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Global Rice Shortage And How This Agriculture Stock Could Make An Impact

The global commodity markets have weathered a succession of blows these last few years. The  toxic combination of the COVID-19 … Read more

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The global commodity markets have weathered a succession of blows these last few years. The  toxic combination of the COVID-19 pandemic with its mass lockdowns, the Ukraine war, and climate change has affected the availability and prices of both hard and soft commodities. In today’s complex global economy, few commodities exist in isolation from each other, and their availability has knock-on effects across society as a whole.

Most investors are readily familiar with hard commodities like oil, natural gas, and gold. Now, concerns about the supply of soft commodities from the agricultural sector have recently been dominating headlines in the financial press and rousing the interest of traders and investors. Food staples like corn, wheat – and now rice – whose availability we previously took for granted, have become high-profile assets experiencing uncharacteristic price volatility.

The Rice Crisis Overview

Rice is arguably the least well-known soft commodity in the US and Europe. This isn’t surprising given that the traditional cereal food staples in the bread-eating West are wheat, corn, and barley. Many Americans would be surprised to discover that the US is in fact a rice producer with over 3 million acres under production in several Southern states, as well as California. Rice is also used in the commercial manufacture of a number of major American light beer brands.

US and EU rice cultivation is minuscule compared to the major Asian producers who produce 90% of the world’s supplies. Abundant rice harvests are essential for over half the world’s population (an estimated 3.5 billion people) for whom rice is a staple food and a primary source of daily calories. Locally harvested rice is vital for the survival of many rural communities across the Asia-Pacific region, with imported rice playing a major role in food security for dozens of nations in Africa, the Middle East, and South America.

According to a recent CNBC report, we’re now facing the biggest rice shortage in 20 years with a global shortfall of 8.7 million metric tons. This comes at a time when the Ukraine war and Russian export policy are jeopardizing exports of staple cereals while high fertilizer prices are having a negative impact on cereal prices.

These twin staples of human food consumption: bread and rice –  are facing imminent price rises. Rice may be largely overlooked by Western investors, but it accounts for billions of dollars in trading volume on the global commodity markets.

Recent Weather Phenomena Affecting Rice Production

A common image of rice farming is of wet rice paddies in tropical climates. Rice certainly needs plenty of water and a warm climate to flourish. Recent weather events have negatively impacted rice production and extreme weather events are becoming more common. Rice farmers urgently need localized, tech-driven solutions to the challenges of climate change.

  • Heavy monsoon rains and floods in China
  • Severe flooding in Pakistan
  • Frequent droughts in the Lower Mekong Basin

Who Are The World’s Rice Producers?

The United Nations Food and Agriculture Organisation reports that global production of milled rice in 2022/23 stood at 512.4 million tons, down 2.3 million tons from the previous year. The predicted top 5 rice producers for the coming year are:

  1. China – 149,000,000 metric tons
  2. India – 128,500,000 metric tons
  3. Bangladesh  – 35,650,000 metric tons
  4. Indonesia – 34,600,000 metric tons
  5. Vietnam – 27,400,000 metric tons

To gain perspective, the US is expected to produce 5,589,000 metric tons of milled rice this year.

Given that the world’s rice producers are expected to produce a total of over half a billion tons of milled rice this year, a predicted shortfall of just under 9 million metric tons may not seem like a major issue. On the contrary, it has the potential to drive a bull market for rice; with major price increases and competition for supplies.

If consumers spend a higher proportion of their incomes on basic food products, reprioritized consumer household budgets will spend less on non-essential items. These economic ripples will be felt around the world.

Investing In Agriculture In 2023

Traditionally investing in Agricultural stocks was seen as a low-risk/low-return sector that lacked glamor and potential when compared to other sectors or trading commodities.

However, now they are full of potential for investors. The performance of wheat, and now rice, shows that agricultural staples can be as volatile as oil and gold – and just as vital to the global economy. What’s even more captivating about this sector are those companies that specialize in agricultural technology (Agtech) and food technology (Foodtech).

The challenges of climate change, population growth, and geopolitical events like the Ukraine war are driving demand for more efficient and sustainable agriculture. New technologies; 5G internet and the Internet of Things; AI and cloud data; electric vehicles and drones; smart irrigation; advances in fertilizers and energy production are transforming agriculture.

