UN economist warns Russia-Ukraine tensions could push world grain markets to the edge
Current tensions between Russia and Ukraine are expected to have a negative impact on global grain markets, as both countries are among the world’s largest grain producers. However, it’s currently difficult to assess the scale of potential damage as food prices depend on a range of factors, according to Monika Tothova, an economist with the Food and Agriculture Organization of the United Nations (FAO).
“Taking into account the input of both nations into the world market of grain, the tensions between them inevitably influence the situation,” the economist said in an interview with TASS.
According to Tothova, the markets are also deeply dependent on such factors as volatility, climate conditions, costs of production materials, and many others.
“Thus, it is difficult to say exactly what impact we should expect, but certainly the current situation contributes to creating uncertainty in the markets,” Tothova said.
The economist added that much depends on how long the current situation could last and the way it could unwind.
“If further developments affect production, export logistics and other effects on grain markets will be very tangible,” she said.
The economist noted that Russian grain exports currently account for 20% of the global market, while Ukrainian grain currently accounts for around 10%. Nearly 10% of global grain output is produced in Russia, while Ukrainian production amounts to 3% of the world’s output.
A wide range of Western media outlets, along with multiple US officials, have been speculating about an imminent Russian invasion of Ukraine since November 2021. The White House and some US allies threatened the Kremlin with a new round of ‘crippling’ sanctions in the event of a military assault, citing the movement of Russian troops within the country’s vast western territory as evidence of such a plan. Moscow has consistently rejected the accusations, saying it has a right to carry out military maneuvers as it pleases within its own borders.
Domestic output currently meets 47% of nation’s gas demand, industry association says
The UK could become much more vulnerable to price shocks and geopolitical events unless new offshore fields are approved and developed—and the UK’s gas production could plummet by 75% by 2030, the offshore energy industry body OGUK said on Thursday.
Without new investment in new gas fields in the North Sea, the UK will be left more vulnerable to crisis, such as the current one between Russia and Ukraine, the industry association noted.
Additional price shocks would add to the ongoing energy crisis in the UK where gas and power suppliers are going bust, while customers face a cost-of-living crisis when the energy market regulator Ofgem raises the price cap on energy bills as of April 1. The worst is yet to come for consumers in April, when millions of households would be thrown into energy poverty, with many people having to choose between eating and heating.
Domestic production currently meets 47% of the UK’s gas demand, 31% comes from pipeline imports from Europe, mostly from Norway, and 21% from LNG imports. In 2020, Russia supplied 3.4% of the UK’s gas, OGUK said.
According to the industry body, new fields are needed in the UK North Sea to stave off a predicted 75-percent plunge in domestic supplies if no new fields are approved. Many fields remain to be tapped, according to geological surveys. Such fields are estimated to contain oil and gas equivalent to 10-20 billion barrels of oil—enough to sustain production for 10-20 years, OGUK said.
“In the longer term, if UK gas production is allowed to fall as predicted, then our energy supplies will become ever more vulnerable to global events over which we have no control – as we now see happening with Russia’s threatened invasion of Ukraine,” OGUK Energy Policy Manager Will Webster said on Thursday.
New sanctions to be prepared in case the alleged ‘Russian invasion’ in Ukraine happens, Britain’s Foreign Secretary says
The British government is expected to introduce new legislation to expand the scope of sanctions London can apply to Russia in the event of a hypothetical war with Ukraine, according to UK Foreign Secretary Liz Truss.
“What the legislation enables us to do is hit a much wider variety of targets. So there can be nobody who thinks that they will be immune to those sanctions,” Truss said in an interview with Sky News.
The secretary has previously refused to rule out probable personal sanctions against Russia’s President Vladimir Putin if Russia were to invade Ukraine.
The US, along with several Western allies including Britain, has threatened to announce a wide range of new financial and economic sanctions against Moscow. The threats of crippling penalties have been voiced since November, when Washington raised the issue of Russia’s probable military assault in Ukraine for the first time. Since then, the speculation has been persistently fueled and spread by Western media outlets as well as by European officials.
“Any company of interest to the Kremlin and the regime in Russia would be able to be targeted so there will be nowhere to hide for Putin’s oligarchs, for Russian companies involved in propping up the Russian state,” Truss, who is expected to visit both Ukraine and Russia in the coming weeks, explained.
“Nothing is off the table,” she said, when asked whether the new legislation could allow seizing property in London.
The official rhetoric on new sanctions comes amid global hype over Moscow’s recent amassing of troops in its regions bordering neighboring Ukraine, which has been treated by the US and the allies as evidence of Russia’s aggression towards Kiev and a preparation for an invasion.
The Kremlin, however, has repeatedly stressed that no such intentions exist and that movement of a country’s troops within its borders should not concern outsiders.
On Saturday, the UK authorities said it was considering making a major NATO deployment as part of a plan to strengthen Europe’s borders in response to the massing of Russian troops.
