Soybean prices are on the rise. As this article from Bloomberg highlights, some new interesting trends have emerged in recent years which commodity investors would do well to take note of.
China Seen Boosting Purchases of Soybeans as Feed Demand Expands
[Source] : Bloomberg
Crushers in China, the world’s biggest buyer of soybeans, boosted purchases last week as rising demand for livestock feed increased profits from processing, according to a Bloomberg survey.
Companies ordered 30 cargoes from the U.S. or South America, the equivalent of about 1.8 million metric tons, according to the median of estimates from five crushers and one researcher compiled by Bloomberg. That compares with a usual weekly average of 10 cargoes to 20 cargoes, respondents said.
China canceled 1.16 million tons of shipments since Dec. 18, according to the U.S. Department of Agriculture, which increased concern consumption may be slowing. Fresh purchases by China, which buys more than 60 percent of globally traded beans, suggest demand is recovering as U.S. supplies decline.
“Traders are securing more shipments for the next two months” because of the looming shortage in supplies and limited loading capacity in South America, said Monica Tu, analyst at Shanghai JC Intelligence Co., who took part in the survey.
Consumption of soybean meal in China is increasing as farmers fatten hogs before the Lunar New Year festival in February when pork demand rises, Tu said from Shanghai yesterday. Stockpiles of soybeans in the U.S, the biggest producer last year, were 1.966 billion bushels on Dec. 1, 17 percent less than a year earlier, according to the USDA.
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As of recent, I have been keeping a close watch on newly published literature, news and essentially whatever catches my attention on how US Foreign Policy in Latin America might evolve over the course of the next decade.
This topic has recently garnered a fair share of attention for multiple reasons. For starters, the world today is a very different place when compared to the world of 1993 when the Western Hemisphere attempted to foster the foundations for a Free Trade Area of the Americas (FTAA). This foray of attempting to implement a Hemisphere wide free trade zone failed miserably for various reasons. However, as we kick off the new year, it is clear to many policy experts, it will be necessary for the US, and its counterparts throughout Latin America to adapt and redefine their foreign policy goals within the context of 21st century geopolitics and an ever more increasingly globalized world economy.
Christopher Sabatini, author of the article “In Latin America, Creative Focus Could Pay Off,” published by World Politics Review on January 8, 2012 offers great insight into how the US could make some changes in its Latin America Foreign Policy Agenda for the benefit of not only the US, but the region as a whole. Below are a few excerpts from his article which you can read the full version of by click the link above or at the end of this entry.
For decades, Latin America policy specialists have lamented how the Western Hemisphere is never a priority for U.S. presidents. For all the United States’ economic and cultural ties with the region, however, America’s neighbors to the south do not face the kinds of imminent threats that tend to get a president’s undivided attention — and fortunately so.
But while Latin America may never, and arguably should never, figure on the list of the U.S. executive’s top concerns, several innovative pushes across the U.S. foreign policy apparatus would not only dramatically help advance U.S. relations and leadership in the region, they would also set the tone for relations for decades to come, while making sure the region never gets what many have wrongly longed for: the president’s urgent attention.
In 2011, trade between the United States and Latin America and the Caribbean totaled $800 billion, with the economies to the south of the Rio Grande consuming more than 20 percent of U.S. exports. The rise of Asian economies notwithstanding, the volume of U.S.-Latin American trade is still greater than that with China for either side. More important for U.S. workers, America’s southern trade partners are buying high-end manufactured American goods. Thirteen countries, including Chile, Colombia, Guatemala, Venezuela and Mexico, import more from the U.S. than from any other country, much of it in the form of goods like computers, telecommunications equipment, cars and machinery.
Though little-known, the negotiations to create the Trans-Pacific Partnership (TPP) could be one of the most important institution-building initiatives since the Cold War.
To be sure, the next four years will see hemispheric crises that will land on the president’s desk. Among them will likely be some form of political transition in Venezuela and possibly Cuba, and ongoing security concerns in Mexico and Central America. For too long, however, crises and specific issues like security and narcotics have driven U.S. policy in the hemisphere.
In an era of selective cross-hemispheric convergence and greater competition among states in the region, the Obama administration now needs to look for ways to leverage its relations with economic and political allies in Latin America to expand the hemisphere’s global reach, seize the advantages of the region’s global ambitions and break free of the ideological baggage of the past. This requires only that the president send a signal of executive commitment and interest by setting in motion a limited series of initiatives. Doing so will update and remake our relations not only for the next four years, but for the next generation.
