Offshore wind energy could play a key role in renewable energy in the UK - that's according to a panel of top energy sector experts.
Currently only 3% of energy consumed comes from renewables, but the government has a target of 15% by 2020.
Although the UK does not currently have an energy crisis, one of the experts, Ben Goldsmith, co-founder of clean technology investment firm WHEB Partners, said the government must "plan very rapidly to avoid one."
The panel also said skills shortages and lack of investment threaten to stop the sector in its tracks.
The experts say there needs to be a connection with schools and schoolchildren - the promoting of technology and science subjects will, in turn, lead to secure, long-term, well-paid jobs.
David Spencer-Percival, managing director of energy recruiters Spencer Ogden, said: "Anywhere between 80,000 to 100,000 jobs will be created by offshore wind alone - that’s before you even consider massive construction projects for nuclear energy."
So that’s our kids’ futures sorted. And, until they graduate, and the Renewable Heat Incentive (RHI) is in place, we can do our own energy saving work by making sure we use energy wisely around the home.
Source: Big Green Smile
DGC Asset Management Limited provide Investors with the opportunity to engage in strategic mid term and long term asset-backed investments within the Agricultural, Timber and Renewable Energy sectors.
Thursday, 2 June 2011
BlackRock sees 'pivotal moment' in renewable energy investment
Recent events in Japan and the Middle East could create a pivotal moment for alternative energy, BlackRock's Robin Batchelor and Poppy Allonby have claimed
The pair, who run the group's New Energy investment trust, said there is a real and significant opportunity for renewable energy and energy efficiency to help offset any slowdown or reversal in nuclear power's renaissance.
"Recent events, both in Japan and the Middle East North Africa (Mena) region, have put energy policy and energy security back on the political agenda," they said in a joint market update.
"There now appears scope for renewed regulatory momentum in the sector and the trust is poised to benefit from this new reality with over 75 per cent of its investments exposed to energy efficiency and renewables."
With the sector out of favour for so long, they highlight many holdings trading on historically low earnings multiples, a fact emphasised by a recent spate of M&A.
EDF recently bid for EDF Energies Nouvelles for example, a subsidiary principally engaged in the development of renewable energy.
Meanwhile, Iberdrola Renovables, a top 10 holding for the trust, was also subject to a bid by its parent company Iberdrola in March.
A pick up in sector M&A underpins share prices and highlights the attractiveness of company valuations, according to the managers.
Mr Batchelor said the impact of the recent Japanese disaster has contributed to uncertainty over the future of nuclear power globally.
"Many countries that were about to commence their second phase of building nuclear power generators have now expressed concern over the safety of plants and stalled these plans," he added.
"This has most recently occurred in Italy, where they have decided to place their nuclear program on hold."
Several of the trust's holdings announced results in April, with Novozymes a key performer as it demonstrated strong growth of around 9 per cent (on a like-for-like basis).
Mr Batchelor said a key headwind in the short term has been the relative weakening of sterling, as the dollar strengthened 3.9 per cent over April.
"As the market began to stabilise following the Japanese earthquake, a number of oversold stocks in the nuclear and platinum markets regained much of their lost ground," he added.
Strong recoveries also came from companies such as Johnson Matthey, Umicore and Shaw Group, which all contributed well to performance.
"Growing concerns over the sustainability of the Chinese wind market led us to take profits in American Superconductor," said the managers.
"A recent trip to China also resulted in [a new] a position in a Chinese wind farm developer, which stands to benefit from the pricing pressures currently being seen in the market."
Source: FTAdvisor.com
The pair, who run the group's New Energy investment trust, said there is a real and significant opportunity for renewable energy and energy efficiency to help offset any slowdown or reversal in nuclear power's renaissance.
"Recent events, both in Japan and the Middle East North Africa (Mena) region, have put energy policy and energy security back on the political agenda," they said in a joint market update.
"There now appears scope for renewed regulatory momentum in the sector and the trust is poised to benefit from this new reality with over 75 per cent of its investments exposed to energy efficiency and renewables."
With the sector out of favour for so long, they highlight many holdings trading on historically low earnings multiples, a fact emphasised by a recent spate of M&A.
EDF recently bid for EDF Energies Nouvelles for example, a subsidiary principally engaged in the development of renewable energy.
Meanwhile, Iberdrola Renovables, a top 10 holding for the trust, was also subject to a bid by its parent company Iberdrola in March.
