Archive for the ‘commodities’ Category

Chinese oil workers kidnapped in Sudan

October 19, 2008

SARAH EL DEEB, Associated Press Writer

KHARTOUM, Sudan – Unknown assailants kidnapped nine Chinese oil workers in southern Sudan, a Chinese diplomat in Khartoum said Sunday.

The men were working Saturday when they were abducted in southern Kordofan province, the epicenter of Sudan’s oil industry and next to Darfur where ethnic African rebels are fighting the Arab-dominated government.

A farmer rides past a PetroChina petrol station in Beijing. ... 
A farmer rides past a PetroChina petrol station in Beijing. Nine Chinese oil workers have been kidnapped near Sudan’s disputed central oil district of Abyei, the Chinese embassy has said, with a Sudanese driver also feared missing.(AFP/File/Frederic J. Brown)

A search was under way for the men, the diplomat said on condition of anonymity because he was not authorized to speak to the press. Several workers were not taken and managed to inform authorities, he added.

The rebels, along with many international rights activists, accuse China of indirectly funding Khartoum’s war effort in Darfur through massive investment in Sudan’s oil industry.

China buys two-thirds of Sudan’s oil exports, and oil sales account for 70 percent of the African country’s export revenue.

Darfur rebels attacked the Chinese-run Defra oil field in Kordofan last October, kidnapped two foreign workers and gave Chinese and other oil companies a week to leave the country.

Two months later, Darfur rebels attacked an army garrison in another Chinese-run oil field in the same province.

Some 140 Chinese engineers and troops are also deployed in Darfur and were among the first reinforcements sent by the United Nations, which took over peacekeeping in the western Sudanese region in January.

The Sudanese government quickly approved the Chinese contingent, even as it vetoed contributions from other countries because they were not African — including a Scandinavian engineering corps.

 

An oil rig in a file photo. (File/Reuters) ...

The next big war could be over commodities; The current financial meltdown could be the start

October 12, 2008

The struggle for the future leadership of the world may have already started.

By John E. Carey
Peace and Freedom

Earlier this year, President Bush went to Saudi Arabia to ask his friends there to increase oil production. The White House believed that by increasing supply, the price of gasoline per gallon at your friendly service station would drop. The president was rebuffed.

Then the United States urged upon the other large users of oil in the world community to join the “produce more” bandwagon.

China, Japan, India and South Korea went along with the U.S. plan.

Cabinet ministers from the five countries, which account for more than half the world’s consumption of energy, agreed that the sharp surge in oil prices was a menace to the world economy, and that more petroleum should be produced to meet rising demand.

The five consumer countries, meeting in Japan before an energy conference of the Group of Eight industrialized nations (G-7 plus Russia) on June 8, 2008, argued that the unprecedented prices were against the interests of both producers and consumers, and imposed a “heavy burden” on developing countries.

The Organization of Petroleum Exporting Countries (OPEC) current president, Chakib Khelil, said that the cartel will make no new decision on production levels until OPEC’s September 9, 2008 meeting in Vienna.

So in just a few weeks time, we witnessed the President of the United States pleading for more production and the senior energy ministers from the U.S., China, India, Japan and South Korea joining in a chorus.

We at Peace and Freedom believe that when the engine of the free market jumps the tracks and supply and demand are ignored; one had better get ready for bad blood.

Then we have food. In the Philippines the people took to the streets demanding more rice. In Egypt, the people took to the streets demanding more bread. And some bad blood developed between Thailand, the world’s leading rice exporter, and Vietnam, perhaps the second most important rice exporter.

It seems the Vietnamese had underbid the Thais on contracts to export rice. The Vietnamese saw this as good business. The Thais viewed it as theft. Never mind that Thai rice is of higher quality and thus cists more.

China recently announced that it had “overbuilt” its industry and removed too much farmland from production. China now is instituting new regulations to preserve farmland and it is mapping a strategy to import more food.

Ethanol and other bio fuels seemed like a great idea to help add to U.S. oil stocks. But when all that corn disappeared into your fuel tank, the price of all corn went up. And corn not only feeds people but it is a huge source of livestock feed. So the price of pork and beef and all that other livestock that makes its way to the dinner table went up.

And food and fuels have never been in such demand. Never mind the huge increases in global population; with the combined populations of India and China eight times that of the U.S.

