India / Middle East - Food processing companies such as Mrs Bector's Food Specialities and CG Corp Global are getting ready to combat a possible shortage of wheat due to the combined effects of hoarding by farmers and traders, and restricted exports from Russia and Ukraine. “Our vendors are finding it difficult to source wheat and the situation is expected to worsen".
- U.S. planting remains behind schedule on account of wet weather.
- Pakistan faces wheat crisis due to most of the imports being sourced from the Black Sea region.
- Investment Funds and speculators pile in money on US COMEX net long wheat futures contracts. Fundamentals set for a wheat futures bull run and huge profits for investors as crisis worsens. Wheat futures presently trading @ $10.64 USD per bushel.

Update to last week's post on Union Pacific Railroad (UP) saying they’d be reducing 20% of rail space to 30 large-scale customers–including fertilizer shippers. US congressman Austin Scott, R-Ga. warns about lower production inside the US, resulting in less food exports. He called for Congress to have a hearing to question railroad companies over the supply chain issues.
UP is trying to deal with their bottlenecks and rail service delays across their network by scaling back what they will serve for some of their largest customers.” Some say says this is an example of monopoly power to cut existing contracts without regard and an example of the railroad doing “just whatever they want.” UP plans to hire more staff and add locomotives to network.

Update to recent fires at farms and food processing facilities.
- This morning in the UK. A large fire at a sausage factory is being tackled by 70 firefighters from across Essex and Hertfordshire. (Video)

- This comes after yesterdays fire of a chicken farm in Asten, Netherlands. Initial reports say 43,000 chickens died.

- Questions are being raised after last Thursday's plane crash into a General Mills plant in Georgia US and over a week ago, a plane crashed into Idaho potato and food processing plant.

Western media reports EU officials claiming "Russia is using natural gas to blackmail Europe". Lots of headlines with "Russia cuts-off gas to Poland". Explanation here:

👉 Gazprom officially announced that gas supplies to Poland and Bulgaria were stopped due to their refusal to pay for gas in rubles. Gazprom gave them notifications during this month.
👉 Earlier, Poland and Bulgaria stated that they were ready to pay only in euros, and they would not use the scheme proposed by Russia.
👉 Hungary expressed its readiness to pay for gas through an account with Gazprombank with conversion into rubles.
👉 Hungary will receive gas in transit through Bulgaria, so it will not be left without gas.
👉 If transit gas is stolen, then Gazprom promises to reduce the volume of transit by the volume that was stolen. (As in the case when Ukraine through Naftogaz stole 7.8 billion cubic meters of Russian gas in transit)
👉 Today, natural gas contracts in Europe is up almost 10%.
👉 The resumption of supplies to Poland and Bulgaria

US egg prices increased dramatically in April, due in part to the avian flu. USDA also claim backyard chickens are "testing positive" for bird flu. Reports are coming out urging US/Canada citizens to stop using bird feeders & waterers. About 23 million birds, mostly poultry, and turkeys — have been culled in efforts to stem the spread of avian flu over the past two months. China has confirmed the first known human case of the H3N8 strain of avian flu, but health authorities say there is a low risk of widespread transmission among people.

Shortage of EV batteries could soon become a bigger issue than the chip shortage. Automakers could face a critical shortage of EV batteries, as well as the metals required to produce the roughly 1,000 pound lithium-ion batteries. "Put very simply, all the world's cell production combined represents well under 10% of what we will need in 10 years,". "Meaning, 90% to 95% of the supply chain does not exist,".

Tesla's CEO Elon Musk tweeted "If insane lithium prices persist, the company might have to get into the mining and refining directly at scale." This month the chip shortage has forced Mercedes-Benz to shut down two of its assembly plants in Brazil. Neon gas shortages for chip manufacturing continues to be a concern. While some claim that the recent sharp drop in graphic (GPU) chip prices could mean the chip shortage is nearing an end. (Come to your own conclusions 👍).

Corn and soybeans futures contract prices have risen nearly to records. Soybeans have gained 27% so far this year, trading above $17 per bushel for the first time US drought affected crops in 2012. Corn futures are up 37% this year trading around $8 per bushel at 10-year highs.

Drought conditions in Argentina and Canada will play a role in organic grain prices. Argentina accounted for 15% of US imported organic oilseeds and their derivatives and 69% of US organic corn imports in 2020-21. US farmers plan to plant more soybean. Last month, Argentina, the worlds largest soybean meal/oil, suspended soybean meal/oil exports. Two weeks ago, corn futures trading were hitting life-of-contract highs.

The ruble soared to a more than two-year high against the euro in Moscow trade as the Euro fell against the USD. The ruble continues to trade in pre-sanction territory vs the USD after recovering from Feb/Mar crash. The Dollar/Yen jumped to a twenty-year high early Thursday after the Bank of Japan (BOJ) doubled-down on its ultra-low yield policy by offering to buy immeasurable amounts of bonds every session as needed.

US farming update:
- Pittsburgh farmers rush to protect crops ahead of freezing temperatures.
- Northwest Ohio and southeast Michigan farmers face rains, delaying planting.
- Iowa and southern Illinois spring planting season continues to be delayed due to rain.
- Southern Wisconsin and northern Illinois freeze warnings in might delay planting for farmers.
- West Texas farmers struggle to plant in drought conditions.
Picture: Freeze & Drought Maps. Table of 9 grain & oilseed commodities in the U.S. which have tight ending stocks. A bumper crop is needed to raise inventory levels.

- US Fed issued their CBDC report covering public dialogue about issuance of a USD retail CBDC and some potential benefits and risks.
- The Philippines to test wholesale CBDC to strengthen payment system.
- Hong Kong is exploring a retail CBDC, launching a discussion paper on the policy and design.
- ECB issues expression of interest for CBDC prototype user interfaces.

