Prices for cotton powered to a new post-Reconstruction Era high for the second consecutive day.

Deadly floods in major grower Australia have stoked fears that the country’s growers will be unable to meet their contract obligations, pushing prices even higher.

Benchmark cotton futures touched $US1.6789 a pound during intraday trading overnight. This is the highest level for the fibre in more than 140 years. Records from the Mississippi Historical Society show cotton fetched $US1.89lb during the peak of the US Civil War.

Many commercial buyers, such as textile mills, have already struck preliminary agreements to buy a certain volume of cotton at an unspecified price, traders say. It is speculative investors that are behind the recent price rise, as commercial buyers await lower prices to lock in purchases. So far, this strategy is backfiring.

“They’re going to have to buy at some point,” said John Flanagan, president of Flanagan Trading in North Carolina, referring to mills. “Prices just keep going against them. They’re like a deer frozen in the headlights.”

Ever since first breaching Civil War-era levels back in October, prices have defied predictions of a sharp sell-off, underscoring months-old concerns that global cotton supplies will fall behind this year’s demand. Heavy rains cast doubt over harvests in Pakistan and India, which is second in global production.

Prices rose even higher as an Australian growers group met with cotton buyers yesterday to discuss contract flexibility in the increasingly likely case that farmers won’t have enough crop to fulfil their commitments.

“People are still buying,” said Mr Flanagan. “We’re getting more speculative interest.”

The higher cotton prices are expected to be passed along to consumers. Major clothing companies including VF Corp and Hanesbrands are planning to raise prices this year.

These price-increases may result in a cooling of demand for the fibre if they go high enough, said Sharon Johnson, a senior analyst at Penson Futures.

“The demand is under attack not only from higher raw-cotton prices but, in some instances, the failure of these high prices to be sufficiently passed on through the supply chain,” Ms Johnson said in a note.

source: www.theaustralian.com.au

SHAH JAMAL, Pakistan — Abid Hussein fears the deep floodwaters that destroyed his cotton crop, rotted his wheat seeds and swept away his farming tools are not finished ravaging his life.

Just weeks before the wheat planting season is to start, his 1.5-acre farm still lies under 3 feet of water, and he is certain it will not drain in time.

“I will not be able to plant,” the father of four said in despair.

The floodwaters that already have devastated one crop in the fields are threatening the next season’s crop as well.

If they miss this season, farmers in the flood areas won’t be able to plant wheat for another year and won’t harvest it until May 2012, leaving many Pakistanis dependent on food aid for the foreseeable future.

“It’s a race against time in areas,” said Truls Brekke, a spokesman for the U.N.’s Food and Agriculture Organization.

The flooding that swamped as much as one-fifth of the country destroyed about 8.9 million acres of maize, rice, sugar cane and cotton crops and killed 1.2 million livestock and 6 million poultry, according to preliminary estimates by the U.N. and the government.

It also damaged farming infrastructure — irrigation channels, bore wells, tractors and farm tools — crucial to beginning the planting season on time at the end of the month.

Some fields still are submerged, while in others that appear ready for planting, the water table will be too high. Some farmland has lost its topsoil, which makes planting impossible, though other areas have gained new nutrients from the floodwaters and will be more fertile, Brekke said.

Seed stockpiles have been destroyed, and the U.N. has made an urgent appeal for funds to buy more for farmers.

“The time issue is critical when it comes to agricultural,” Brekke said. “If you miss the sowing by 10 days, you could miss the harvest for a year.”

A missed planting season is unlikely to result in food shortages, because Pakistani farmers have had bumper crops the past two years, and there is plenty of food in storage, said Ibrahim Mughal, head of AgriForum Pakistan, an association of farmers. But a missed season would be devastating for small-scale farmers trying to rebuild their lives.

source:  http://www2.timesdispatch.com/news/2010/sep/06/pakk06-ar-488593/

Flooding in Niger is devastating livestock and destroying crops, lowering expectations for the next harvest in a country where more than half the people do not have enough to eat.

Flash floods are making it harder to feed an already hungry population in Niger with thousands of people driven from their homes and off their fields by high water.

Modibo Traore heads the United Nation’s humanitarian office in Niger.

“The country is facing floods almost everywhere in all regions of the country, including the capital city which is Niamey,” said Traore.  “Up to now we have more than 200,000 people who have been affected by the floods.  All families are staying in the public infrastructure such as schools.  And in the regard to the forthcoming school are resuming activities and this is causing serious concerns for all authorities.”

Rains that began in June are expected to continue for at least another month.

“The rainfall is continuing almost throughout the country and we may expect much more victims of the flood,” he said.

The River Niger has flooded fields of vegetables and rice in some of the country’s most fertile areas.  That is lowering expectations for the next harvest and increasing concerns among relief officials that this humanitarian crisis may last longer than initially thought.