A pick up in sector M&A underpins share prices and highlights the attractiveness of company valuations, according to the managers.
Mr Batchelor said the impact of the recent Japanese disaster has contributed to uncertainty over the future of nuclear power globally.
"Many countries that were about to commence their second phase of building nuclear power generators have now expressed concern over the safety of plants and stalled these plans," he added.
"This has most recently occurred in Italy, where they have decided to place their nuclear program on hold."
Several of the trust's holdings announced results in April, with Novozymes a key performer as it demonstrated strong growth of around 9 per cent (on a like-for-like basis).
Mr Batchelor said a key headwind in the short term has been the relative weakening of sterling, as the dollar strengthened 3.9 per cent over April.
"As the market began to stabilise following the Japanese earthquake, a number of oversold stocks in the nuclear and platinum markets regained much of their lost ground," he added.
Strong recoveries also came from companies such as Johnson Matthey, Umicore and Shaw Group, which all contributed well to performance.
"Growing concerns over the sustainability of the Chinese wind market led us to take profits in American Superconductor," said the managers.
"A recent trip to China also resulted in [a new] a position in a Chinese wind farm developer, which stands to benefit from the pricing pressures currently being seen in the market."
Source: FTAdvisor.com
Agricultural investment - Gaining exposure to flying food prices
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Exchange-traded funds (ETFs) commodity markets experienced a sharp pull-back during the early part of May, in what was the most feverish bout of profit-taking for well over a year. Although the direction of silver and oil prices hogged the headlines, there was also evidence of a sell-off in agricultural investment vehicles when markets became convinced that prices for a range of staples had topped during March.
The scramble to gain exposure to agricultural markets prior to March can be gauged by inflows into US agricultural ETFs, which reached $984m (£600m) during February - a fivefold increase over the last months of 2010.
Now, with Northern Europe experiencing its worst drought conditions since 1976, the CRB Grains & Oilseed index is again challenging its March highs, and is only 9 per cent down on the index high of 2008. Although Russian produce has re-entered global grains markets, much will depend on US summer yields, and the extent to which China's predicted shortfall swallows up surplus production.
Download your FREE Agricultural Investment and Farmland Investment Guide here
Source: investorschronicle.co.uk
Exchange-traded funds (ETFs) commodity markets experienced a sharp pull-back during the early part of May, in what was the most feverish bout of profit-taking for well over a year. Although the direction of silver and oil prices hogged the headlines, there was also evidence of a sell-off in agricultural investment vehicles when markets became convinced that prices for a range of staples had topped during March.
The scramble to gain exposure to agricultural markets prior to March can be gauged by inflows into US agricultural ETFs, which reached $984m (£600m) during February - a fivefold increase over the last months of 2010.
Now, with Northern Europe experiencing its worst drought conditions since 1976, the CRB Grains & Oilseed index is again challenging its March highs, and is only 9 per cent down on the index high of 2008. Although Russian produce has re-entered global grains markets, much will depend on US summer yields, and the extent to which China's predicted shortfall swallows up surplus production.
Download your FREE Agricultural Investment and Farmland Investment Guide here
Source: investorschronicle.co.uk
The misperceptions of forestry investments
Download your FREE guide to Forestry Investments and Timber Investments here
In addition, these returns have a low correlation with those of other financial assets, making it an effective portfolio diversifier, and its inflation-hedging attributes also provide capital preservation benefits.
Nevertheless, investors are still learning about the asset class and some of their most common misperceptions are discussed below.
Perception: Forestry has matured as an asset class and few opportunities exist for new investors, particularly in the United States
Reality: Approximately 15 per cent of the world's investment-grade forests are managed as institutional investments. On a market capitalisation basis, almost 75 per cent of the world's investable timberland (an estimated $212bn (£130.96bn) out of a total of $290bn) is in the US, which has the deepest, most diverse and most fragmented land and timber markets in the world.
By comparison, Brazil, Chile, Australia and New Zealand combined represent less than $60bn of the world total. Of the 64m hectares of forest available for ownership in the US, only 20 per cent are currently owned by institutional investors. In short, opportunities still exist in the US market and any timberland investment program is likely to be strengthened by a US allocation.
This is also true for those concerned about FIRPTA (Foreign Investment Real Property Tax Act of 1980) because, even allowing for the tax’s impact, the US market still provides most investors with attractive risk-adjusted returns.