Christopher Sabatini is the editor-in-chief of Americas Quarterly, published by the Americas Society/Council of the Americas (AS/COA). He would like to thank Andreina Seijas of the AS/COA for her research.
Click here to read the complete article
[Source] : The Economist
The Expanding Middle
Nov 10th 2012
A decade of social progress has created a bigger middle class—but not yet middle-class societies
JAMMED onto a spit of land that juts into the azure Atlantic near the centre of Recife, in Brazil’s north-east, Brasília Teimosa was until a couple of decades ago a favela of wooden fishermen’s huts. Now its streets are lined with brick houses, some of three stories and clad in decorative tiles but others jerry-built. It has seafood restaurants, shops and a couple of bank branches, but also piles of uncollected rubbish. Many marketing types and economists would hail its residents as members of Brazil’s burgeoning “new middle class”, who have become avid consumers.
That is not how Francisco Pinheiro, a community leader who was born in Brasília Teimosa, sees it. “Economically, it’s much better off than it was,” he says. “But a middle-class person is someone who lives in Boa Viagem”—a smart beachfront residential suburb close by—“with a car, an apartment and an income of 3,000 reais ($1,500) a month.” In Brasília Teimosa, he adds, the majority earn less than two minimum wages ($613)—often shared among a family of four or more.
Click here to read the full article direct from The Economist
As many news programs, news papers, bloggers, and commentators of all sorts have mentioned — Latin America (Immigration Reform and the War on Drugs to) where virtually ignored throughout the entire campaign and mentioned only one time during the Presidential Debates by Mitt Romney.
Yes there are a great many problems around the world. Particularly in the Asia-Pacific, North Africa, and Middle East regions. Not to mention the Eurozone economic crisis, or Hurricane Sandy, but to totally ignore 3/4 of the geographic space in the Western Hemisphere… As your author I say “Shame on you United States of America, and I implore your elected officials to begin paying more attention to your neighbors down South!”
Below CSA presents some articles from different perspectives and sources which are examining this question of why the US has so ignored the region of Latin America.
By Brian Winter
SAO PAULO | Fri Nov 9, 2012 9:55am EST
(Reuters) – President Barack Obama will face an unprecedented revolt by Latin American countries against the U.S.-led drug war during his second term and he also may struggle to pass new trade deals as the region once known as “America’s backyard” flexes its muscles like never before.
Washington’s ability to influence events in Latin America has arguably never been lower. The new reality is as much a product of the United States’ economic struggles as a wave of democracy and greater prosperity that has swept much of the region of 580 million people in the past decade or so.
It’s not that the United States is reviled now – far from it. Although a few vocally anti-U.S. leaders like Venezuela’s Hugo Chavez tend to grab the media spotlight, Obama has warm or cordial relations with Brazil, Mexico and other big countries in the region.
Most Latin American leaders were rooting, either privately or publicly, for his re-election on Tuesday.
Click here to read the complete article direct from Reuters
It has been this year’s most notable absentee: whatever happened to Latin America as a theme in the presidential campaign?
A great paradox in Tuesday’s United States elections is that of the growing significance of the Hispanic vote and the almost total absence of Latin America on the candidates’ agenda. The Hispanic vote is particularly important in swing states such as Florida and Nevada, although its presence is much wider—in California, Texas, Arizona, New York, New Mexico and Illinois, among other states.
Though the relationship between Hispanic voters and black candidates has been historically a complex one, Hispanics came through for Barack Obama in 2008, with 65% of their votes going to the candidate of “hope and change”. This time, polls indicate as much as 70% of them will vote for the incumbent president. This could make the difference between winning or losing in Nevada (where Obama is ahead, albeit by a small margin) and in Florida (which is essentially tied).
In years to come, the state to watch is Texas. According to many observers, the growing Mexican-American population there, whose most visible up-and-coming leader is Julian Castro, the charismatic mayor of San Antonio, who delivered a rousing keynote at the Democratic Convention in Charlotte last August, will mean that some point in the near future the Hispanic vote will have Texas switch from a Republican to a Democratic majority state. With California and New York already in that camp, flipping Texas may mean relegating the Republican party to a permanent minority condition in the Electoral College, confined to the Deep South and the Rocky Mountain states.
