David Fuller and Eoin Treacy's Comment of the Day
Category - General

    Sugar industry likely to see record global production of 192m tonnes

    This article from UKRAgroConsult may be of interest to subscribers. Here is a section:

    According to Informa's Agribusiness Intelligence, an industry research and analysis firm, the biggest driver behind the record output this year will be the European Union, India and Thailand.

    Despite this, sugar cane diversion to ethanol production in Brazil means global prices will remain high as the country will produce less sugar in 2018-19.

    Agribusiness Intelligence said that in October, for the first time in more than a year, there was a year-on-year increase in local sales of ethanol of 11% in Brazil. This accelerated to a plus of 16% in the first half of November.

    "The most important reasons for the attractiveness of ethanol versus sugar are: the relatively high price of gasoline at the pump, an advantageous tax structure, recovering fuel demand as the Brazilian economy is moving out of recession and the low sugar price."

    Meanwhile, within the EU, the market is still responding to the scrapping of production quotas for sugar refined from sugar beet, which is creating a huge jump in production. In the EU, 20 million tonnes of sugar will be produced by the end of 2017-18 which is an increase of 3 million tonnes compared to the previous year.

    "This growing trend has not been supported by domestic consumption which has been declining in the EU steadily over the last few years. This will have a direct impact on the trade balance of EU countries, with imports declining and exports could double to as much as 4 million tonnes by the end of 2017-18," the analysis firm added.

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    Supply cuts a 'step change' for uranium price

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    The announcement made by uranium giant Cameco in November that it’s suspending operations at its flagship McArthur River mine in northern Saskatchewan and surprisingly deep three-year cuts by Kazakhstan’s state-owned Kazatomprom provide a "step change" for uranium prices says a new report on the sector from Cantor Fitzgerald equity research.

    On Monday, the world largest producer of uranium, surprised the beleaguered market with a larger than expected cut to production of its own.

    Two weeks ago, Kazakhstan’s state-owned Kazatomprom announced intentions to reduce its output of U3O8 by 20% or 11,000 tonnes (around 28.5m pounds) over the next three years beginning in January 2018. According to the company roughly 4,000 tonnes will be cut in 2018 alone "representing approximately 7.5% of global uranium production for 2018 as forecast by UxC."

    Cameco's shuttering of McArthur River for ten months is expected to reduce production by 13.7m pounds in 2018 translating to a combined 42.3m pounds of expected production that has been removed from the market. In 2018 alone, the reduction will be about 24.1m pounds of U3O8 or about 15% of Cantor Fitzgerald's prior forecast of 158.4m pounds of output.

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    South African Assets Rise as Ramaphosa Wins ANC Leadership Vote

    This article by Paul Wallace for Bloomberg may be of interest to subscribers. Here is a section:

    Improve the education system|
    The plan would get the government to work with teacher unions to improve the quality of schooling, especially in townships and rural areas. Teachers will be given additional training and support. It may be made compulsory for students to study mathematics and science until they complete school. The state would also take steps to provide free tertiary education to the poor.

    Improve the management of state companies|
    State companies must be properly governed, managed and operated for the benefit of the public, and suitable boards and executives with the appropriate skills and experience should be appointed immediately. The firms should consider co-investing with private companies or forming strategic partnerships with them to improve their balance sheets and ability to deliver services. The government will consider forming a company to manage all its investments in state-owned enterprises.

    Clamp down on graft
    A judicial commission of inquiry will be established to investigate allegations that public institutions have been looted and that private companies and individuals have gained undue influence over the state. Law-enforcement agencies will be strengthened and critical state institutions will be rebuilt.

    Officials who have facilitated or been involved in graft will be immediately be removed from their posts and face prosecution. Stolen funds will be recovered and deposited in a special fund that will be used for youth training and employment.

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    Email of the day on what to do with bitcoin

    Retail Industry Meltdown Hits Women Hard; Men Remain Unscathed

    This article by Laura Colby for Bloomberg may be of interest to subscribers. Here it is in full:

    As embattled U.S. retailers shed jobs over the past year, women have borne the brunt of the losses. Men, on the other hand, have made steady gains in the retail workforce.

    Women lost 129,000 retail positions in the last year, according to Bureau of Labor Statistics data analyzed by the Institute for Women’s Policy Research. Men gained 106,000 positions.

    The report found that general-merchandise stores -- mainly department stores -- accounted for the largest share of both jobs lost and jobs gained. Women at those retailers lost 161,000 positions while men gained 87,800 from October 2016 to October 2017.

    At other types of retailers, including auto dealers, garden supply stores and furniture stores, women and men both gained a comparatively small number of jobs.

    Retail employment for both men and women had been growing since 2007, IWPR said. But about a year ago, the trend for women reversed. It’s not clear exactly why, said Heidi Hartmann, president of the IWPR. Women could be moving to higher-paying jobs, or men could be doing better because they tend to sell big-ticket durable goods such as cars and appliances, where sales are strengthening.

    The uneven distribution of job losses could have repercussions for the U.S. economy as a whole, because the vast majority of American families rely on women’s earnings, Hartmann said.

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    Platinum Outshines Palladium on Prospect of Europe Diesel Demand

    This article by Luzi Ann Javier for Bloomberg may be of interest to subscribers. Here is a section:

    “Car sales are one of the strongest indicators of consumption of raw materials,” said Peter Thomas, a senior vice president at Zaner Group in Chicago, citing the one to two ounces of platinum or palladium that goes into each vehicle.

    “You’ve also got a lot of window dressing going on,” with traders selling palladium to book their gains for the year, and buying platinum, he said.

    Palladium, used mostly in pollution-control devices for gasoline engines, has led gains in precious metals this year by climbing 48 percent. It surpassed the price of platinum in September for the first time since 2001. Gold has gained 9.9 percent in 2017, while silver increased 1.4 percent.

    Supply of platinum will trail consumption by 275,000 ounces in 2018, after being largely balanced this year, the World Platinum Investment Council forecast in November. Mine closures in the second half of this year will have a larger impact on production next year, it said.

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    Semiconductors: Technology and Market Primer 10.0

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    Brexit Marathon Passes First Milestone With Hard Yards Ahead

    This article by Tim Ross for Bloomberg may be of interest to subscribers. Here is a section:

    Despite disbelief in Europe, May and her team still publicly insist they can complete all the trade negotiations before Brexit day and have a new trading relationship ready to sign into law the moment the country leaves the bloc. Brexit Secretary David Davis has admitted that he’ll be in a weak position trying to negotiate a trade deal when the U.K. is already outside the bloc.

    In order to meet the March 2019 deadline, the framework of the future relationship needs to be done ideally by October, to allow the European Parliament and the increasingly assertive U.K. lawmakers to have time to ratify the agreement. That leaves seven months to finalize the outline of an ambitious pact.

    A senior EU official, speaking on Friday on condition of anonymity, said the full trade agreement will take years. The U.K. government underestimates the complexity of the trade discussions, the official said. He said that alongside the withdrawal agreement the two sides will issue a joint declaration outlining the principles of the future relationship to be worked on when the U.K. is no longer a member state.

    One major obstacle is that neither side yet knows what it wants the future relationship to look like. May has not even discussed the matter in any depth with her own cabinet ministers. She’ll call them to a meeting next Tuesday to hear their views on the end state, according to her office. It’s unlikely to be the last time they talk about it.

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