Perception: Forestry investment is not environmentally responsible
Reality: Forests are biological assets that must be actively and sustainably managed to ensure that their investment potential is optimised. In the case of natural mixed-species forests, which are often found in colder climates, this often entails promoting natural regeneration and employing harvesting techniques that protect soils and promote residual tree growth.
In the case of plantation forests, which are normally found in warmer climates, the use of intensive forestry practices, planting single tree species as crops and cultivating them on shorter growth cycles, is the norm. Regardless of the circumstances, forests are renewable assets and one of the few green investments that actually reward investors for practicing responsible stewardship.
Perception: Global diversification is the key to reducing risk
Reality: Geographic diversification is important, but achieving it does not require owning timberland around the world. Portfolio risk can be reduced by 21 per cent by owning forests in five different countries. However, the same results can be achieved by investing in just five of the 21 sub-regions of the US South, which has the world’s largest investable land base with 35.2m hectares. Furthermore, such a portfolio is less expensive to manage and poses fewer political, regulatory, tax and currency challenges.
Perception: Forestry is less liquid than other alternative assets
Reality: Forests are no less liquid than many other types of alternative investments and the asset class continues to experience significant capital inflows. In addition, the capacity to generate ongoing income from the sale of timber and non-timber products reduces the holding risks associated with a forest investment, a feature that also comes with unique optionality.
A forest is both a factory and a warehouse. It produces increasing amounts of higher-valued timber through time because of biological growth (larger trees are more valuable than smaller trees because they can be used to produce more and higher-valued products) and it stores that value on the stump, providing investors with the ability to time the monetisation of cash flows. This means even when timber markets are challenging, a timberland investment can increase in value. By comparison, when a traditional commercial real estate asset loses lease income due to vacancy, that income can never be recovered.
Perception: Forestry investments with higher biological growth rates produce higher returns
Reality: There is no direct relationship between higher growth rates and higher returns. Under a common discount rate, prices for timberland assets adjust to account for higher or lower levels of biological productivity.
Perception: Forestry’s capacity to serve as an inflation hedge is speculative
Reality: Like agricultural commodities, precious metals and oil and gas, forestry is a real asset and real assets are proven inflation hedges. Wood-based products permeate every sector of the global economy and according to recent analyses comparing the US consumer price index against timberland returns (as measured by the NCREIF Timberland index) there is a strong association between the two over periods of five years or longer.
Perception: Natural risks like weather, fire and insects are the greatest threats to performance
Reality: Estimates vary, but in an average year, institutionally-managed US forestry sustains financial losses of less than 0.03 per cent due to such natural events. Fire danger is reduced by maintaining fire breaks and access roads, while disease and insect infestations are managed by monitoring forest health and by promptly harvesting affected trees. Finally, while catastrophic events like hurricanes and tornadoes are impossible to avoid, these risks are mitigated by diversifying holdings over broad geographic areas and by developing salvage harvest plans that can be implemented quickly in response to such events.
Perception: Timber Reits and exchange traded funds offer greater liquidity and the same benefits as private market options.
Reality: The actual liquidity of such vehicles depends on their size and market capitalisation and whether they are subject to exchange restrictions, all of which impact trading volume. However, when compared to private market options, such vehicles provide far less control over the asset composition of one’s timberland allocation because investors cannot influence investment strategy.
Furthermore, many such vehicles are not "pure-play" timberland investments because they also own manufacturing and distribution assets. Finally, returns for timber Reits and other exchange traded funds are highly correlated with the performance of broader investment markets, which means they do not offer the same portfolio diversification and inflation-hedging benefits of private market options.
Forestry is an expanding and exciting investment sector. Looking ahead, as it assumes a more prominent profile in institutional investment portfolios, investors will acquire a more informed perspective of its risk and return characteristics and there will be far greater understanding of its unique operational and investment attributes.
Download your FREE guide to Forestry Investments and Timber Investments here
Source FTAdvisor.com
In addition, these returns have a low correlation with those of other financial assets, making it an effective portfolio diversifier, and its inflation-hedging attributes also provide capital preservation benefits.
Nevertheless, investors are still learning about the asset class and some of their most common misperceptions are discussed below.
Perception: Forestry has matured as an asset class and few opportunities exist for new investors, particularly in the United States
Reality: Approximately 15 per cent of the world's investment-grade forests are managed as institutional investments. On a market capitalisation basis, almost 75 per cent of the world's investable timberland (an estimated $212bn (£130.96bn) out of a total of $290bn) is in the US, which has the deepest, most diverse and most fragmented land and timber markets in the world.