Click here to read the complete article direct from the Guatemala Times
By Robert Valencia
A great share of the world grew disappointed after seeing the last debate between President Barack Obama and former Governor Mitt Romney, where foreign policy rhetoric geared heavily toward Middle East and Chinese affairs. Latin America only received one brief mention by Romney. Given the current domestic gridlock in Washington D.C. and the mounting turmoil in Syria and Afghanistan, Latin America is doomed to be on the back burner once again, but a new White House administration should change this by curbing the War on Drugs and strengthening its bonds with Brazil, the second largest economy in the Americas
Latin Americans should not expect a 180-degree change in U.S. policies after the election. During the first Republican debates this year, three presidential hopefuls—Romney included—talked about Cuba and Venezuela’s possible connections with Al-Qaeda, and expressed their wish to see Fidel Castro dead. Yet no Republican candidate offered concrete steps in fostering democracy, strengthening economic bonds or improving security.
Both Obama and Romney have vowed to continue the U.S. War on Drugs. At the Summit of the Americas in Colombia, President Obama emphasized that he would not change the draconian policy, despite its dire consequences for those both north and south of Rio Grande. Likewise, Romney made clear on U.S. Hispanic TV channel Univision that he would continue the same drug policies as the current administration. No, the White House will not change its position, despite the outrageous death toll in Mexico, the new routes for smuggling narcotics onto U.S. streets, the indiscriminate incarceration of U.S. citizens of color for possessing small amounts of drugs, and the disastrous effects on Central American villages of military raids against drug kingpins.
Click here to read the complete article direct from the World Policy Blog
The Other Side of Paradise
November 8, 2012
Early Wednesday morning the Caribbean breathed a sigh of relief with the re-election of Barack Obama. A Romney victory would have ushered in a period of uncertainty, as it was expected that he would pursue a more aggressive stance towards Cuba and other left leaning governments in the region. During the debates however, it became apparent that Latin America and the Caribbean was not an area of deep concern for either candidate as the foreign policy discussion was intensely focused on matters relating to the potential conflict with Iran, security in post-Gaddafi Libya, Israel/Palestine, Syria and the trade imbalance with China.
While Caribbean Prime Ministers immediately extended their congratulations to Obama, their expressions of cautious optimism also came with calls for more meaningful engagement with the region. For example, Dominica’s Prime Minister Roosevelt Skerrit sent his congratulations to Obama, remarking that “The relationship between the United States and Dominica continues to be strong, based on mutual respect…we work very diligently on matters relating to regional security and we look forward to advancing those efforts. Clearly, the U.S. focus is on anti-terrorism matters and they moved away from issues relating to development in the region. But I am hoping that the new term of President Obama there would be some kind of re-direction towards developmental issues.”
Click here to read the complete article direct from NACLA
By Eric FarnsworthVice President, Council of the Americas
Assuming that the world does not end, according to the Mayan calendar in December, 2013 will be an important year south of the U.S. border. There are a number of issues to watch in determining the hemisphere’s direction, although most depend less on the Nov. 6 election results and more on factors that are out of White House control. Savvy observers of the region will watch the 10 “C’s” as the real policy drivers.
The first of these is Castro, as in Raul and Fidel. The U.S. election may bring a moderate tightening or loosening of U.S. restrictions on engagement with the island. The Cuban regime may or may not continue its episodic policy liberalization — Cuban perestroika — as a means to extend rather than overturn the Cuban system. But the real driver of change will be the death of one or both of the Castros. While it’s true that no one has yet won a bet predicting their death, even the Castro brothers will succumb at some point to nature. Each passing year makes that more likely. When they do, there will be a power struggle on the island, and the United States will be faced with the critical decision of how to respond. This will be a game-changer, with historic implications, sucking the oxygen out of other hemispheric policy matters at least for a time. It is the one issue above all others that has the potential to scramble hemispheric policy, putting bilateral relations on the road to normalization and removing an irritant in the broader hemispheric agenda. Or not. The truth is that nobody knows what will come after the Castros, but the U.S. response must be nuanced and appropriate so as to encourage, rather than discourage, the advent of true democracy on the island.
