday’s close. Total traded volume stood at 36,041 lots of 25 tonnes, higher than the average 35,000 lots. Brent crude LCOc1 was up 10 cents at $113.31 a barrel by 0930 GMT after falling 79 cents in the previous session, consolidating after one of its biggest weekly falls this year as investors unwound positions on reduced concerns over exports from strife-torn Iraq. O/R U.S. crude CLc1 was down 5 cents at $105.79 a barrel. For the week, the contract has fallen 1.4 percent. Technicals showed palm oil’s next target is 2,422 ringgit, although it faces a resistance at 2,513-2,554 ringgit, according to Reuters market analyst Wang Tao. (Full Story)
Palm oil prices could drop to between 2,300-2,500 ringgit per tonne over the next few weeks, missing an earlier forecast by about 13 percent given Indonesia’s disappointing uptake of palm-based biodiesel, leading vegetable oil analyst Dorab Mistry said on Thursday. (Full Story) Mistry said while demand would be robust at the lower end of this range, a rise to near 2,500 ringgit could curb interest and push up Malaysian palm stocks to a peak of 2.5 million tonnes by November. Stocks at end-May stood at 1.84 million tonnes. “Many people say that the price level now is on the higher side, and that it should go lower,” the trader added. Another Kuala Lumpur-based commodities dealer said easing palm prices will likely provide a weaker tone for next week. Strength in the Malaysian currency on Friday also stemmed buying interest from overseas investors and refiners. The ringgit MYR=MY rose as much as 0.4 percent to 3.2050 against the greenback on Friday, buoyed by expectations that Malaysia’s central bank will raise interest rates next month. EMRG/FRX But the current hot and dry weather across Malaysia capped losses, keeping palm prices in a tight range between 2,436-2,469 ringgit. Short spells of dry weather can hinder growth of palm fruit. Some market players say the heat could be early signs of the drought-inducing El Nino weather pattern, which is slated to hit Southeast Asia later this year. In competing vegetable oil markets, the U.S. soyoil contract BOZ4 fell 0.2 percent in late Asian trade, while the most active soybean oil contract DBYcv1 on the Dalian Commodities Exchange shed 0.6 percent.
Palm, soy and crude oil prices at 1012 GMT
Contract Month Last Change Low High Volume MY PALM OIL JUL4 2468 -19.00 2461 2479 300 MY PALM OIL AUG4 2462 -19.00 2454 2479 1998 MY PALM OIL SEP4 2445 -25.00 2436 2469 21641 CHINA PALM OLEIN JAN5 5994 -62.00 5988 6048 332588 CHINA SOYOIL JAN5 7004 -40.00 6992 7052 346808 CBOT SOY OIL DEC4 40.76 -0.10 40.62 40.99 3626 NYMEX CRUDE AUG4 105.83 -0.01 105.48 105.97 15019
Palm oil prices in Malaysian ringgit per tonne CBOT soy oil in U.S. cents per pound Dalian soy oil and RBD palm olein in Chinese yuan per tonne Crude in U.S. dollars per barrel
27-Jun-2014 05:18 – TUNISIA WILL IMPORT 300.000 TONNES OF DURUM WHEAT, 400,000 TONNES OF BARLEY 27-Jun-2014 05:18 – TUNISIA’S CURRENT STOCK OF GRAIN FOR DOMESTIC CONSUMPTION ENOUGH FOR ANOTHER THREE MONTHS Tunisia rises grain harvest estimate to 2.36 mln tonnes – RTRS 27-Jun-2014 05:26 TUNIS, June 27 (Reuters) – Tunisia lifted estimates of the grain harvest this season to 2.36 million tonnes from 2.2 million, but it will need to import 1.6 million tonnes including 900,000 of soft wheat, officials told Reuters on Friday
Mill in Oman buys about 60,000 T Russian wheat -trade – RTRS 27-Jun-2014 02:49 HAMBURG, June 27 (Reuters) – A mill in Oman has purchased about 60,000 tonnes of Russian-origin milling wheat, European traders said on Friday. It was purchased at $257 a tonne on an fob basis for October shipment, traders said. A mill in Oman had also bought 60,000 tonnes of Russian wheat on June 4.