By comparison, Brazil, Chile, Australia and New Zealand combined represent less than $60bn of the world total. Of the 64m hectares of forest available for ownership in the US, only 20 per cent are currently owned by institutional investors. In short, opportunities still exist in the US market and any timberland investment program is likely to be strengthened by a US allocation.
This is also true for those concerned about FIRPTA (Foreign Investment Real Property Tax Act of 1980) because, even allowing for the tax’s impact, the US market still provides most investors with attractive risk-adjusted returns.
Perception: Forestry investment is not environmentally responsible
Reality: Forests are biological assets that must be actively and sustainably managed to ensure that their investment potential is optimised. In the case of natural mixed-species forests, which are often found in colder climates, this often entails promoting natural regeneration and employing harvesting techniques that protect soils and promote residual tree growth.
In the case of plantation forests, which are normally found in warmer climates, the use of intensive forestry practices, planting single tree species as crops and cultivating them on shorter growth cycles, is the norm. Regardless of the circumstances, forests are renewable assets and one of the few green investments that actually reward investors for practicing responsible stewardship.
Perception: Global diversification is the key to reducing risk
Reality: Geographic diversification is important, but achieving it does not require owning timberland around the world. Portfolio risk can be reduced by 21 per cent by owning forests in five different countries. However, the same results can be achieved by investing in just five of the 21 sub-regions of the US South, which has the world’s largest investable land base with 35.2m hectares. Furthermore, such a portfolio is less expensive to manage and poses fewer political, regulatory, tax and currency challenges.
Perception: Forestry is less liquid than other alternative assets
Reality: Forests are no less liquid than many other types of alternative investments and the asset class continues to experience significant capital inflows. In addition, the capacity to generate ongoing income from the sale of timber and non-timber products reduces the holding risks associated with a forest investment, a feature that also comes with unique optionality.
A forest is both a factory and a warehouse. It produces increasing amounts of higher-valued timber through time because of biological growth (larger trees are more valuable than smaller trees because they can be used to produce more and higher-valued products) and it stores that value on the stump, providing investors with the ability to time the monetisation of cash flows. This means even when timber markets are challenging, a timberland investment can increase in value. By comparison, when a traditional commercial real estate asset loses lease income due to vacancy, that income can never be recovered.
Perception: Forestry investments with higher biological growth rates produce higher returns
Reality: There is no direct relationship between higher growth rates and higher returns. Under a common discount rate, prices for timberland assets adjust to account for higher or lower levels of biological productivity.
Perception: Forestry’s capacity to serve as an inflation hedge is speculative
Reality: Like agricultural commodities, precious metals and oil and gas, forestry is a real asset and real assets are proven inflation hedges. Wood-based products permeate every sector of the global economy and according to recent analyses comparing the US consumer price index against timberland returns (as measured by the NCREIF Timberland index) there is a strong association between the two over periods of five years or longer.
Perception: Natural risks like weather, fire and insects are the greatest threats to performance
Reality: Estimates vary, but in an average year, institutionally-managed US forestry sustains financial losses of less than 0.03 per cent due to such natural events. Fire danger is reduced by maintaining fire breaks and access roads, while disease and insect infestations are managed by monitoring forest health and by promptly harvesting affected trees. Finally, while catastrophic events like hurricanes and tornadoes are impossible to avoid, these risks are mitigated by diversifying holdings over broad geographic areas and by developing salvage harvest plans that can be implemented quickly in response to such events.
Perception: Timber Reits and exchange traded funds offer greater liquidity and the same benefits as private market options.
Reality: The actual liquidity of such vehicles depends on their size and market capitalisation and whether they are subject to exchange restrictions, all of which impact trading volume. However, when compared to private market options, such vehicles provide far less control over the asset composition of one’s timberland allocation because investors cannot influence investment strategy.
Furthermore, many such vehicles are not "pure-play" timberland investments because they also own manufacturing and distribution assets. Finally, returns for timber Reits and other exchange traded funds are highly correlated with the performance of broader investment markets, which means they do not offer the same portfolio diversification and inflation-hedging benefits of private market options.
Forestry is an expanding and exciting investment sector. Looking ahead, as it assumes a more prominent profile in institutional investment portfolios, investors will acquire a more informed perspective of its risk and return characteristics and there will be far greater understanding of its unique operational and investment attributes.