Traore says heavy rains have already killed more than 100,000 cattle in a country dependent on subsistence agriculture.  Dead animals can contaminate drinking water.

“Some areas have started burning dead bodies of animals or burying them.  But we have to acknowledge that in some remote areas, nothing has been done so far because of problem of accessibility to those areas due to the rainy season,” he added.

Traore says relief operations are shifting supplies in response to the flooding.

“We have to divert sometimes some food to address the urgent needs of people affected by floods.  And one of the aspects is the middle term impact in term of the harvest.  A lot of farms and gardens have been destroyed because of the flood and that will have an impact in terms of the upcoming harvest,” said Traore.

Another below-average harvest means less food aid can be bought locally and farmers will continue to be unable to feed themselves.

The U.N. World Food Program hopes to help feed nearly eight-million people during the next five months with enriched feeding programs for almost one million malnourished children under the age of two.

source:  http://www.voanews.com/english/news/africa/Flooding-in-Niger-Threatens-Next-Harvest-102063163.html

MUCH has been said about how BHP Billiton’s bid for Potash Corporation and Canadian fertiliser company Agrium’s play for AWB fit in with the growing issue of food security and food shortages.

These are just new chapters in developments that resulted in China’s Bright Food Group trying to acquire Australia’s CSR sugar this year and Sinochem’s move to buy Australian agrichemicals operator Nufarm. Then there’s Qatar-based Hassad Food, backed by the Qatar Investment Authority, buying up rural land in Australia to feed Qatar and other Middle East countries worried about food security. Hassad has bought more than $40 million worth of sheep stations in northern New South Wales and South Australia in the past six months.

The corporate activity is a storm warning of how food shortages and famine will reshape the world and corporate strategies.

The Economist notes that by 2050 world grain output will have to rise by half and meat production will need to double to meet demand at a time when growth in grain yields is flattening out, there is little extra farmland and renewable water is running short.

Similarly, rising food prices are a poke in the eye that the world needs to remind us of how fragile the food production chain has become. The drought and bushfires in Russia, combined with limits on grain exports, have resulted in a 70 per cent price spike in wheat futures, which has caused prices for soy and barley to go up by 10 per cent.

Global warming is getting the press, but some are now warning that the threat to the human race is a looming food shortage. This seems unimaginable in a world where there has been almost half a century of abundance.

But in his chilling book The Coming Famine, journalist and science writer Julian Cribb warns we are headed towards global food shortages in the next 40 years because of scarcities of water, good land, energy, nutrients, technology, fish and, significantly, stable climates. You can add to that population growth, consumer demand and protectionist trade policies.

“The coming famine is also complex, because it is driven not by one or two, or even half a dozen factors but rather by the confluence of many large and profoundly intractable causes that tend to amplify one another,” Cribb writes. “This means that it cannot be easily remedied by ‘silver bullets’ in the form of technology, subsidies, or single-country policy changes, because of the synergetic character of the things that power it.”

The world is running out of farmland. Advanced farming depends entirely on fossil fuels likely to become scarce, supplies of nutrients for farming have peaked and fresh water resources are finite. With global warming, up to half the planet faces regular drought by the end of the century. Storms and the kinds of floods that have devastated Pakistan are tipped to become more frequent and intense.

Cribb has several solutions; none will come easy. It could start with more free trade and diverting just a tenth of the $US1.5 trillion ($A1.7 trillion) global armaments spending to sustaining global food supplies.

It will be costly, but not as costly as failing to create food and water security. The choice is clear. In the 21st century, we either eat – or we fight.

But as Cribb points out, human beings are remarkable. In the 20th century, they developed weapons that could destroy the world but developed systems and agreements not to do it. They damaged the climate but there are strategies, which may or may not be successful, to tackle global warming. The looming food crisis calls for us to better manage water, land, nutrients and other inputs. Green cities that grow food will need to be established and the real costs of food to the environment and society might be passed on consumers.

If Cribb’s warnings are correct, the prospect of famine, the third horseman of the Apocalypse, will be the biggest trial of our common humanity. BHP and AWB are footnotes to a much bigger story of how it will reshape business and society.

source:  http://s-data.current.com/16g2n4c

The flooding of Pakistan, affecting 20 million people, is linked to climate change and a sign of more calamities to come.

FOR those who still doubt that climate change is a real problem, the plight of Pakistan today should serve as a lesson. The floods there have been simply devastating.

Up to 20 million people have been affected, 900,000 homes destroyed or damaged, and 4.6 million people are homeless in just two provinces. Some 6.5 million people are in need of water, food and medicines. In Khyber Pakhtunkhwa province, 70% of bridges and roads have been destroyed.

