NCRI - Some 500 deprived workers of the Haft Tappeh sugar cane factory in Khuzestan Province staged a protest in front of the factory’s entrance on Saturday, October 3, 2009. The workers were protesting against non-payment of salaries over the past two months.

In addition to other legitimate demands, they were also angry over the absence of a regular schedule of payment, fall in wages, and the lack of implementation of a plan that categorizes job roles. Iranian regime officials have placed the sugar industry on the brink of collapse by mismanagement and unbridled sugar imports. In this context, they have used the dire state of the industry as a pretext to cheaply take control over sugar factories under the guise of “privatization.”

Government managers in the sugar cane industry refuse to pay worker salaries and deflect their legitimate demands, resorting to only making false promises. Thousands of workers in the industry are suffering from difficult living conditions to the extent that they cannot even fulfill the basic needs of themselves and their families.

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Although At A Slow Rate Of 1.45%

New Agriculture, Farming & Raw Materials report provides detailed analysis of the Agriculture, Farming & Raw Materials market.

Iranian agriculture has undergone many changes during the last thirty or so years. Since being characterised by low productivity, import dependence from the 1970s through to the mid-'90s, the government has actively sought the creation of a well functioning and self-sufficient sector, not least as a way to diversify a largely fossil fuel reliant economy.

Subsequent incentives and state supports - fuelled largely by oil export revenues - contributed significantly to the development of the sector as we know it today; predominantly commercialised and accountable for roughly 80% of domestically consumed staple foodstuffs. Yet, despite such improvements, a series of caveats to further growth must be overcome.

The latest Iran Agribusiness Report analyses industry dynamics, while looking at these various themes.

High oil prices in recent years have enabled Iran to amass large foreign exchange reserves. However, such increases in overall domestic revenues have failed to ease the level of income disparity and unemployment within the country. In addition, the government's most recent five-year development plan from 2006-2010 - in which agricultural development is a central theme- is seen to be underperforming.

A combination of price controls and subsidies on agricultural exports weighs down the economy, while reported incidences of corruption and inefficiency undermine the potential for the private sector act as a strong engine of economic growth. Consequently, informal market activity flourishes, while stock shortages are common, particularly in the rice and sugar industries, where the state has a significantly stronger presence.

In March 2009, a crowd of disgruntled workers gathered outside the Haft Tapeh sugar grinding factory in response to non-payment for services rendered, in a row that has rumbled on for the best part of a year.

According to sources, workers from the factory have demonstrated roughly 16 times since 2005, despite continued intimidation by state forces, and such destabilising fundamentals serve to hamper the great promise that exists within the industry. We do see sugar production expanding to 2013, although at a slow rate of 1.45% which is way below the level of the previous projection period of 23.35%, yet further unrest among workers may tip the balance into negative growth.

Another major concern for farmers is the drought that has raged through the region for the best part of two years, affecting Iran and neighbouring countries. Grains farmers have been the worst affected, with wheat in particular recording notable year-on-year (y-o-y) losses in 2008, falling by 33% as already scarce water supplies became stretched to the limit. Despite the negative effects of the drought, the upside is that it has strengthened the states resolve to develop irrigation. Domestic area under irrigated cultivation has increased significantly over the last five years, thus helping to improve yields and lessening the severity of some of the negative effects associated with water scarcity. Wheat production should pick up to 2013 as such efforts leads to increased plantings, while greater use of inputs, such as fertiliser, will further augment the government's efforts to ease its staple import burden. As such, we foresee wheat imports playing a smaller role in the domestic food budget during the course of the outlook.

Having said this, the effects of future droughts are unpredictable and provide an ever present risk.

Iranian officials have held talks with other D8 members - most notably Turkey and Pakistan - in order to strengthen trade ties. Turkey represents a particularly high potential trade partner, being self-sufficient in almost all food groups and, more pertinently, some of those goods with which Iran still relies on imports.

This is beneficial in that Turkey's proximity to Iran would allow for food shipments to be relatively easily facilitated, which for a country like Iran, which has alienated a large majority of potential trade partners, is a major bonus.