Download your FREE guide to Forestry Investments and Timber Investments here
Source FTAdvisor.com
Farmland Investment - London Investor Snaps up Australian Farmland
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A NEWLY-diversified agricultural force is taking shape in eastern Australia following the latest round of property acquisitions by London-based investor, MH Premium Farms (MHPF).
Funded by the family pension fund of expatriate Australian, Michael Hintze, MHPF is the investment vehicle now driving one of Australia’s fastest-growing farm portfolios.
Since making its debut in 2007, MHPF has amassed 11 properties in NSW and two in north Queensland, all managed by Growth Farms Australia.
Until now the portfolio has been heavily weighted towards southern NSW mixed farming – wool, prime lambs, cattle and winter cropping – but the latest purchases widen MHPF’s scope.
The group has just confirmed its purchase of three farming properties in the Walgett district (where it already owns “Marshmead”) and two cane farms in North Queensland.
At Walgett, contracts have been exchanged for the purchases of “Mourabie”, “West Mourabie” and “Bynia”, a combined area of 7981 hectares including 1880ha developed for cotton irrigation.
The sale was negotiated by Moree Real Estate, which advertised the properties for sale in conjunction with Kelly’s Property Sales of Walgett earlier this year by expressions of interest.
Situated 50 kilometres west of Walgett, fronting the Barwon River, the properties have in total 4875ha of established cultivation and will provide geographic and enterprise diversity.
Included in the sale package, thought to be worth between $11 million and $13m excluding crop, are 4781 megalitres of water entitlements, 17,000ML of off-river storage and extensive infrastructure.
Also this week, MHPF confirmed the purchase – through Ferry Property at Townsville – of two cane farms in the Burdekin region of north Queensland.
The two farms, near Ayr, have a combined production capability of 40,000 tonnes of cane off 315ha, and were bought walk-in, walk-out (including crop) for a reported $6.8 million.
The latest purchases bring the total holdings of the group to more than 45,500ha, worth nearly $120m (including water), and covering all mainstream agricultural enterprises.
Further acquisitions are in the pipeline and expected to be unveiled as the year progresses.
Mr Hintze is the founder and senior investment officer of CQS Management, a London-based hedge fund with assets of $US10.5 billion.
His Australian holding company has three local directors who oversee the acquisitions and operational aspects of the investment, and a team of legal and financial advisers.
The group’s recent growth has been driven by the directors’ view that rural land in Australia just now represents good value, in light of the strong global demand for “soft commodities”.
They believe land has the potential to increase sharply in value in the next few years, yielding attractive returns on the investments now being made.
A key strategy of the group has been to aggregate parcels of land where possible to achieve efficiencies of scale and cross-property synergies.
All proposed acquisitions are first inspected and assessed by Growth Farms Australia, which draws up a comprehensive farm plan for each new purchase, identifying capital spending needs and – for grazing farms – suggested stocking strategies.
Richard Taylor, a director of Growth Farms Australia, said while efficiencies of scale, synergies and diversity were all desirable objectives, they were not the core criteria.
“Having highly-productive and well-managed farms is even more important, and this is the focus for ongoing management of the portfolio,” he said.
Prior to the latest purchases, MHPF’s most recent shopping spree saw it pick up the 1733ha “Rippling Waters” grazing property, near Tumbarumba, late last year from the failed Willmott Forests timber investment group.
Download your FREE Agricultural Investment and Farmland Investment Guide here
Source: theland.com.au
A NEWLY-diversified agricultural force is taking shape in eastern Australia following the latest round of property acquisitions by London-based investor, MH Premium Farms (MHPF).
Funded by the family pension fund of expatriate Australian, Michael Hintze, MHPF is the investment vehicle now driving one of Australia’s fastest-growing farm portfolios.
Since making its debut in 2007, MHPF has amassed 11 properties in NSW and two in north Queensland, all managed by Growth Farms Australia.
Until now the portfolio has been heavily weighted towards southern NSW mixed farming – wool, prime lambs, cattle and winter cropping – but the latest purchases widen MHPF’s scope.
The group has just confirmed its purchase of three farming properties in the Walgett district (where it already owns “Marshmead”) and two cane farms in North Queensland.
At Walgett, contracts have been exchanged for the purchases of “Mourabie”, “West Mourabie” and “Bynia”, a combined area of 7981 hectares including 1880ha developed for cotton irrigation.