The second “C” is related: Chavez. Having been re-elected Oct. 7 to another presidential term, Venezuela’s Hugo Chavez nonetheless is battling cancer, which some say is quite serious; others give a more optimistic prognosis. Whatever the truth, it appears that Chavez is taking steps to position his supporters to continue the Bolivarian Revolution after he passes, most notably with the elevation of Nicolás Maduro to the vice presidency. Still, nobody in Venezuela appears to have the same charisma as Chavez, whose margin of victory in October was much less than in previous elections. Chavez won; Chavismo apparently took it on the chin. A power struggle is a strong possibility after Chavez passes away. Here, again, if Chavez dies, the United States will face an immediate challenge, working with others in the hemispheric including Brazil and Colombia to midwife a peaceful transition with a hoped for institution of the transparent social democratic model that has worked wonders in Brazil, Chile, Peru, Uruguay, and elsewhere in the Americas.
Click here to read the complete article direct from The Huffington Post
US – Latin America: Obama and Romney forget Latin America
Latin America – China: Los latinoamericanos de origen chino (parte I)
Latin America – China: El Libro Blanco chino sobre América Latina y el Caribe
Peru – China: Perú comienza a pensar en el turismo chino
[Source] : VNS
HA NOI (VNS)— Viet Nam will create favourable conditions to help Bolivia enter the ASEAN market, President Truong Tan Sang
Sang made the pledge while receiving visiting Bolivian Vice President Alvaro Garcia Linera in Ha Noi yesterday.
President Sang also expressed his hope that the two countries will continue to strengthen co-operation in all fields.
He spoke highly of the visit by Linera, the most senior State leader of Bolivia ever to visit Viet Nam since the two countries set up diplomatic ties.
Linera said the trade relationship between the two sides has seen positive changes but is currently failing to match its potential, adding that one of the main aims of his visit is to seek ways to create a mechanism for increased bilateral trade collaboration.
Click here to read the complete article
[Source] : Bloomberg
By Matt Craze and Mario Sergio Lima - Sep 13, 2012 4:00 PM GMT+0800
Leonildo Bares, a soybean grower near the Amazon farming frontier town of Sinop, said he’s so confident prices for the commodity will stay near record highs that he’ll extend his crop to neighbors’ boggy cattle pastures.
Confined by Brazil’s crackdown on logging in the Amazon, the farmer talked his neighbors into growing soybeans on their cleared land and sharing the profit. Bares, whose 420-hectare (1,038-acre) farm in the center-western state of Mato Grosso extends on what was untouched rainforest in the 1970s, plans to boost planting to 650 hectares. About 1 million hectares of the state’s pastures, an area the size of Jamaica, probably will be converted to soybean crops in coming years, he predicts.
“The pastures of Mato Grosso can be turned into soybean plantations and probably will,” Bares, who’s also the president of Sinop’s farmers association, said in a telephone interview from the city. “Anyone with the knowledge and money who’s willing to come here and do it, can do it.”
South American farmers like Bares have become the counterpoint to the worst drought in the U.S. Midwest in 76 years as they sow record crops during a global shortage of the oilseed used as animal feed in Asia. Brazil, Argentina, Paraguay, Bolivia and Uruguay will boost output by 34 million metric tons to 148.5 million in the 2012-2013 season, more than offsetting a decline of about 11.5 million tons to 71.7 million in the U.S., the Department of Agriculture said yesterday.
Click here to read the complete article
[Source] : China Dialogue
September 10, 2012
China’s growing agribusinesses and demand for soybeans and meat is bringing intensive farming and the risk of further deforestation in Brazil and beyond. Tom Levitt reports.
The dynamics of Chinese agriculture are changing. While it may still be largely self-sufficient in food, the country is expected to enter an era of rising food imports and in particular, animal feed. But how ready is China to take responsibility for the environmental impact of this growing overseas footprint?
Over the past two decades, China has seen a monumental surge in soybean imports. By 2030, China is expected to consume 72 million tonnes of soybeans from overseas – more than one-quarter of the world’s total soybean production today.
The impact, environmentalists fear, is greater pressure on uncultivated forested land in Brazil, the world’s second largest soybean producer after the United States and a major exporter to China. In 2011, more than 67% of Brazil’s soybean exports were sent to China. By no coincidence, the South American country is now emerging as a major focus of investment for China’s expanding agribusinesses.
Click here to read the complete article