Duxton’s Agri Bits and Pieces Vol. 179

QUOTE OF THE WEEK

South Asia, home to a quarter of the world’s population, will probably get less monsoon rainfall than normal this year as odds increase for the emergence of the El Nino weather phenomenon that has previously caused droughts.

Farmlands in India, Pakistan, Bangladesh, Sri Lanka, Nepal, the Maldives, Myanmar and Afghanistan will most probably get “below-normal to normal rainfall” amid consensus among experts about the possibility of the El Nino during the June-September monsoon season, the South Asian Climate Outlook Forum said in a statement in Pune, India yesterday. It said that, “rain is seen below normal in western, central and south western parts of South Asia”.

The season is crucial for crops from sugar to rice and cotton as more than 50 percent of the region’s farmland is rain- fed, making monsoons the main source of irrigation for India’s 235 million farmers. Less-than-normal precipitation can curb farm output, lower rural incomes and hamper a rebound in the country’s economic growth from near the lowest in a decade, while spurring inflation.

“The monsoon this year is very critical to India both from the perspective of…

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Duxton’s Agri Bits and Pieces Vol. 178

QUOTE OF THE WEEK

“It’s a pretty straightforward play. Australia’s got a green, clean image. For the Asian market, specifically China, that image is a valuable part of the Australian brand,” said Michael Boddington, managing director of Asian Agribusiness Consulting in Beijing.

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AUSTRALIAN DAIRY: THE MILK IS GETTING THIN

Anyone looking to strike a deal in Australia’s red-hot dairy sector may have to look harder for targets, after a string of acquisitions fueled by Asia’s increasing thirst for milk and other products has left few targets on the block.

The latest major deal was Italian dairy giant Parmalat SpA’s purchase of Western Australia-based dairy and fruit-juice company Harvey Fresh Ltd. for US$110 million, announced this month. That followed the completion of Canada’s Saputo Inc.’s acquisition of a majority stake in ASX listed Warrnambool Cheese & Butter Factory Co. in January, valuing the company at about A$538 million. Saputo edged out Australia’s Murray Goulburn Co-Operative Co. and Bega Cheese Ltd. in a four-month bidding war that highlights the intense interest in the sector.

Nine deals were announced in the dairy sector in…

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Vietnam Update – April , 2014

ECONOMIC UPDATE

Economic indicators pointed out some positive signs in the first quarter of 2014, indicating that Vietnam’s continued economic recovery.

Vietnam recorded GDP growth rate of 4.96% in the first quarter of 2014, up from 4.75% and 4.76% of the same quarters in 2012 and 2013 respectively1 . The Service sector posted the strongest increase of 5.95% YoY, while the Industry and Construction sector also exhibited signs of growth at 4.69% YoY1.

HSBC released the Purchasing Manager Index of 51.3 in March, up slightly from 51.0 in February, driven by the acceleration of both output and new orders. At the same time, the General Statistics Office of Vietnam also reported an increase of 5.2% YoY in Industrial Production Index for the first quarter of this year, higher than 4.9% YoY growth of the same period last year.

The Consumer Price Index edged down 0.44% MoM in March, mainly driven by the decline in prices of food and food services, as well as housing and construction materials1. The YoY inflation level, therefore, hit the five year low at…

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