The sale was negotiated by Moree Real Estate, which advertised the properties for sale in conjunction with Kelly’s Property Sales of Walgett earlier this year by expressions of interest.
Situated 50 kilometres west of Walgett, fronting the Barwon River, the properties have in total 4875ha of established cultivation and will provide geographic and enterprise diversity.
Included in the sale package, thought to be worth between $11 million and $13m excluding crop, are 4781 megalitres of water entitlements, 17,000ML of off-river storage and extensive infrastructure.
Also this week, MHPF confirmed the purchase – through Ferry Property at Townsville – of two cane farms in the Burdekin region of north Queensland.
The two farms, near Ayr, have a combined production capability of 40,000 tonnes of cane off 315ha, and were bought walk-in, walk-out (including crop) for a reported $6.8 million.
The latest purchases bring the total holdings of the group to more than 45,500ha, worth nearly $120m (including water), and covering all mainstream agricultural enterprises.
Further acquisitions are in the pipeline and expected to be unveiled as the year progresses.
Mr Hintze is the founder and senior investment officer of CQS Management, a London-based hedge fund with assets of $US10.5 billion.
His Australian holding company has three local directors who oversee the acquisitions and operational aspects of the investment, and a team of legal and financial advisers.
The group’s recent growth has been driven by the directors’ view that rural land in Australia just now represents good value, in light of the strong global demand for “soft commodities”.
They believe land has the potential to increase sharply in value in the next few years, yielding attractive returns on the investments now being made.
A key strategy of the group has been to aggregate parcels of land where possible to achieve efficiencies of scale and cross-property synergies.
All proposed acquisitions are first inspected and assessed by Growth Farms Australia, which draws up a comprehensive farm plan for each new purchase, identifying capital spending needs and – for grazing farms – suggested stocking strategies.
Richard Taylor, a director of Growth Farms Australia, said while efficiencies of scale, synergies and diversity were all desirable objectives, they were not the core criteria.
“Having highly-productive and well-managed farms is even more important, and this is the focus for ongoing management of the portfolio,” he said.
Prior to the latest purchases, MHPF’s most recent shopping spree saw it pick up the 1733ha “Rippling Waters” grazing property, near Tumbarumba, late last year from the failed Willmott Forests timber investment group.
Download your FREE Agricultural Investment and Farmland Investment Guide here
Source: theland.com.au
Agricultural Investment - China Struggles to Cultivate Enough Soy
Download your FREE Agricultural Investment and Farmland Investment Guide here
China's soybean harvest will decline twice as far has had been thought this year thanks to the better returns to be had from other crops, which will cut area devoted to the oilseed to the lowest of the century.
China's soybean harvest will decline twice as far has had been thought this year thanks to the better returns to be had from other crops, which will cut area devoted to the oilseed to the lowest of the century.
China's soybean harvest will fall by roughly 800,000 tonnes to 14.4m tonnes, US Department of Agriculture attaches in Beijing said.
The deeper cut than acknowledged in an official USDA estimate of a 14.8m-tonne harvest reflects the greater profits achieved in corn in 2010-11, at an average of $700 per hectare, than from soybeans, which earned farmers $500 a hectare.
"The difference has negative impacted some soybean planting decisions for 2011-12," the attaches said in a report.
In the important producing province of Heilongjiang sowings are expected to tumble by 10-20%, particularly in central areas "where weather and growing conditions provide farmers more choices for grain crops", the briefing said, quoting information from "industry sources".
In other provinces, soybeans are expected to lose out to cotton, for which national sowings are expected to increase by 6.6% to 5.4m hectares, the China Cotton Association said on Thursday. The estimated rise in cotton area is, nonetheless, smaller than a 9.8% rise forecast in January.
China's overall soybean area, on a harvested basis, was pegged at 8.5m hectares, 200,000 hectares lower than the current USDA estimate and the lowest since 1999.
The extent of the decline will exacerbate a production deficit in China, the world's top soybean consumer and importer.
Indeed, the attaches stuck by an estimate of 72.5m tonnes for soybean use in 2011-12, "due to increased use of oilseed byproducts in animal production, and higher vegetable oil consumption" as wealthier consumers eat more and better.
Consumption of all protein meals is expected to rise by 6% to 65.6m tonnes, fuelled by rising hog production, which has hit a three-year high.
