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Palm oil gains for the sixth week in a row, and is at its highest level since two months.
Malaysian palm oils futures closed higher on Friday. This was the sixth weekly gain in a row, despite a weak demand for palm oil in major markets. The benchmark contract for palm oil delivery in September on Bursa Derivatives Malaysia Exchange increased 11 ringgit or 0.27% to 4,115 Ringgit ($968.24), the highest closing rate since April 15. This week, the contract increased by 4.79%. Paramalingam Supramaniam said that trading volumes were relatively low and prices had been largely accounted for by most internal and external factors. "For the trend to continue, it will be necessary for more bullish news." Demand will be crucial in July, as the current market rally is based solely on external forces and has yet to demonstrate a robust increase of demand. Palm oil contracts in Dalian gained 0.05%, but the most active soyoil contract grew 0.44%. Chicago Board of Trade soyoil prices rose 1.5%. As palm oil competes to gain a share in the global vegetable oil market, it tracks price changes of competing edible oils. Exports of palm oil products from Malaysia during the period June 1-20 increased between Comparing the same time period from a month earlier. After the White House postponed a decision regarding U.S. involvement with the Israel-Iran Conflict, oil prices dropped, but were on track for a third weekly increase. Palm oil is less appealing as a biodiesel feedstock due to the weaker crude oil futures. The dollar has strengthened by 0.16%, increasing the price of palm for foreign currency holders. The dollar is worth 4.2500 ringgits. (Reporting and editing by Ashley Tang, Sonia Cheema, and Shreya Biwas).
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Finance Ministry: Russian energy, transportation, and finance companies are among the candidates for privatisation
The Russian state-owned energy, transport, and financial sectors are among those that will be privatised, said Finance Minister Anton Siluanov on Friday as Moscow sought to raise money for the federal government budget. Moscow, shunned since the start of the Ukraine conflict by Western capital, has sought ways to increase domestic private investment and economic efficiency, as well as, ultimately, boost budget revenues, given that Russia is spending heavily on the war. Siluanov, at the St Petersburg International Economic Forum, said on Friday, "It's a very delicate topic right now. But I can tell you that it's energy, finance and transport." Siluanov stated that "we are interested in attracting money to develop companies." "There are difficulties in financing large companies' investment programmes." Since months, officials have teased the market by teasing it with hints as to which companies might be potential candidates for privatisation. In 2010, under the reformist Alexei Kudrin's leadership, the Finance Ministry launched a multiyear campaign of privatisation to dispose state assets. However, the plan ultimately failed. In 2010, the state sold a stake to oil giant Rosneft. Siluanov proposed reviving the dormant drive for privatisation in late 2023. He submitted a list 30 names of companies to the government as part of a proposal where the state would retain control stakes. The ministry announced in March that the sale of shares to seven large companies would generate up to 300 billion rubles ($3.8 billion) next year for the budget. A number of major Russian companies have complained about the prohibitive costs of borrowing with interest rates of 20%. Elvira Nabullina, Governor of the Central Bank, said that preparing state-owned firms for initial public offering (IPOs), would require serious planning. In the past few years, Russia has also had difficulty attracting investment. Western companies have withdrawn funds while investors from friendly countries to Moscow are not picking up the slack.
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Ministry: Armed men on motorbikes killed 34 Niger soldiers
The Defence Ministry reported that several hundred armed men, including many riding motorbikes, attacked an army base in Niger near the Mali border, killing at least 34 soldiers and wounding 14 others. According to a statement read on state television, the attackers -- described by the ministry as "mercenaries," used eight vehicles and over 200 motorbikes during the raid at the Bani-bangou base on Thursday. The group responsible was not named. Niger, along with other countries of West Africa's Sahel, are fighting islamist militants tied to al Qaeda or Islamic State. The ministry did not go into detail about the attack but said that troops carried out air and ground searches to secure the area. (Reporting and writing by Moussa Aksar, Ayen Deng Bior; editing by Andrew Heavens).
