World in brief

Drought strikes southern Africa

JOHANNESBURG, South Africa (Reuters) — A scorching drought that has cut South Africa’s key corn crop by a third is likely to continue into the southern hemisphere summer as an El Nino weather pattern strengthens, according to the latest forecast from the South African Weather Service.

The forecast for the October to February summer period said the “likelihood of extreme warmer temperatures over most of South Africa is high.”

The current El Nino weather phenomenon is expected to peak between October and January and could turn into one of the strongest on record, experts have said.

This could bring drier conditions to southern Africa, which is already suffering from drought.

Zimbabwe’s government in July halved its economic growth forecast to 1.5 percent this year from 3.2 percent, blaming the drought-stricken agricultural sector.

Dry conditions at the start of this summer could delay planting of the staple corn crop throughout the region, with ripples through the wider economy as food prices climb and the agricultural sector shrinks.

Brazil lowers coffee production outlook

SAO PAULO, Brazil (Reuters) — Brazil’s agriculture ministry lowered its forecast for the 2015 coffee crop, which is in the final days of harvest, by five percent to 42.15 million 60 kilogram bags, down from 45.34 million in 2014.

The agriculture ministry’s Conab crop supply agency said it reduced its estimate by 2.13 million bags due mainly to poorer-than-expected yields after the drying of the harvest.

In the third of four annual estimates from the world’s largest coffee producer, Conab said arabica beans, the highest grade, would account for 31.3 million bags, compared with 32.91 million in its previous forecast in June and 32.31 million harvested in 2014.

Conab cut its estimate for lower grade robusta beans to 10.85 million bags from 11.35 million. The 2014 harvest came to 13.04 million.

Ocean sanctuary set aside

WELLINGTON, New Zealand (Reuters) — Waters north of New Zealand are set to become one of the world’s largest ocean sanctuaries, covering an area roughly the size of France, with a full ban on fishing and mining, New Zealand prime minister John Key said at the United Nations.

Called the Kermadec Ocean Sanctuary, the area covers 620,000 sq. kilometres of ocean, encompasses a string of undersea volcanoes and is home to endangered marine life including whales, dolphins and turtles.

The announcement surprised New Zealand’s seafood export industry, worth C$1.2 billion a year, and will prevent mining firms gaining seabed prospecting rights.

“With no forewarning from government, the industry needs time to consider the full implications,” said George Clement, chair of industry body Seafood New Zealand.

He added the ban would also apply to tuna, the fourth largest seafood export, according to 2013 data.

The sanctuary legislation, tabled by the government for 2016, will also preclude all mining exploration and prospecting activities in the area.

Russian nixeswheat export tax

MOSCOW, Russia (Reuters) — Russian prime minister Dmitry Medvedev has signed an order to cut a wheat export tax from Oct. 1 to a level previously proposed by the government.

Russian wheat exports have been constrained by the tax, which has prevented exporters from fully benefitting from the weaker ruble and a large grain crop.

The new duty formula is set at 50 percent of the customs price minus 6,500 rubles ($99) per tonne, but not less than 10 rubles per tonne, it added.

Pesticide protections

(Reuters) — About two million American farm workers and others who work or live near farm fields will have more protection from hazardous pesticides under changes unveiled by federal officials in United States.

The changes to the Agricultural Worker Protection Standard is designed to reduce the risk of injury and illnesses from contact with pesticides on farms and in forests, nurseries and greenhouses, according to officials with the U.S. Environmental Protection Agency (EPA) and U.S. Department of Labor.

“We depend on farmworkers every day… they deserve fair, equitable working standards with strong health and safety protections,” EPA Administrator Gina McCarthy said.

Each year, 1,800 to 3,000 occupational incidents involving pesticide exposure are reported from operations covered by the Worker Protection Standard, the EPA said. That range is thought to be lower than the actual number of incidents that occur, the agency said.

The EPA said it is additionally concerned about low level, repeated exposure to pesticides that may contribute to chronic illness as well.

U.S. farm workers, including migrant workers, commonly perform tasks by hand on pesticide-treated crops, such as harvesting, thinning and pruning. Additionally, workers often mix, load and apply pesticides.

United Farm Workers president Arturo Rodriguez said the changes were badly needed for a population that is largely low-income and made up of minorities.

Dreyfus profits fall

PARIS, France (Reuters) — Weaker commodity markets led to a halving of first-half profit at Louis Dreyfus Commodities but the global trading group said its growing volumes showed food could withstand economic pressures better than other raw materials.

Louis Dreyfus, like traditional rivals Archer Daniels Midland, Bunge and Cargill, which dominate trading in agricultural commodities, has been squeezed by falling prices linked to large global harvests and faltering growth in major commodity markets like Brazil and China.

First-half consolidated net profit, group share, fell to US$130 million from $260 million in the first half of last year, while net sales dropped to $26.4 billion from $33.7 billion, the family-owned firm said in a statement.

Its traditional rivals each disappointed investors with their most recent quarterly results, citing factors including the downturn in Brazil and poor margins for crop-based ethanol fuel.

Volumes shipped by Louis Dreyfus, however, rose four percent in the first half in what the group said was a positive sign.

Indonesia culls chickens

JAKARTA, Indonesia (Reuters) — Indonesia is set to cull millions of chickens to ease supply swings in the local meat market caused by a drive for self-sufficiency, the latest in a string of food policies that have backfired for the government of president Joko Widodo.

Since coming to power in October, Widodo has been pursuing food self-sufficiency to protect farmers, but the outcome has often been volatile prices and concern from investors — eroding support for the government.

A reluctance to import rice has made Indonesian wholesale prices among the most expensive in the region this year, while delays in issuing raw sugar import permits caused local refineries to close.

The troubles in the meat market began when Indonesia cut live cattle imports for the third quarter, forcing consumers to switch to poultry and pushing average local broiler chicken prices 15 percent higher than the first half-year average. The spike came despite the fact that output was already outstripping demand by up to 30 percent. Prices have fallen since with live birds on farms selling at about 12 to 18 percent below production costs.

To ensure stable prices, Indonesia plans to cull six million breeder chickens, industry sources said.


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