"“We have lent a huge amount of money to the U.S. Of course we are concerned about the safety of our assets. To be honest, I am definitely a little worried.” "

Chinese premier Wen Jiabao 12th March 2009

""We have a financial system that is run by private shareholders, managed by private institutions, and we'd like to do our best to preserve that system."

Timothy Geithner US Secretary of the Treasury, previously President of the Federal Reserve Bank of New York.1/3/2009

Monday, August 11, 2008

EU food production forecasts show big growth (Ho Ho Ho) ,no EU tariffs, so lower retail prices in store (Ho Ho Ho)

The European Commission published on August 7th the annual crop yield forecast, which is based on an updated analysis by the Commission's in-house scientific service, the Joint Research Centre (JRC), using an advanced (and very slick) crop yield forecasting system.

The MARS (Monitoring Agriculture with Remote Sensing) Crop Yield Forecasting System includes use of meteorological databases, low resolution satellite technology, and the use of historical statistics to produce forecasts. See Thursday, April 20, 2006 Hi Tech sky spy to verify EU farm subsidy - Lo tech computer system should pay, won't pay.

The latest forecast , produced on August 7th is available here
and makes welcome reading as retail food prices soar.They are based on data up to July 31st 2008.

Favourable weather conditions and an increase in the planted area farmed should lead to a total cereals harvest close to 301 M tonnes for this year in the European Union, 43 M tonnes or a 16& increase on 2007 and a growth of 9% on the past five years' average production.

2008, the latest yield forecasts show the following trends:
- soft wheat: 5.6 t/ha (+4.8%)
- durum wheat: 3.1 t/ha (+12.8%)
- barley: 4.4 t/ha (+5.7%)
- grain maize: 6.9 t/ha (+9.5%)
- rape seed: 2.9 t/ha (-2,1%)
- sunflower: 1.6 t/ha (+1.7%)
- potato: 26.5 t/ha (-1.1%)
- sugar beet: 70.3 t/ha (+19.0%)

The greatest increase is for sugar beet, (The UK started producing ethanol from sugar beet last year) cultivated mainly in northern Europe, with the main producers Germany and France, which benefited from favourable weather. see Friday, November 23, 2007 ABF / British Sugar's Wissington sugar beet / bioethanol plant on stream and opened by Lord Rooker

Maize yield is expected to be 20.1% higher than last year and 9.5% higher than the past five years' average, with very high yield increases for Romania (+122%), Bulgaria (+193%) and Hungary (+94%), countries that had been suffering from drought last year.

The winter of 2007/2008 was rather mild, especially in Central and Eastern Europe, but cooler than the exceptionally mild winter of 2006/07. Temperatures followed a seasonal course with warmer average temperatures compared to the long term average (period 1975–2007) for Central and Eastern Europe. June and July have been slightly cooler for France, Northern Spain and the United Kingdom.

Rainfall throughout the season has been abundant and well distributed for Spain but has led to over-wet situations in France and northern Italy.

As zloty strengthens , Poland calls for food tariffs to be re-imposed

To ensure supplies the EU suspended tariffs for the 2007/08 marketing year and now Poland has asked the EU to reimpose import tariffs on cereals to limit inflows of cheap supplies ahead of their expected bumper harvest this year, the Polish agriculture minister Marek Sawicki 50, told Reuters on Friday. He has been the Minister since since November 16, 2007.

Latest data provided by The Polish Agriculture Ministry shows the average price for a tonne of milling wheat dropped in Poland by almost 5 % month-on-month in July to 762 zlotys (Euros 236). See graph for zloty exchange rate for last 12 months.

"At the moment, because of the overvalued zloty, for many companies owning large storage areas it pays off to import grains, whether from Hungary or from Ukraine," he added.

In June 2008, the tariffs were suspended for another season to ensure sufficient supplies in an attempt to slow rising retail food prices.

In a related area Poland's previous conservative-nationalist administration and Brussels had been in a legal dispute over GMO in animal fodder for months. The Commission filed a lawsuit against Poland in the European Tribunal of Justice for passing a law banning GMO seeds and animal fodders. Poland responded with a counter-suit.

In January, Poland's newly-installed liberal government had said it planned to change the incoming law in order to stay in line with European Union rules. Under the rules of the 27-nation EU, a member state has the right to apply a "safeguard clause" against GMO products if it can provide scientific evidence to question their safety.

Despite the planned fodder rules, Poland is to continue allowing the import of genetically modified food for human consumption, provided it is clearly labelled as containing GMOs and cannot be transformed into other products, ie ; used as an ingedient.

UPDATE : Bloomberg - Euro Slumps to Five-Month Low on Reduced Bets for Higher Rates

The euro slumped to a 5 month low against the dollar. Traders pared bets the European Central Bank will raise interest rates as the economy slows.

The euro also fell to a 3 week low versus against the yen after ECB President Jean-Claude Trichet said economic growth will be ``particularly weak'' through Q3 and policy makers kept the benchmark rate unchanged last week. more

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