The world, believe it or not, is becoming more “middle class.” That means more people want gas burning cars which suck up a lot of fuel and add to global pollution. These new “middle class” folks also want a higher protein diet.

If one eats rice or corn or other grains the costs are somewhat manageable. But it takes four times more grain (and sometimes as much as six times) to put meat on pork or cattle before human beings eat that meat. So the high protein diet has a huge cost. It sucks up a lot more grain that human grain eaters ever would and it means the eaters need more dollars, rupees euros, yen or other denominations to buy every meal.

Bacon and eggs are more expensive, say, than the traditional rice bowl.

Finally, all these goodies, usually called commodities, are moving around the globe.

The Associated Press had an excellent article by Gavin Rabinowitz out on June 7 called “India, China jostle for influence in Indian Ocean.”

A rather ominous title.

Mr. Rabinowitz pointed out that looking south from Sri Lanka “just over the horizon runs one of the world’s great trade arteries, the shipping lanes where thousands of vessels carry oil from the Middle East and raw materials to Asia, returning with television sets, toys and sneakers for European consumers.”

That shipping lane is a possible flashpoint between India and China. Add in Japan, which gets just about all of its oil by that sea lane. And don’t forget the U.S. and the U.S. Navy. Those boys don’t want to see that sea lane interrupted by war, terrorism, piracy or any other form of bad blood.

So the bottom line, from our small window of the world is this: The next big war could well be over “commodities.”

We’ve used food and oil here as the most obvious examples of commodities worth fighting for. But it could be over uranium, tin, gold or who knows what. Even fresh water.

California is already starting to limit development due to water shortages. Australia is in the midst of a multi-year drought which has crippled Aussie grain production. And over use of fertilizers and pesticides in China and Vietnam have poisoned much of the ground water.

The next big war could well be over commodities.

But now add to all this the financial “crisis” or “meltdown.”

Already some very sharp international financial analysts are saying that the leadership of the world is already changing.

“In a very bizarre way, roles have been reversed in the global economy. The typical troublemakers of the global economy, the emerging markets, are actually now the world’s creditor,” said Alex Patelis, head of international economics at Merrill Lynch.

There could be a new world order brewing.  And commodities, trade and the global economic situation are at the core.

Aussies joke – and hope – that China can save capitalism

October 9, 2008

SYDNEY (AFP) – A cartoon on the front page of Australia’s national newspaper Thursday neatly illustrates an irony admitted by the government: communist China could save capitalism.

File photo shows the Chinese and Australian flags in Sydney. ... 
File photo shows the Chinese and Australian flags in Sydney. A newspaper in Australia has used a cartoon to illustrate the fact that the powerful communist Asian nation could save Australian capitalism from the global credit crisis currently afflicting markets.(AFP/Torsten Blackwood)

The illustration shows a Chinese man in a Superman outfit telling exactly this to a bankrupt, cigar-smoking Wall Street tycoon covering his nakedness in a barrel.

“Oh, you’re just loving this, aren’t you,” the fallen high-flyer replies in the cartoon in The Australian.

Amid turmoil in the world financial sector, the International Monetary Fund predicted Wednesday that China’s economy would grow at more than 9.0 percent next year while much of the West faces recession.

That’s good news for Australia, whose own economic boom has been driven for years by China‘s insatiable demand for mineral resources such as iron ore for steelmaking and coal to fire up its industries.

“China is now a major influence in the world economy and it’s significant that the IMF doesn’t downgrade its growth prospects,” Finance Minister Lindsay Tanner told national radio Thursday.

“So we are well positioned to continue to sell an awful lot of exports to China and we believe that that’s one of the important factors that’s protecting Australia, to some extent, from the influences of the US financial crisis,” he said.

Read the rest:
http://news.yahoo.com/s/afp/20081009/od_afp/financebank
ingaustraliachinaoffbeat_081009161249

China Hikes Tariffs to Stem Fertilizer Exports

April 17, 2008

BEIJING (Reuters) – China slapped massive tariffs on fertilizer exports on Thursday in a bid to control rapidly rising domestic agricultural costs and inflation, and above all to ensure it grows enough grain to feed its 1.3 billion people.

Beijing’s 100 percent-plus tariffs on some fertilizer exports should temper domestic costs but may drive up prices in world markets that depend on China’s supplies, the latest in a series of commodities-related protectionist moves around the world that risk fuelling rather than cooling global food costs.