Iraq faces serious food security concerns due to conflict – FAO – KUWANA 27-Jun-2014 01:45 ROME, June 25 (KUNA) — The UN Food and Agriculture Organization (FAO) on Wednesday raised the alarm over the food insecurity risks facing Iraq as a result of the rampant conflict and the subsequent displacement of farmers. Over one million people so far have fled their homes and farms since January, leaving behind jobs and possessions just as the main harvesting season for wheat and barley crops was getting under way, according to a FAO statement here. In total, two million Iraqis are now displaced within the country, including those affected by the Syrian conflicts and previous events in Iraq. As a result, Iraq’s favourable crop forecast for 2014 is now in jeopardy, according to FAO’s Global Information and Early Warning System (GIEWS) alert. Prior to the crisis, plentiful rainfall meant the Organization had predicted an above-average wheat harvest of three million tonnes for this year, some 16 percent above the five-year average. The barley crop was also expected to hold steady at 900 000 tonnes, still 15 percent above the five-year average, the statement pointed out. Now, however, prevailing civil insecurity and associated access problems, labour shortages, and disruptions in transport and marketing are expected to significantly impact harvesting and domestic production and supply. The governorates most affected by the current conflict, Nineveh and Salahaddin, on average contribute nearly a third of Iraq’s wheat production and about 38 percent of its barley. Cereal import requirements for 2014-2015 are now expected to increase. In the 2013-2014 marketing year that is just ending, cereal import levels were estimated at 4.26 million tonnes, including 2.7 million tonnes of wheat and 1.3 million tonnes of rice. As the availability of staple food commodities like wheat will be affected, food access for many market-dependent households, poor families and the displaced will likely deteriorate further. And although full information on food prices is not yet available, costs of staple commodities are likely to rise, the statement noted. For instance, reports indicate that in Nineveh and Salahaddin governorates, grain reserves are being depleted and levels of available food via the public distribution system are fast deteriorating. The system is the main source of food for the poorest Iraqis, providing them with subsidized rice, wheat flour, oil, sugar and baby milk formula. “If the conflict continues, basic food commodities and other essential items will be increasingly unavailable to the most vulnerable, despite government subsidies,” said FAO Representative in Iraq, Fadel El-Zubi. “The conflict and displacement has also coincided with the peak of summer heat and the holy month of Ramadan, when household expenditures on food and other essential items are normally higher,” El-Zubi affirmed. In addition to the governorates, which are the epicentre of the ongoing conflict and civil insecurity, the northern Kurdish region of Iraq is also under pressure, since it is now hosting a large share of people who have fled their homes in addition to some 225 000 Syrian refugees. According to the FAO report, animal diseases are already a threat to livestock in Iraq and a danger to public health, particularly for refugees and people who have been displaced. FAO called for USD 12.7 million to provide urgent support to farming families , particularly in crop and livestock production, to mitigate the damage to food, income and employment sources. The Organization needs to secure funds by July/August to provide crisis-affected farmers with seeds and fertilizers in time for the October/November cereal planting season where open field cultivation is possible. FAO also gives high priority to helping vulnerable families with more immediate means of feeding themselves and generating income through backyard vegetable and poultry production as well as cash-for-work activities in partnership with the World Food Programme. Another crucial focus is the provision of animal feed and veterinary services to help safeguard animal heath and livestock production in the country, which includes 8 million sheep, over 2.5 million cattle, 1.5 million goats and 38 million chickens. (end) mn.gb
Russia’s key wheat export region records lower yields so far – RTRS 27-Jun-2014 00:36 MOSCOW, June 27 (Reuters) – Russia’s largest Black Sea farm region of Krasnodar is starting wheat harvesting after a delay due to rains and with lower yields than last year, the regional agriculture ministry said on Friday. Russia, one of the world’s main wheat exporters, is set to increase its wheat crop by 2 percent to 53 million tonnes with 19 million tonnes available for export, according to the latest Reuters poll. Krasnodar region, also known as Kuban, the key region for wheat export via the Black Sea, harvested 24,000 tonnes of winter wheat with yields of 4.90 tonnes per hectare as of June 26, the ministry said in statement. At the same time a year ago, the harvesting campaign was very active thanks to favourable weather with 1 million tonnes of wheat harvested with yields at 5.15 tonnes per hectare. Across all grains, the region has already harvested 0.7 million tonnes from 8 percent of the area with yields at 5.30 tonnes per hectare, the ministry added.