The agricultural sector has been most hit, with over 17 million acres of farmland flooded, more than 200,000 livestock killed, and most of the cotton and wheat crops have been lost.

The Pakistan flood is one of the worst natural calamities in modern history. The scale of the disaster in terms of people affected, loss of property and geographical area is said to be worse than the effects of the Asian tsunami and the Haiti earthquake combined, although at 1,600, the number of persons killed is lower.

The chief UN humanitarian affairs official John Holmes said it was a disaster “which has affected many more people than I have ever seen”. Last week at the United Nations in New York, Pakistan’s Foreign Mini­ster Makhdoom Shah Mahmood Qureshi described the floods as “a natural calamity of unprecedented proportions”.

The floods are now attributed to climate change. It is often not easy to attribute a weather-related event to the climate change phenomenon, and there is a debate whether disasters such as the tsunami, the typhoons that struck the Philippines last year or the Hurricane Katrina that devastated New Orleans are linked to climate change.

The Pakistan floods are partly blamed on such domestic factors as the chopping of forests and mismanagement of land and rivers. However, the Pakistan government has mainly attributed the catastrophe to climate change.

Its Foreign Minister stressed that climate change has become a reality for the 170 million Pakistanis and the present situation confirms Pakistan’s “always extreme vulnerability” to the adverse impacts of climate change.

The point on vulnerability is important because there is a recent tendency in the climate negotiations to consider only certain categories of countries (the least developed countries and the small island developing states) as being especially vulnerable to climate change.

Other countries including Pakistan, Nicaragua and other Central Ameri­can countries (which have been affected by hurricanes), have staked claims that they too are extremely vulnerable and have questioned the criteria by which countries are to be termed “vulnerable”.

A senior scientist at the Geneva-based World Meteorological Organisation, which is the UN’s premier scientific body dealing with climate issues, has clearly linked the Pakistan floods to climate change.

According to Nathanial Gronewold of ClimateWire, in an article published in New York Times, scientists at the WMO say there is no doubt that higher Atlantic Ocean temperatures contributed to the floods.

Atmospheric anomalies that led to the floods are also directly related to the same weather phenomena that caused the record heat wave in Russia and flooding and mudslides in western China, said Ghassem Asrar, director of the WMO’s World Climate Research Programme.

He added that Pakistan’s misery is just a sign of more to come.

“There’s no doubt that clearly the climate change is contributing, a major contributing factor,” Asrar said in an interview with Gronewold.

“We cannot definitely use one case to kind of establish precedents, but there are a few facts that point towards climate change as having to do with this.”

The record high surface temperatures in the Atlantic Ocean resulted in a huge volume of evaporated moisture entering the atmosphere and drift over the affected area.

At the same time, an abnormal airflow pattern prevented the saturated clouds from spreading over a larger area, concentrating the rains in Pakistan’s watershed, according to Gronewold’s article.

It quotes Asrar as saying that the higher-than-average Atlantic temperatures and conditions made ripe by the La Niña cycle of lower temperatures in the central Pacific Ocean created the perfect conditions for the rains.

The disaster was made worse by deforestation and land-use changes in the affected areas, but Asrar insisted that the sheer volume of precipitation absorbed by clouds and then dumped on Pakistan is chiefly to blame.

The flooding started in late July and accelerated over August, affecting almost all of the north and most of the central region. At the most intense period, about a foot of rain fell over a 36-hour period, and some areas received 180% of the precipitation expected in a normal monsoon cycle.

The water level of the Indus River also reached its highest level in 110 years since records were kept.

According to Gronewold, climate scientists say this year’s summer is one of the hottest ever, with high temperatures breaking records across the United States, Europe and Central Asia.

“Consequently, the surface of the Atlantic has also been much warmer than usual. The IPCC assessment reports note that higher ocean temperatures lead to more water vapour entering the atmosphere. This already pointed toward a stronger than usual monsoon season in store for South Asia.

“Normal air patterns would have dispersed this precipitation over as wide an area as possible. But an abnormal airflow caused by La Niña created a ridge of pressure that blocked the warm, saturated air from moving west to east normally.

“This same ridge prevented the rains from reaching western Russia, where a severe drought has been blamed for the raging wildfires and the destruction of 20% of the wheat crop there. And with nowhere else to go, Pakistan and China’s far west bore the brunt when the clouds became too saturated with moisture and opened up,” Arar said.

International aid is being mobilised for Pakistan, with almost US$500mil (RM1.55bil) raised so far following a UN appeal. But the estimates of of what is needed are far higher.

Pakistan’s Foreign Minister has said US$2bil (RM6.2bil) is required for agriculture alone, and the economist A.B. Shahid estimates that US$3bil (RM9.3bil) is needed just to rebuild homes and US$7bil (RM21.7bil) to restore infrastructure such as roads, bridges, canals, and government offices.