Meanwhile, Britain has provided lethal weapons to Ukraine to help it defend itself, as well as a small number of military personnel to provide training.
According to Truss, however, it is “very unlikely” British combat troops would be sent to fight in Ukraine.
Rock legends yanked their songs from streaming service after accusing Rogan of spreading misinformation on Covid-19 vaccines in his podcast
The market capitalization of streaming services provider Spotify dropped some $2.1 billion within three days after folk-rock legends Neil Young and Joni Mitchell voiced their protest against its most popular podcast ‘The Joe Rogan Experience’ demanding to delete the show from the streaming platform over spreading fake pandemic information.
The outcry came in response to Rogan’s December 31 program featuring Robert Malone, a doctor and the “inventor” of mRNA vaccines. Malone had earlier been banned from Twitter for circulating anti-vaccine misinformation, while YouTube deleted a recording of the Rogan podcast shortly after it was uploaded to the website by a third party.
“I want you to let Spotify know immediately TODAY that I want all my music off their platform. They can have [Joe] Rogan or Young. Not both,” Young posted, in a since-deleted message to his management team and record label.
The audio-streaming giant took down the songs of the folk-rock star, who had 2.4 million followers and over six million monthly listeners on Spotify.
Joni Mitchell, a Canadian-born songwriter who rose to acclaim in the folk-rock scene in the late 1960s and 1970s, announced she would join Young’s effort, becoming the first prominent musician supporting the move.
“Irresponsible people are spreading lies that are costing people their lives,” Mitchell said Friday, in a message posted on her website. “I stand in solidarity with Neil Young andthe global scientific and medical communities on this issue.”
Spotify reportedly paid $100 million for rights to The Joe Rogan Experience podcast in 2020. The program is the top podcast on Spotify, and is reportedly downloaded almost 200 million times a month.
Shares in Spotify declined 6% in three days through January 28. They have dropped 25% since January 1, washing $2.1 billion from its market cap. The company’s stock grew to $173 per share at the end of last week, but plummeted again, after Mitchell joined the protest.
The decline was exacerbated after music-streaming platforms Apple Music and Tidal voiced their support for Neil Young’s music. Young’s songs will now be streamed exclusively on SiriusXM and, amid the furor, the rocker’s greatest hits album rocketed into the top five on Apple Music.
Last month, 270 scientists and medical professionals sent Spotify an open letter, calling for a rapid adoption of a misinformation policy after an episode of The Joe Rogan Experience’ promoted what they said were “baseless conspiracy theories” about the pandemic.
Spotify is the number one audio-streaming service in the US, capturing 31% of total subscribers in the country, followed by Apple Music at 15%, Amazon Music and Tencent tied at 13%, while YouTube Music rounds out the top five at 8%.
Since digital media continues its rapid growth, the latest scandal may go unnoticed against the background of Spotify’s commercial success. The company’s paid subscription streaming revenues increased by 18.5% in 2020. That number is widely expected to come in even higher for 2021, according to IFPI’s latest Global Music Report.
The effects of similar controversies on Netflix, which faced outrage in 2020 over the controversial ‘Cuties’ series and over Dave Chappelle’s comedy special, had a negligible impact on its stock.
Storage facilities in Europe are more than half-empty, data shows
Gas reserves in Europe nosedived to historically low levels this month. According to data by Gas Infrastructure Europe, consumption from storage facilities this January is one third more than the average for the previous five years.
Experts have been raising concerns about the risk of full supply disruption to the EU if tensions between Moscow and Kiev escalate. The European Union receives roughly 40% of its gas via Russian pipelines, several of which run through Ukraine.
Statistics showed that storage facilities were 39.65% full of gas as of January 27. This is the first time that inventories dropped below the 40% mark. The level is 15.6 percentage points below the five-year average.
Typically, Europe’s gas inventories don’t fall even to half until about early-to-mid February. During some mild winters, the inventories don’t sink below midpoint until early March.
This month, the weather was very mild in Europe, but stockholders decided to use reserves to protect against high prices. In many contracts with suppliers, an exchange index “for a month ahead” is used, and now the price of its execution is at an all-time high. On average, gas was traded at $1,310 per thousand cubic meters last month at the TTF hub, with a maximum value of up to $2,138. Under such conditions, buying gas on the spot market at $976 per thousand cubic meters on average looks like a good solution, experts say.
The defensive behavior of importers has also seriously reduced the physical import of gas to Europe. In the first half of January, Gazprom’s exports to non-CIS countries fell by 40%. However, analysts note that export volumes may change as early as February as prices stabilize.
According to the experts, the arrival of liquefied natural gas (LNG) cargos in Europe has alleviated the energy crunch. Last week, Europe’s gas transportation system received approximately 434 million cubic meters, a record for that date.