This decade will see a quantum leap in the application of technological solutions to agricultural challenges. The companies that deliver innovative technologies in agricultural products will see an exponential rise in their revenues and net worth. The potential rewards for investors justify a deeper exploration and analysis of agricultural stocks .

ICL – an Agriculture Stock to Watch

As a leading specialty minerals producer, and known to be one of the world’s biggest fertilizer manufacturers, ICL Group (NYSE:ICL) (TLV:ICL) services the food, agricultural and industrial sectors.

The company has held onto its reputation for its commitment to implementing Sustainable Development Goals throughout its business process, an initiative popularized by the United Nations.

The importance of companies and startups in the Agricultural Technology (AgTech) industry has gathered increasing support from private and public shareholders, with several government bodies now throwing their weight behind the improvement of domestic agricultural production, food security, and more sustainable farming methods.

Research by the London-based Juniper Research firm estimates that the value of the AgTech market is estimated to reach more than $22.5 billion by the middle half of the decade. This would be a significant rise from its reported $9 billion market share value in 2020, translating into 150% growth throughout the next several years.

On the back of this expected growth sits ICL, firmly planting itself to provide industry leaders, producers, and manufacturers with appropriate solutions that aim to help improve outdated farming and agricultural practices.

With a global footprint already established in more than 100 countries, with major players in Brazil, China, and India, ICL focuses heavily on the innovation of several agronomic data models through its startup, Agmatix. Furthermore, in recent years, the company established Planet Startup Hub, an accelerator pioneering FoodTech and AgTech innovations, to develop products and services that harness traditional understanding, through the application of modern technology and big data harnessing.

ICL recently launched eqo.x, known to be a first-of-its kind biodegradable release technology that supports the development of sustainable agriculture. Included in their multi-layered business approach, ICL established FuitMag™, a superior sustainable solution for post-harvest citrus fruit preservation.

Similar to many other companies of its size and status, the recent rise in interest in Environmental, Social, and Governance (ESG) investing has led many corporate household names to adjust their approach to attract conscious investors, as they seek new opportunities to build more sustainable portfolios.

ICL has aligned itself as a white-label supporter for the reduction of greenhouse emissions, and water conservation, and helping younger startups develop more environmentally conscious business models that seek to leverage modern technology, while at the same time promoting sustainable agriculture practices.

Earnings And Beating Estimates

ICL’s quarterly earnings were just announced on May 10, 2023 of $0.23 per share, beating many analyst estimates of $0.19 per share. This quarterly report represents an earnings surprise of 21.05%. Last quarter they were expected to post earnings of $0.27 per share when it actually produced earnings of $0.28, delivering a surprise of 3.70%.

Over the last four quarters, ICL has surpassed consensus EPS estimates four times. They posted revenues of $2.1 billion for the quarter ended March 2023, surpassing the estimates by 5.98%. This compares to year-ago revenues of $2.53 billion. ICL has topped consensus revenue estimates four times over the last four quarters.

ICL delivered some excellent YoY results in 2022 and 2023. Its current price at 6.34 (May 16, 2023 close) which is trading slightly above its 52-week low, and its 52-week high was 11.94 , this makes it a very attractive entry point for whoever is considering adding this stock to their portfolio. Many consider the current price to be extremely undervalued. ICL is a company to watch.

In Conclusion

The largest rice shortage in 20 years perfectly illustrates the need for technical innovation in every aspect of agriculture. The agricultural sector is the most durable and dependable market in the world. People may stop buying luxury goods, and reduce their consumption of non-essentials to a bare minimum, but they will always need food.

This is why many inventors add agriculture stocks to their portfolios as a way to shield from market downturns or as they say “crisis-proof” their portfolio. Companies such as ICL Group, producing innovative products for the agriculture industry, are helping to increase crop yields, improve plant quality, and enhance soil fertility.

These solutions are helping make food security a reality for millions of people around the world, and are definitely worth considering in times of a food crisis and rice shortage.

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Von Der Leyen Speech Suggests Russia Dropped Nuke On Hiroshima 

Von Der Leyen Speech Suggests Russia Dropped Nuke On Hiroshima 

Von der Leyen just said what?…

This past Wednesday, President of the European…

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Von Der Leyen Speech Suggests Russia Dropped Nuke On Hiroshima 

Von der Leyen just said what?...

