Duxton’s Agri Bits and Pieces Vol. 296

QUOTE OF THE WEEK

This week’s quote comes from the article ‘Drought history affects grassland plant and microbial carbon turnover during and after a subsequent drought event’ and highlights the impact drought has on the balance of ecosystems.

“Plants have developed complex morphological, physiological and biochemical adaptions to reduce and adjust to water stress and its consequences for plant fitness. Extreme droughts have been found lead to reductions in plant growth and CO2 uptake, thereby decreasing the carbon sink potential of ecosystems. Moreover, drought periods can severely alter the quantity and quality of carbon inputs to the soil.”


TABLE GRAPES IN PRICE SPIKE AS EXPORTS TAKE OFF

Table grape export prices have spiked this year with exports exceeding 100,000 tonnes for the first time.

According to the Australian Table Grape Association the 2015-16 table grape export season saw 108,594 tonnes exported and April recorded the highest single volume of Australian table grapes exported for any month at 32,587 tonnes. Exports to Japan increased by 406 per cent on the previous year, making it…

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Vietnam Update – June 2016

ECONOMIC UPDATE

Agriculture and mining production sectors experienced a slowdown during the first half of 2016.

Vietnam’s GDP rose 5.55% YoY in the second quarter of 2016, bringing GDP growth for the first half of this year (H1-2016) to 5.52% YoY, lower than the growth of 6.32% YoY during the same period last year1.The decline in these two sectors was due to the impact of a cold spell in the North, drought and salinity in Mekong Delta and the contraction in mining output.

Activities in the manufacturing sector remain strong. Nikkei’s Purchasing Manager Index (PMI) reached 52.6 in June from 52.7 in May, fueled by the expansion of new orders, though at a slower pace than seen in the last month. Meanwhile, the Industrial Production Index posted at 7.5% YoY increase in June, lower than the growth of 9.6% YoY during the same period last year due to weakness in the mineral sector which has been declining for six consecutive months3.

On the consumption front, June’s retail sales growth stood at 9.5% YoY in nominal terms and 7.5% YoY in real terms.3 The Consumer…

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Duxton’s Agri Bits and Pieces Vol. 295

SPECIAL REPORT: THE FUTURE OF MILK PRICES

This week’s Agri Bits ‘n’ Pieces is a special report focusing on the future direction of global milk prices from Duxton’s perspective. The article is written by Duxton’s CIO, Desmond Sheehy.

I have been asked a lot recently about the global milk price and where I see it going. No one can truly predict the future price of a globally traded commodity (and if one could you would probably not write about it) so I am not going to try. Making predictions even more difficult is the nature of the global dairy market – it is fragmented, data starved and political.  I would, however, like to highlight some recent events and longer term trends and add some comments as to where I believe dairy prices may move.

Firstly I would like to make a few high level comments:

  • Dairy demand is relatively fixed in the short term. There will be medium to long-term growth as demand is impacted by such factors as dietary changes but demand for the next three years is relatively fixed.
  • The global milk price is a function of…

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