Notwithstanding greater international co-operation, domestic issues remain the most pertinent concern in helping to fuel sector growth. The state's continual overbearing presence in some subsectors is deemed detrimental to private sector investment. It is believed Iran's ability to fulfil its agricultural promise to 2013 depends largely on its ability to attract outside interests, while potential suitors may become increasingly attracted to investing in agriculture as a more favourable climate develops.

source: officialwire

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SAO PAULO,("Strong Prices Trim Back Brazilian Sugar Trade," published around 17:25 EDT on 06 May 2009, incorrectly reported that India had bought two million tons from Brazil, in the 13th paragraph. India bought two million tons of sugar, of which 600,000 tons came from Brazil. A corrected version of the story follows.)

Robust international sugar prices are discouraging some sugar buyers, although trade remains steady, industry participants said Wednesday.

The ICE Futures U.S. July sugar contract in New York closed up 21 points at 15.36 cents Wednesday amid buying from both funds and speculators.
Wednesday's intraday high of 15.41 cents was the highest level since August 2008.

Industry participants said physical sugar buying has continued during the week, especially from the Middle East, but high sugar prices kept some buyers out of the market.

Stefan Uhlenbrock, a senior commodity analyst at F.O. Licht, said high prices are, for example, leading to slower trade with India.

"This is likely to be a temporary pause and India will need to buy more sugar in the future whether prices go up or down," he said.

Although India will continue to be the big story in the market, having switched from an exporter to an importer, other smaller markets can also provide destinations for Brazil's raw sugar.

Pakistan, Iran and Indonesia also need to buy more sugar and current freight rates make raw sugar shipments to Asia feasible, Uhlenbrock said. Pakistan - with a weak crop this year - has a deficit of between 400,000 metric tons and 700,000 tons of sugar and will need to import, he said.

F.O. Licht expects Brazil to export 26.5 million tons of sugar from the new 2009-10 crop against 21.8 million tons in 2008-09.

Brazil exported 964,400 tons of raw sugar and 335,700 tons of crystal white sugar, or refined sugar, in April compared to 865,200 tons of raw sugar and 432,400 tons of refined sugar in March, according to the Foreign Trade Ministry this week.

Uhlenbrock said the current sugar price of 15 cents per pound is realistic. Prices could continue at this level for the rest of the month, he said.

Despite the high sugar prices, most sugar is finding destinations in places such as the Middle East, said Alex Oliveira, a sugar broker at Newedge USA in New York.
A market analyst at F.C. Stone also said India has a demand for around three million tons of sugar and has already bought around two million tons. Some 600,000 tons were already bought by India from Brazil, according to the market, the analyst said.
Russia is also likely to import around 400,000 tons of raw sugar after changing its import tariffs, she said.

A broker at Uniao Corretora said that, for very high polarization sugar, or VHP, sellers were asking for prices on par with the May contract in New York. Buyers wanted 15 points under the same nearby contract.

No clear buyers emerged this week, with the buyers being evenly spread out, he said.
In the domestic market, Brazilian white sugar sales have slowed with some buyers expecting prices to fall due to a larger cane crop, said the F.C. Stone analyst.
Brazil is the world's No.1 sugar producer.

source: (Dow Jones Commodities News via Comtex)

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The European Union approved stricter clean-air rules for oil companies such as Total SA and BP Plc to supplement new emission curbs on cars and a campaign to boost the use of biofuels.

The EU decided to force the petroleum industry to reduce by 6 percent, over the fuel lifecycle, emissions of gases blamed for global warming by the end of 2020 compared with 2010. The bloc also allowed a greater amount of environmentally friendly ethanol to be used in gasoline and tightened limits on fuel pollutants such as sulfur.

The objective is “ensuring respect for minimum levels of environmental protection,” says the law, endorsed on Monday in Luxembourg by the EU’s 27 national governments. After the European Parliament gave its backing in December, the governments’ approval ends a legislative process that began two years ago and clears the way for publication of the law.

The EU is stepping up the fight against air pollution to counter the risk of environmental catastrophes from global warming and reduce premature deaths from smog. The bloc is lowering caps on factory and power-plant emissions of carbon dioxide, the main greenhouse gas, and tightening limits on tailpipe pollutants including nitrogen oxide.

Energy is the root cause of most air pollution and of climate change, accounting for four-fifths of greenhouse-gas emissions in the EU. The bloc aims to cut greenhouse gases by a fifth in 2020 compared with 1990.