This past Wednesday, President of the European Commission Ursula von der Leyen delivered a speech before the 2023 Atlantic Council Awards in New York, where she sounded the alarm over the specter of nuclear war centered on the Russia-Ukraine conflict. But while invoking remembrance of the some 78,000 civilians killed instantly by the atomic bomb dropped on Hiroshima at the end of WWII, she said her warning comes "especially at a time when Russia threatens to use nuclear weapons once again". She  actually framed the atomic atrocity in a way that made it sound like the Russians did it. Watch:

There was not one single acknowledgement in Von der Leyen's speech that it was in fact the United States which incinerated and maimed hundreds of thousands when it dropped no less that two atomic bombs on Japanese cities.

Here were her precise words, according to an Atlantic Council transcript...

You, dear Prime Minister, showed me the meaning of this proverb during the G7 summit in Japan last year. You brought us to your hometown of Hiroshima, the place where you have your roots and which has deeply shaped your life and leadership. Many of your relatives lost their life when the atomic bomb razed Hiroshima to the ground. You have grown up with the stories of the survivors. And you wanted us to listen to the same stories, to face the past, and learn something about the future.

It was a sobering start to the G7, and one that I will not forget, especially at a time when Russia threatens to use nuclear weapons once again. It is heinous. It is dangerous. And in the shadow of Hiroshima, it is unforgivable

The above video of that segment of the speech gives a better idea of the subtle way she closely associated in her rhetoric the words "once again" with the phrase "shadow of Hiroshima" while focusing on what Russia is doing, to make it sound like it was Moscow behind the past atrocities.

Via dpa

Russian media not only picked up on the woefully misleading comments, but the Kremlin issued a formal rebuke of Von der Leyen's speech as well:

In response to von der Leynen's remarks, Russian Foreign Ministry spokeswoman Maria Zakharova accused the European Commission president of making "no mention whatsoever of the US and its executioners who dropped the bombs on populated Japanese cities."

Zakharova responded on social media, arguing that von der Leyen's assertions on Moscow's supposed intentions to employ nuclear weapons "is despicable and dangerous" and "lies."

Some Russian embassies in various parts of the globe also highlighted the speech on social media, denouncing the "empire of lies" and those Western leaders issuing 'shameful' propaganda and historical revisionism.

Tyler Durden Sun, 09/24/2023 - 13:15

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Saudi Arabia Sentences Schoolgirl To 18 Years In Prison Over Tweets

Saudi Arabia Sentences Schoolgirl To 18 Years In Prison Over Tweets

Via Middle East Eye,

Saudi Arabia has sentenced a secondary schoolgirl…

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Saudi Arabia Sentences Schoolgirl To 18 Years In Prison Over Tweets

Via Middle East Eye,

Saudi Arabia has sentenced a secondary schoolgirl to 18 years in jail and a travel ban for posting tweets in support of political prisoners, according to a rights group.

On Friday, ALQST rights group, which documents human rights abuses in Saudi Arabia, revealed that the Saudi Specialised Criminal Court handed out the sentence in August to 18-year-old Manal al-Gafiri, who was only 17 at the time of her arrest.

Via Reuters

The Saudi judiciary, under the de facto rule of Crown Prince Mohammed bin Salman, has issued several extreme prison sentences over cyber activism and the use of social media for criticising the government.

They include the recent death penalty against Mohammed al-Ghamdi, a retired teacher, for comments made on Twitter and YouTube, and the 34-year sentence of Leeds University doctoral candidate Salma al-Shehab over tweets last year.

The crown prince confirmed Ghamdi's sentence during a wide-ranging interview with Fox News on Wednesday. He blamed it on "bad laws" that he cannot change

"We are not happy with that. We are ashamed of that. But [under] the jury system, you have to follow the laws, and I cannot tell a judge [to] do that and ignore the law, because... that's against the rule of law," he said.

Saudi human rights defenders and lawyers, however, disputed Mohammed bin Salman's allegations and said the crackdown on social media users is correlated with his ascent to power and the introduction of new judicial bodies that have since overseen a crackdown on his critics. 

"He is able, with one word or the stroke of a pen, in seconds, to change the laws if he wants," Taha al-Hajji, a Saudi lawyer and legal consultant with the European Saudi Organisation for Human Rights, told Middle East Eye this week.

According to Joey Shea, Saudi Arabia researcher at Human Rights Watch, Ghamdi was sentenced under a counterterrorism law passed in 2017, shortly after Mohammed bin Salman became crown prince. The law has been criticised for its broad definition of terrorism.

