What We're Watching This Week - Oct. 17, 2016

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European Union Reviews Agriculture Emission Targets:


European environmental ministers are scheduled to meet in Brussels today to evaluate agriculture emission targets proposed by the European Commission. Concurrent discussions over indirect land use targets will also be watched not only by the European biodiesel industry, but also by global oilseed producers. Rapeseed accounted at one point for roughly 80% of the European Union’s biodiesel feedstock. In the past five years, the share of rapeseed used in biodiesel has dropped by 12%, owing, in part, to increased competition from cheap imported palm oil. The rapid switch from rapeseed oil to palm oil has global implications. Gro Intelligence’s agriculture data platform shows that the amount of rapeseed crushed in the region is expected to have dropped by nearly 10% between 2014 and 2016. On the other hand, representatives from the University of California were in Europe last week touting a study commissioned by the California Air Resources Board (CARB) that classified rapeseed as an environmentally friendly biofuel feedstock based on its low indirect land use change (ILUC) impact. This more-comprehensive environmental view contradicts a widely heralded study from researchers at the University of Twente, which is partially credited for encouraging the European Union to re-evaluate its support of food-to-fuel subsidies.

Indian Government Is Egging on Domestic Poultry Industry:


Even as poultry producers in the United States are struggling with excess egg supply, India faces the opposite problem. Data from India’s agriculture ministry shows that per capita availability of eggs in India is lower than the global average. In fact, the National Nutrition Institute has estimated that “the availability of eggs is around 63/person/year while it should be about 180.” India's production stood at 78.48 billion eggs in the 2014-15 marketing season, which implies that the country would need to triple its efforts to reach an optimal supply. During World Egg Day last week, the central government pledged greater support for the country’s poultry industry. We will keep an eye on this potential market development, as this level of production expansion would require investment in additional breeding stocks, more animal feed supplies, and expanded cold storage capacity.

Swine Disease Surfaces in Moldova:


After initially entering Europe in 2007 via the country of Georgia, African Swine Fever has been discovered in livestock across a growing number of Eastern European countries, including Russia, Belarus, and Poland. This past week, veterinary authorities in Moldova confirmed two cases of the disease on farms in the district of Donduseni, which is only 20 kilometers from the border with Ukraine. While these isolated outbreaks of African Swine Fever are not expected to materially impact Europe’s hog production, the situation still bears monitoring in the coming weeks. A few further outbreaks could worsen our sanguine outlook significantly.

Seasonal Flooding in the Mekong Delta Lags Expectations:


In light of recent drought conditions in Vietnam, rice growers are closely watching seasonal flooding in the Mekong Delta. The development of winter-spring rice in the region requires an adequate level of nutrient-rich floodwater. According to the country’s Department of Agriculture and Rural Development, flooding stands at the country’s Level 1 Alert—below the desired Level 2 or 3 reading. Võ Thành Ngoan, Deputy Director of Đồng Tháp Province’s Department of Agriculture and Rural Development reports that “water levels have been higher than last year, but lower than the average of past years.” In other Vietnamese agricultural news, the Ministry of Agriculture and Rural Development (MARD) has halted raw Ghanaian cotton shipments after discovering the Trogoderma Granarium Everts beetle in large volumes of the imported fiber.

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