40% deficient monsoon in June, IMD hopeful of better rains in July – HINDUT 26-Jun-2014 22:45 New Delhi, June 26 — There has been a 41% deficiency in the monsoon so far but the Indian Meteorological Department (IMD) is hopeful that it will strengthen after the first week of July.
According to data on the IMD website, the normal rainfall from the period of June 1 to June 25 should have been 132.1 mm. As against this, there has been a rainfall of only 77.6 mm – deficient by 41%.
The weather office had already predicted an overall 7% deficiency in the monsoon for this year.
Northwest India -West Uttar Pradesh, Delhi, Punjab, Haryana and Rajasthan included – will have to wait some more for the monsoons to arrive, according to weather officials.
The normal date of arrival for monsoon in Delhi is June 29.
Officials are not giving any predictions for Delhi yet.
“There is no doubt that the monsoon progress is very weak and slow. I don’t see any monsoon driver in the next few days,” said GP Sharma, vice president, meteorology, Skymet, a private monsoon forecaster
The monsoon had lost steam in the last few days, adding to the economic anxieties of the country as it could affect farm yield driving up food prices further. Published by HT Syndication with permission from Hindustan Times. For any query with respect to this article or any other content requirement, please contact Editor at
China to aid corn processors, weekly state sales flat – RTRS 26-Jun-2014 19:34 BEIJING, June 27 (Reuters) – China’s state corn sales were almost flat this week as high floor prices dented bidding interest, while Beijing agreed to offer state reserves at discounted prices to loss-making corn processors to help boost sales. The State Council, or cabinet, said on Wednesday that the government will offer aid to corn processors to help ease tight storage capacity in the major growing areas in the northeast. It did not give any details. Heilongjiang province, the country’s top corn area, has agreed to offer a subsidy of 100 yuan ($16.11) a tonne to corn processors buying state reserves. The industry produces products ranging from corn starch to alcohol. The government will also build new storage facilities able to store 50 million tonnes of grains this year.(Full Story) Beijing has stockpiled more than 90 million tonnes of corn over the past two years amid a bumper domestic harvest and lower-than-expected demand. (Full Story) China, the world’s second-largest corn consumer, has been rejecting corn imports from the United States due to the presence of an unapproved variety of genetically modified corn. (Full Story) (Full Story) This week, the government sold a total of 981,055 tonnes of corn during two auctions, 19.6 percent of the offered volume of 4,996,681 tonnes at an average price of 2,238 yuan ($360) per tonne, according to the National Grain and Oil Trade Centre. The following table shows the weekly corn sales: Volumes offered Volume sold Average price (yuan/tonne)
June 25-26 4,996,681 981,055 2,238 June 18-19 5,000,036 918,203 2,240 June 11-12 5,009,278 1,762,604 2,274 June 5 3,502,637 1,047,233 2,206 May 29 3,511,068 1,848,558 2,183 May 22 1,000,024 988,843 2,182
($1 = 6.2090 Yuan ) Keywords: TUNISIA GRAIN