FOOD SECURITY: India prohibited wheat exports that the world was counting on to alleviate supply constraints sparked by the war in Ukraine, saying that the nation’s food security is under threat | #OATT#wheat 🇮🇳 🌾 bloomberg.com/news/articles/…
Before the export ban, India was expected to be one of the top-10 wheat exporters for the 2022-23 crop season. Removing all (or part of) India's expected wheat exports creates a massive hole in the global supply and demand. Wheat prices will rise further, and quickly #OATT
After the 2007-08 and 2010-11 food crisis, the G20 debated banning the use of food export restrictions, and reducing support to biofuels. But the communique was watered down, with China and the US joining forces (US on biofuels, China on exports bans) ft.com/content/aca4d5…
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OIL MARKET: @IEA launches 10-point plan to "restrain" oil demand, including recommending cutting highway speeds by 10 km/h; making public transport cheaper, car-free cities on Sunday, etc.. It's the 1970s-style savings program (and it's needed!) #OOTTiea.org/reports/a-10-p…
OIL MARKET: @IEA believes that all its measures can reduce OECD oil demand by ~2.8m b/d via restrain measures. Reducing highway speeds by 10km/h alone can cut oil demand by 400,000 b/d, according to the agency's modelling.
I had been advocating for similar measures. Outside France, however, not a single OECD government is taking them seriously. For now, most are doing the exactly the opposite: cut gasoline taxes and use subsidies to support consumption bloomberg.com/opinion/articl…
This week, The World for Sale comes out in paperback
It explains how oil and commodity markets work, how they influence geopolitics, and the extraordinary power of a few traders you've probably never heard of
The book is coming out in paperback March 10th in most of the world. US and Canadian readers have to wait until next month, but the hardback is available now. Or you can buy it anywhere as ebook or audiobook smarturl.it/TheWorldForSale
Some alternatives to Amazon for UK readers (anyone struggling to find a copy in other parts of the world, DM us and we will do our best to help):
EUROPEAN ENERGY CRISIS: Norway will **subsidize** electricity after wholesale prices skyrocketed, at a cost of nearly $900 million. The government will cover half of households’ power costs from December to March when prices rise above a certain level bloomberg.com/news/articles/…
(I wonder if the Norwegian government is going to think a bit about why this is happening, and the role the interconnectors are playing -- and how Norwegian hydro power has become de facto "baseload" power for certain countries struggling with variable wind generation)
(Second thing I do wonder: does the electricity subsidy also cover re-charging an EV in Norway?) #Tesla#EVs
CLIMATE CHNAGE: UK has published a draft of the #COP26 "cover decision" (think about it as the political doc from the summit). Retains Paris language of 1.5-2.0 degrees. Ask for quick NDCs update. Calls for coal phase out, and end to fossil fuel subsidies unfccc.int/sites/default/…
As in every international negotiation, expect the document to suffer multiple changes, and be watered-down. As it happened at the G20, the early draft is an aspiration by the presidency, and in some ways designed show to environmentalist that London did try hard at #COP26
The fact that "fossil fuel subsidies" is mentioned is grabbing quite a lot of attention. Yet, it has been mentioned in G20 communiques for the last 11 years (that said, the G20 language is a bit more nuanced -- weaker -- than the #COP26 early draft language)
Two days ahead of the OPEC+ virtual meeting, US President Joe Biden is pointing fingers: "If you take a look at gas prices and you take a look at oil prices that's a consequence of thus far the refusal of Russia or the OPEC nations to pump more oil" #OOTT
The White House is, in some ways, boxing itself in a corner. If Saudi Arabia and Russia call the threats a bluff, President Biden will have two options: quickly counteract (SPR release?) or retreat and look weak. Both options have a lot of downside for the White House | #OOTT
The very public American pressure on OPEC+ keeps building up, with U.S. Secretary of State Antony Blinken asking his UAE counterpart also for an oil production increase on the sidelines of the #COP26 meeting in Glasgow | #OOTT
My favorite commodity index has hit an **all-time high**. This is the CRB / BLS US spot raw industrials index, a measure of some really old fashioned commodities. If you are on @TheTerminal, the ticker is CRB RIND Index [GO]. If you want to know more, see the nerd thread 🤓🧵 1/6
The CRB / BLS US spot raw industrials index excludes energy and foodstuff, and focuses on, well, yes, industrial stuff. Its current 13 components are: burlap, print cloth, tin, copper scrap, rosin, wool, cotton, rubber, zinc, hides, steel scrap, lead scrap, and tallow 2/6
It is the oldest of all indices measuring commodities prices. It tracks its origins to Jan 1934, when the U.S. Department of the Treasury asked the Bureau of Labor Statistics (BLS) to prepare a commodity price index. The data was released publicly first in 1940 3/6