However, the attaches declined to raise their forecast for China's soybean imports in 2011-12, standing by an estimate of 58.0m tonnes, of which 25.0m tonnes are expected to come from the US, and viewing the extra shortall being made up from inventories.
China's soybean imports are a matter of market sensitivity, given their scope, accounting for nearly 60% of total world buy-ins.
The country imported 5.4m tonnes of soybeans in May, sufficient to keep the country on track to meet a USDA forecast for 2010-11 lowered to 54.5m tonnes.
US shipments export sales and shipments in the latest week were, at 412,000 tonnes and 163,000 tonnes respectively, above the pace needed to meet USDA forecasts.
Download your FREE Agricultural Investment and Farmland Investment Guide here
Source'; Agrimoney.com
Download your FREE Agricultural Investment and Farmland Investment Guide here
Source'; Agrimoney.com
FAO and RFA Disagree with Oxfam on Biofuels and Food Security
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According to the Global Renewable Fuels Alliance (GRFA) a recent Oxfam report rightly exposes the effects of dangerous commodity speculation, escalating oil prices, short-falls in agriculture technology, and climate change on future world food supplies. However the report fails in its assessment of biofuels and their impact on global food security.
A recent UN Food and Agriculture Organization report said that investment in biofuels could actually help improve food security in rural economies by creating jobs and boosting incomes. The head of the FAO's Bioenergy and Food Security project, Heiner Thofern, said that if "done properly and when appropriate, bio-energy development offers a chance to drive investment and jobs into areas that are literally starving for them."
"The GRFA fully agrees with the FAO that biofuels are part of the solution," stated Bliss Baker, spokesperson for the GRFA. "Oxfam should recognize that biofuels have the ability to help impoverished people by attracting much needed investment in agriculture, particularly in developing countries," added Baker.
Recently the International Energy Agency released their Technology Roadmap: Biofuels for Transport which found that by 2050, biofuels could provide 27 per cent of the world's total transport fuel which would eliminate around 2.1 gigatonnes of CO2 emissions per year. The IEA went on to say that this could be achieved while not compromising global food security.
"Some of the factors affecting global food security should concern Oxfam," stated Baker. "Nevertheless biofuels are a clear part of the food and energy security answer because they encourage greatly needed agricultural investment and reduce GHG emissions without jeopardizing food security," concluded Baker.
The Global Renewable Fuels Alliance is a non-profit organization dedicated to promoting biofuel friendly policies internationally. Alliance members represent over 65 per cent of the global biofuels production from 44 countries. Through the development of new technologies and best practices, the Alliance members are committed to producing renewable fuels with the smallest possible footprint.
Download your FREE Agricultural Investment and Farmland Investment Guide here
Source: marketwire.com
According to the Global Renewable Fuels Alliance (GRFA) a recent Oxfam report rightly exposes the effects of dangerous commodity speculation, escalating oil prices, short-falls in agriculture technology, and climate change on future world food supplies. However the report fails in its assessment of biofuels and their impact on global food security.
A recent UN Food and Agriculture Organization report said that investment in biofuels could actually help improve food security in rural economies by creating jobs and boosting incomes. The head of the FAO's Bioenergy and Food Security project, Heiner Thofern, said that if "done properly and when appropriate, bio-energy development offers a chance to drive investment and jobs into areas that are literally starving for them."
"The GRFA fully agrees with the FAO that biofuels are part of the solution," stated Bliss Baker, spokesperson for the GRFA. "Oxfam should recognize that biofuels have the ability to help impoverished people by attracting much needed investment in agriculture, particularly in developing countries," added Baker.
Recently the International Energy Agency released their Technology Roadmap: Biofuels for Transport which found that by 2050, biofuels could provide 27 per cent of the world's total transport fuel which would eliminate around 2.1 gigatonnes of CO2 emissions per year. The IEA went on to say that this could be achieved while not compromising global food security.
"Some of the factors affecting global food security should concern Oxfam," stated Baker. "Nevertheless biofuels are a clear part of the food and energy security answer because they encourage greatly needed agricultural investment and reduce GHG emissions without jeopardizing food security," concluded Baker.
The Global Renewable Fuels Alliance is a non-profit organization dedicated to promoting biofuel friendly policies internationally. Alliance members represent over 65 per cent of the global biofuels production from 44 countries. Through the development of new technologies and best practices, the Alliance members are committed to producing renewable fuels with the smallest possible footprint.
Download your FREE Agricultural Investment and Farmland Investment Guide here
Source: marketwire.com
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