At present there is no international system for financing countries affected by climate change or extreme weather events, and countries like Pakistan have to rely on donations.

The Pakistan flood tragedy should spur policy makers and politicians to take the climate crisis more seriously and to quickly come up with a financing system to assist countries affected by climate change.

source:  http://thestar.com.my/columnists/story.asp?file=/2010/8/23/columnists/globaltrends/6902812&sec=globaltrends

Persistent drought, cold weather and flooding, all attributed to climate change, are threatening Bolivia with a food crisis, the United Nations Food and Agriculture Organization (FAO) and experts have recently warned.

FAO coordinator Einstein Tejada said one fifth of Bolivia’s territory now suffer from the effects of climate change, causing food prices to rise.

The most vulnerable zone is the Andean area, hit by a long-running drought, he added.

According to the government, more than 16,000 head of cattle and over 24,000 hectares of wheat, bean, corn and other crops have been affected by the drought.

“Bolivia is affected by all the climate phenomenon in the world” except the hurricanes, he said.

Despite the government’s efforts to lessen these effects on agriculture and livestock, the impact on food security will be felt, as well as imbalances in the ecosystems, he said.

“We cannot deny the strong impact climate change has on the production systems,” he added.

Meanwhile, the Central Bank of Bolivia (BCB) said the drought and cold weather would fuel inflation due to the negative impact on food production.

The drought is a possible risk for the impact on food production, BCB President Gabriel Loza told Xinhua on Saturday.

Economic analyst Luis Ballivian said growth in the agriculture-livestock sector dropped 0.5 percent in the first half of 2010 due to the drought and cold weather, causing higher food prices.

“The projections for the last six months of 2010 say that the inflation gradually will stabilize around the long term goal of 4 percent. However, by the end of the year this could increase to some 6 percent, due to the increase in food prices,” Ballivian said.

In the provinces of Santa Cruz, Chuquisaca, Tarija, Cochabamba, Oruro and La Paz, food prices are threatening to soar in coming weeks.

source:  http://english.cri.cn/6966/2010/08/23/2021s590140.htm

The Indonesian Sugar and Flour Traders Association (Apegti) predicts that the country’s flour price may rise 20 percent starting from October due to increased world wheat prices stemming from decreased global production.

The price of wheat in several stock exchanges rose after the government of Russia announced that the country would temporarily halt wheat exports from Aug. 15 to Dec. 31 due to the severe drought that hit the country recently.

The UN’s Food and Agriculture Organization (FAO) estimates that Russia’s 2010 wheat production may drop 20 million metric tons to 42 million or 43 million metric tons.

Two weeks ago, the price of a bushel of wheat at the Chicago Commodities Exchange rose US$5 to $7.50.

Apegti chairman Natsir Masyur said Saturday that the local price of flour would be hugely influenced by world wheat prices because the entire supply of wheat to the country was imported.

“Given our wheat stock, no price increase is expected until September, but after that, we may see a 20 percent increase in prices,” he told The Jakarta Post via telephone over the weekend.

He said that currently, Indonesia imported 4 million tons of wheat and 500,000 tons of wheat flour per year from other countries. Australia is the largest supplier of wheat to Indonesia, representing 75 percent or about 3 million tons of the total wheat import.

Although rice remains the major staple food in Indonesia, wheat flour is also widely used for making bread and especially instant noodles, which feature heavily in local cuisine.

Indonesian Flour Mills Association (Aptindo) chairman Fransiscus Welirang said the domestic flour industry was highly dependent on international market conditions and a domestic price increase was unavoidable.

“We follow the market, so domestic flour producers can’t determine the price on their own, ” he told the Post.

He said that if domestic flour producers increased prices, it could affect the purchasing power of people to buy flour and flour-based products.

However, Fransiscus said, increased prices of wheat and flour would not bring any serious impact as many alternatives were available in the country.

Fransiscus, who is also a director of PT Indofood Sukses Makmur, the world’s largest producer of instant noodles, said that his company had enough stock for the next three months, but could not ensure that prices would remain stable.

He added that the impact on Indonesia of the decline in Russian wheat production was not as bad as when Australia’s wheat production fell in 2008. He said that Russian wheat represented only 1.5 percent of the total wheat import.

Apart from Russia, the Canadian government also predicts that its wheat production may fall 15 percent to 22.7 million metric tons this year from 26.5 million metric tons last year. The major causes of the decline in Canada wheat production were flooding in Saskatchewan and Manitoba that curbed seeding and crop development.

The FAO revised its prediction on the world’s total wheat production from 676 million to 651 million metric tons, but said that the current wheat crisis had small possibility of turning into a severe food crisis. (rdf)

source:  http://www.thejakartapost.com/news/2010/08/23/flour-price-may-soar-20-october-due-low-harvest.html