---------------‘Very ambitious’

The new law compels makers of fuel for vehicles to monitor and report greenhouse-gas emissions during the fuel lifecycle including production and use starting in 2011. The related 6 percent emissions-reduction requirement by end-2020 is less than an original proposal by EU regulators for a 10 percent cut.

“The 6 percent target is still very ambitious,” said Isabelle Muller, secretary general of the European Petroleum Industry Association representing companies including Total, BP and Royal Dutch Shell Plc. “Our concern is that we get the right biofuels in the right quantities.”

The target can be reached through the use of biofuels -- made from crops such as rapeseed, corn and sugar -- any other alternative fuels and reductions in flaring and venting at production sites. A planned 2012 review could lead to an extra 2 percent cut obtained through CO2 storage underground and electric vehicles and to a further 2 percent reduction obtained through the purchase of United Nations-backed credits covering flaring and venting reductions in the developing world.

-----------------Gasoline blend

To allow more biofuels in gasoline, the law creates a gasoline blend with a higher permissible oxygenate content, including up to 10 percent ethanol, no later than 2011 compared with 5 percent at present. To protect consumers, it also enables the marketing of the existing gasoline specification with the maximum 5 percent ethanol until 2013.

This complements an EU law requiring at least 10 percent of energy for road and rail transport to come from renewable sources led by biofuels. Both pieces of legislation are part of package that also includes laws curbing CO2 from cars starting in 2012, tightening CO2 caps on factories and power plants in the European emissions-trading system as of 2013 and requiring EU nations to limit greenhouse gases from industries outside the trading system by 2020.

While the fuel-quality legislation was proposed a year earlier than the other laws, all were approved in December by the EU Parliament after a negotiated agreement with national governments. The governments endorsed the whole package on Monday.

The new fuel-quality law also lowers the sulfur content in gas oil for non-road machines such as farm tractors to 10 parts per million from 1,000ppm and for inland-waterway vessels to 10ppm from 1,000ppm by 2011.

The legislation pares the maximum polyaromatic hydrocarbon content in diesel to 8 percent no later than end-2010 from 11 percent and affirms a lowering this year of the limit on sulfur in diesel to 10ppm from 50ppm.

source: tehran times

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With the low price of oil and a global economic crisis eroding Iran's economic growth, some analysts believe the economy will emerge as a political liability for President Mahmoud Ahmadinejad as he seeks reelection in June. This leads some to argue that now is the time for the West to turn up the heat with new sanctions in an attempt to win concessions on Iran's nuclear program. But Djavad Salehi-Isfahani, a professor of economics at Virginia Tech and a former economist at the Central Bank of Iran, says these broad-brush observations miss the subtle realities of Iran's mature, if troubled, economy.

Iran has proven adroit at navigating U.S., UN, and EU sanctions in the past, he says, by seeking alternative buyers for oil and exports. And while Western restrictions on Iranian banks "have apparently had bite," Salehi-Isfahani says "Iran's economy is suffering from bad policies to begin with, and sometimes it is hard to tell what is causing what."

Iran is in the middle of a presidential election campaign. The incumbent, President Mahmoud Ahmadinejad, was elected in 2005 on a populist agenda, and promised to share the country's oil wealth with the masses. But today the president is often criticized for mismanaging the economy. How has he failed?

When oil prices are high, Iran uses its wealth to buy imports, which often compete with goods that are produced inside Iran. While this practice might keep the populace happy with inexpensive products, it also has the potential to put Iranians out of business because they can't undercut the low-cost goods being imported. So the net effect could be negative. In an attempt to bring the oil money to the people's dinner table, as President Ahmadinejad had promised, the guy at the head of the dinner table may lose his job.

This has happened in a couple of instances that people have written about, like textiles. Iran's textile industry has pretty much been wiped out because of cheap [imports], and the sugar industry has suffered hugely because of increased imports of sugar. A lot of farmers [were hurt] because they were producers of the sugar beet, which is the input into the sugar industry. So bringing oil money to people's dinner table is not the best way to spend the oil money. If Ahmadinejad had done more of it, things might have gotten actually worse.

Read full article at www.crf.org

source: crf.org

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