File photo shows a Chinese farmer working in his field next ...
File photo shows a Chinese farmer working in his field next to a chemical factory near Yixing Town in Jiangsu province. The amount of farmland in China has shrunk to critical levels, state press reported on Thursday(AFP/File/Mark Ralston)

China’s anxiety is greater than most — it is struggling to grow enough corn and wheat to feed its multiplying urban eaters, and fears higher costs of fertilizer, diesel and labor might discourage farmers from planting grains, thereby raising feed costs for meat breeders and exacerbating inflation.

Read the rest:
http://www.nytimes.com/reuters/world/international-
china-fertiliser.html?_r=1&oref=slogin

Perils in The Price Of Each Grain of Rice

April 3, 2008

By David Ignatius
The Washington Post
Thursday, April 3, 2008; Page A17

You may have missed the front-page article in the New York Times last Saturday, with the one-column headline written in clipped newspaperese: “High Rice Cost Creating Fears of Asia Unrest.” But this little story could be an early warning of another big economic problem that’s sneaking up on us.

The new danger is global inflation — most worryingly in food prices, but also in prices for commodities, raw materials and products that require petroleum energy, which includes almost everything. Prices for these goods have been skyrocketing in international markets — at the same time the Federal Reserve and other central banks have been hosing the world with new money in their efforts to avoid a financial crisis.

That’s an explosive mixture. It risks a kind of inflation that would trigger panic buying, hoarding and fears of mass political protest. Actually, this is already happening in Asia, according to the Times.

The price of rice in global markets has nearly doubled in the last three months, reports the Times’s Keith Bradsher.
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Fearing shortages, some major rice producers — including Vietnam, India, Egypt and Cambodia — have sharply limited their rice exports so they can be sure they can feed their own people.

Bradsher summarizes the evidence that food shortages and inflation are fueling political unrest: “Since January, thousands of troops have been deployed in Pakistan to guard trucks carrying wheat and flour. Protests have erupted in Indonesia over soybean shortage, and China has put price controls on cooking oil, grain, meat, milk and eggs. Food riots have erupted in recent months in Guinea, Mauritania, Mexico, Morocco, Senegal, Uzbekistan and Yemen.”

World Bank President Robert Zoellick rang the alarm bell in a speech yesterday. He noted that since 2005, the prices of staples have risen 80 percent. The real price of rice rose to a 19-year high last month, he said, while the real price of wheat hit a 28-year high.

Zoellick warned that this inflation is having political repercussions: “The World Bank Group estimates that 33 countries around the world face potential political and social unrest because of the acute hike in food and energy prices.” To cope with the topsy-turvy economy, Zoellick made an innovative proposal that countries running a surplus, such as Saudi Arabia and China, devote 1 percent of their “sovereign wealth” funds to investment in Africa‘s poor countries. That could yield up to $30 billion in development spending.

Now, cut to the Federal Reserve. At a time when global inflation is raging, you might expect that the central bank’s first priority would be to dampen inflationary expectations in the United States. But because of its worries about a financial meltdown, the Fed has been doing the opposite — drastically cutting interest rates in an effort to unclog the financial markets. The cheap money didn’t stop the Wall Street bank run — it was the Fed’s bold plan to absorb subprime debt that did that — but it may well add fuel to the inflation fire.

Related:
Lowly Rice Grain Impacts Global Economy

Vietnam and India move to limit rice exports

Inflation and Food Shortages?

Read the rest:
http://www.washingtonpost.com/wp-dyn/content/article/2008/04/02/AR2008040202997.html?hpid=opinionsbox1

China to raise export tariffs on steel, other commodities to curb trade surplus

December 26, 2007

Under pressure from the United States and Europe, China said Wednesday that it would introduce export tariffs on some steel products, effective Jan. 1, and increase rates on other items to rein in a record trade surplus and cut energy consumption and pollution.The changes are likely to raise world prices of products for which China is a major supplier, like steel and coke, while further damaging profit margins for Chinese producers.

The Ministry of Finance said China would also remove import duties on alumina, refined copper and coal to smooth the flow of raw materials into the country.

China has come under pressure, notably from Washington, with the United States set to impose new tariffs on Chinese steel pipe imports early next year at the behest of U.S. steel makers.

The European Union, too, is adding its weight. It has begun an inquiry into whether Chinese ….

Read the rest:
http://www.iht.com/articles/2007/12/26/business/duty.php#end_main