- Iran’s oil exports jumped by 30% from last year to 870,000 barrels per day (bpd) in the first quarter of 2022. Iran sells its crude oil almost exclusively to China and has never stopped those sales since sanctions against Tehran in 2018.
- Production has partially resumed at Libya's largest oil field after a force majeure was imposed on it earlier this month, says the operator of the field, Spain's Repsol.
- Germany is dropping its opposition to a full embargo on Russian oil on the condition that it is given time to find a replacement to the Russian oil supply. Earlier in the month, Germany, Hungary, and Austria, as well as some other EU members, opposed an immediate outright ban on Russian oil.

Germany consumer price index rose 7.4% year-on-year, a new high in over four decades. The harmonized index of consumer prices, rose 7.8% annually. Electricity prices per kWh = $0.34 USD for households. Germany was the biggest buyer of Russian energy during the first two months of the conflict in Ukraine. Around 46% of companies said they want to reduce investments due to rising energy prices. Germany's producer price index rose 30.9% year-on-year. Sirus Report - Imported electricity costs in Germany rose by 440.8% year on year and the price of imported coal rose by 307.5%, gas by 304.3%, petroleum products by 110.3% and oil by 81.3%.

Fire extinguished at Perdue Farms facility in the South Norfolk area of Chesapeake, Virginia USA. A soybean processing tank caught fire just before 9 p.m. Saturday, and it burned for roughly an hour. Once the fire was brought under control, firefighters had to empty the entire processing tank to ensure there was no residual burning. All employees from the area were evacuated. All employees from the area were evacuated. According to a plant manager, the damage from the fire will have minimum impact on their operations.

NZ SeaRise website, launched to track sea levels in New Zealand was hit by a cyberattack on April 30, leading to false reports showing sea levels rising twice as fast as previously thought in some parts of Aotearoa. The first day it went live. Cybersecurity experts said it appeared to be a denial-of-service (DDoS) attack which aimed to overload websites causing them to crash.

India's wheat output looks likely to fall in 2022 after five consecutive years of record harvests, as a sharp, sudden rise in temperatures in mid-March cut crop yields. The drop could curb Indian exports of the staple. Most of India's wheat is consumed domestically. It’s also raising concerns for the domestic market, with millions depending on farming as their main livelihood and food source. Weaker production will lead to a drop in farmers’ income, squeezing margins just as costs of fertilizer and fuel have soared. The government also buys wheat for its food aid program.

US- The cost of diesel hit a new high. The national average for a gallon of diesel now stands at a record $5.37. Prices in Maine and Connecticut passed the $6 per gallon mark. Prices are driven up by a shortage of refining capacity globally; rising demand for jet fuel, which competes with diesel for refining capacity; and higher fuel demand in diesel-reliant Europe. Western sanctions on Russia has amplified the diesel crisis (Infographic 1). The US continues to release 1 million barrels of crude every day from its strategic petroleum reserves.

The US White House and mainstream media blames the war in Ukraine, branding gasoline price increases as “Putin price hikes”. Gasoline prices have been steadily increasing since early 2021 (Infographic 2). Profit margins from products such as gasoline, diesel and jet fuel have now reached the highest since the freak oil collapse of April 2020, confirming that shortages in fuels like gasoline and diesel are greater than in crude oil.

Australian public health expert, warns not to conflate food production with food security. Distribution/resilience and prices are major factors to differentiate. Obesity is an early sign of poor-quality food consumption. Just five multinational companies control the bulk of the world’s food production and distribution. And we’re increasingly reliant on fewer strains of wheat, barley and rice. Not to mention breeds of beef cattle, pigs and chicken. As a result of this efficiency drive, a single disruption or disease could decimate the world’s production.

Policies, corruption and water wastage are underlying factors affecting Pakistan’s battle with food shortages.

97% of Afghans are experiencing food shortages. The Taliban-controlled government has been cut off from the international economy, resulting in a currency crisis & widespread poverty.

Tunisia’s recent emergency importation of grain has stayed off the emptying of shelves, but as the country’s treasury is drained, eventually products begin to disappear from stores again.

Despite Ethiopia’s declared humanitarian cease-fire with Tigrayan rebels, aid groups said they are struggling to get food and medicine to those in need. North of the Amhara region, in Tigray where journalists are banned from entering, there are famine-like conditions.

An investigation is underway to determine what sparked a fire at a food processing plant in northwest Fresno, California, USA. The fire broke out at the Saladino's plant on Sunday night.

The European Union has paid some $50 billion for oil, gas, and coal imports from Russia since late February. Hungary, Slovakia, and Bulgaria have asked for exemptions from the oil embargo discussed by the EU. Few producers that could increase their oil output quickly and the biggest of them, Saudi Arabia and the United Arab Emirates appear unwilling to do it.

The world’s third-largest oil importer, India, is negotiating steep discounts for the Russian oil it is prepared to buy, asking for below $70 per barrel price to compensate for logistics, financing, and sanctions troubles for buying crude.

Vitol Group, the world’s biggest independent oil trader, is shipping the first-ever cargo of Russia’s ESPO crude blend to the United Arab Emirates.

Inflation in Turkey hit a 20-year-high in April as the country continued to battle rising rates. Consumer price inflation soared to 69.97% per year in April, and 7.25% monthly, driven by high global energy prices and the weakening lira. The surge in consumer prices was driven by an annual 105.9% increase in transportation, and an 89.1% jump in food and non-alcoholic drinks prices. The Turkish currency lost 44% of its value against the dollar last year and more than 11% since the start of January, making the cost of imported goods and fuel very expensive.