Similarly, two new bodies - the Presidency of State Security and the Public Prosecution Office - were established by royal decrees in the same year.

Rights groups have said that the 2017 overhaul of the kingdom's security apparatus has significantly enabled the repression of Saudi opposition voices, including those of women rights defenders and opposition activists. 

"These violations are new under MBS, and it's ridiculous that he is blaming this on the prosecution when he and senior Saudi authorities wield so much power over the prosecution services and the political apparatus more broadly," Shea said, using a common term for the prince.

Tyler Durden Sun, 09/24/2023 - 11:30

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Biden To Join UAW Picket Line As Strike Expands, Good Luck Getting Repairs

Biden To Join UAW Picket Line As Strike Expands, Good Luck Getting Repairs

Authored by Mike Shedlock via MishTalk.com,

In a symbolic, photo-op…

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Biden To Join UAW Picket Line As Strike Expands, Good Luck Getting Repairs

Authored by Mike Shedlock via MishTalk.com,

In a symbolic, photo-op gesture to win union votes, Biden will head to Michigan for a token visit.

Biden to Walk the Picket Line

Taking Sides

CNN had some Interesting comments on Biden Talking Sides.

Jeremi Suri, a presidential historian and professor at University of Texas at Austin, said he doesn’t believe any president has ever visited a picket line during a strike.

Presidents, including Biden, have previously declined to wade into union disputes to avoid the perception of taking sides on issues where the negotiating parties are often engaged in litigation.

On September 15, the day the strike started, Biden said that the automakers “should go further to ensure record corporate profits mean record contracts for the UAW.”

Some Democratic politicians have been urging Biden to do more. California Rep. Ro Khanna on Monday told CNN’s Vanessa Yurkevich that Biden and other Democrats should join him on the picket line.

“I’d love to see the president out here,” he said, arguing the Democratic Party needs to demonstrate it’s “the party of the working class.”

UAW Announces New Strike Locations

As the strike enters a second week, UAW Announces New Strike Locations

UAW President Shawn Fain called for union members to strike at noon ET Friday at 38 General Motors and Stellantis facilities across 20 states. He said the strike call covers all of GM and Stellantis’ parts distribution facilities.

The strike call notably excludes Ford, the third member of Detroit’s Big Three, suggesting the UAW is more satisfied with the progress it has made on a new contract with that company.

General Motors plants being told to strike are in Pontiac, Belleville, Ypsilanti, Burton, Swartz Creek and Lansing, Michigan; West Chester, Ohio; Aurora, Colorado; Hudson, Wisconsin; Bolingbrook, Illinois; Reno, Nevada; Rancho Cucamonga, California; Roanoke, Texas; Martinsburg, West Virginia; Brandon, Mississippi; Charlotte, North Carolina; Memphis, Tennessee; and Lang Horne, Pennsylvania.

The Stellantis facilities going on strike are in Marysville, Center Line, Warren, Auburn Hills, Romulus and Streetsboro, Michigan; Milwaukee, Wisconsin; Plymouth, Minnesota; Commerce City, Colorado; Naperville, Illinois; Ontario, California; Beaverton, Oregon; Morrow, Georgia; Winchester, Virginia; Carrollton, Texas; Tappan, New York; and Mansfield, Massachusetts.

Contract Negotiations Are Not Close

Good Luck Getting Repairs

Party of the Working Cass, Really?

Let’s discuss the nonsensical notion that Democrats are the party of the “working class”.

Unnecessary stimulus, reckless expansion of social services, student debt cancellation, eviction moratoriums, earned income credits, immigration policy, and forcing higher prices for all, to benefit the few, are geared towards the “unworking class”.

On top of it, Biden wants to take away your gas stove, end charter schools to protect incompetent union teachers, and force you into an EV that you do not want and for which infrastructure is not in place.

All of this increases inflation across the board as do sanctions and clean energy madness.

Exploring the Working Class Idea

If you don’t work and have no income, Biden may make your healthcare cheaper. If you do work, he seeks to take your healthcare options away.

If you want to pay higher prices for cars, give up your gas stove, be forced into an EV, subsidize wind energy then pay more for electricity on top of it, you have a clear choice. If you support those efforts, by all means, please join him on the picket line for a token photo-op (not that you will be able to get within miles for the staged charade).

But if you can think at all, you understand Biden does not support the working class, he supports the unworking class.

Tyler Durden Sun, 09/24/2023 - 10:30

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