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Oil prices fall, but stocks rise after Trump's Middle East pause
The stock markets rose on Friday, while oil was close to its largest daily decline since April as President Donald Trump delayed a decision about U.S. involvement in the Israel/Iran conflict. This week, the Middle East has again been a major factor in the top world indexes. All of Europe's major bourses rose between 0.5% and 1% following similar gains in Asia. However, it was still up for grabs whether this would be enough to stop MSCI's world index from suffering a second consecutive weekly loss. Israel bombed Iranian targets and Iran fired missiles against Israel overnight, as the war that began a week ago continued. However, Friday's market movements, which included a slight drop in the US dollar, revealed reassurance. The White House's announcement on Thursday that Trump would decide whether to get the U.S. involved in the war in two weeks, rather than immediately, was the main factor. The European Foreign Ministers will meet with their Iranian counterpart at Geneva on Friday to try to find a diplomatic solution to the dispute over Iran's nuclear program. Oil prices dropped to $76.10 a barrel when the U.S. decided not to enter the conflict. They were still at $77.10 a barrel last, but up 4% on the week and 22% for the month. Derek Halpenny, MUFG's strategist, said: "Brent crude has fallen 2.5% today as a clear sign that concerns over escalating tensions between Israel and Iran have eased." The price of gold, a traditional safe haven for traders, also fell on Friday, although Nasdaq futures, S&P500, and Dow Futures all ended the day in the red, after the U.S. market had closed on Thursday. Asian shares gained 0.5% over night thanks to a 1.2% increase in Hong Kong's Hang Seng. The stimulus plans of newly elected president Lee Jae Myung also saw South Korea's Kospi surpass 3,000 points for first time since 2022. China's central banks kept its benchmark lending rates unchanged as was widely expected in Beijing. Meanwhile, data from Japan revealed that core inflation in Japan hit a 2-year high in may, putting pressure on the Bank of Japan. This in turn lifted yens and drove down Nikkei, the heavily export-driven stock in Tokyo. OIL RETREATS The dollar ended an otherwise positive weekend lower than the previous day. The euro was up 0.3% to $1.1527, and the pound was 0.2% higher to $1.3494. The U.S. Bond market, which also was closed on Thursday, resumed its trading, with the 10-year Treasury yield at 4.39%. German 10-year yields, which are Europe's benchmark borrowing rate, dropped 2.5 basis points to 2.49 percent. Gold prices fell 0.5%, to $3,354 per ounce. However, they were still set for a loss of 2.3% on a weekly basis. The main focus of the commodity markets remained oil. Brent crude futures in London were down by $1.60 or 2.2% at $77.28 per barrel, but they are still on course to finish the week with a 4% gain. PVM analyst John Evans stated that the biggest market risk from the Middle East turmoil was "unintended actions which escalate the conflict and touch upon oil infrastructure". He said that the world had more than enough oil for 2025. However, he warned against the worst-case scenario, which would see 20 million barrels per day blocked on the Arabian Seas, no matter how briefly.
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The corporate agreement that protects the Amazon from soy agriculture is starting to crack
Brazilian soy farmers have been pushing deeper into the Amazon rainforest in order to plant more crops. This puts pressure on an historic deal signed 20 years ago that was meant to slow down deforestation. A loophole exists in the Amazon Soy Moratorium. This voluntary agreement was signed in 2006 by the top grain traders of the world that they would no longer buy soy produced on deforested land after 2008. Moratorium The law protects the old-growth forest that has not been previously cleared. However, it excludes other types of vegetation or forests that have grown back on land that was cleared in the past, also known as secondary forests. Farmers can plant soy on this land without violating the Moratorium's terms. They could even sell it as being deforestation free. The latest official annual report, which covers crop year 2022-2023 showed that the soy planted in virgin forests has nearly tripled from 2018 to 2023. This amounts to 250,000 hectares or 3.4% of the total soy grown in the Amazon. The study is only limited to those municipalities which grow more than 5,000 hectares soy. Xiaopeng Song is a professor in the Department of Geographical Sciences at the University of Maryland. He has been tracking the expansion of soybeans over the last two decades and found that the forest loss was more than four-times as high. Satellite data that he exclusively analyzed for shows that 16% or 1.04 million hectares of Brazilian Amazon land is under production for soybeans. This includes areas where trees were cleared since 2008, which was the date set in the Moratorium. Song said, "I'd like to see secondary forests and recovered forests included in the Moratorium." It creates loopholes, if we limit it only to primary forests. Abiove overseeing the Moratorium on deforestation said in a press release that the agreement is intended to curb the destruction of old growth forests, while other methods have broader criteria which could lead to "inflated" interpretations. Abiove refused to provide granular information, so it was impossible to compare the two. The data in the Moratorium Report comes from Brazil's National Institute of Space Research. Its assessments are internationally recognized and independently monitored. Abiove confirmed that it knew some soy had been planted in areas where the regrown forest had been cut. The difference in how a forest is defined has huge implications on conservation. Climate change-driven deforestation, heat and drought are bringing the rainforest to a tippingpoint beyond which its irreversible transformation begins. Scientists are calling for an end to deforestation and increased efforts in reforestation. Viola Heinrich is a postdoctoral researcher with the GFZ Helmholtz Centre for Geosciences who has studied extensively secondary forests in Amazon. She said that these are "crucial" to limiting global climate change, even if they were initially less biodiverse. We cannot achieve our goals Paris Agreement "We cannot increase the carbon sink without increasing ecosystems' regeneration." She said. Carbon storage and absorption Secondary forests store less carbon than old-growth trees, but they absorb it faster. 'STOLEN AGAIN' Farmers were clearing land on a hot afternoon in late 2012, near Santarem. Santarem is a port town by the Amazon River. The stacked felled trees, which were ready to be burned, were neatly arranged in rows. Satellite images revealed that some of the trees were over 30 years old and part of an abandoned secondary forest, which was once cleared to make room for cattle. Gilson Rego of the Pastoral Land Commission (a church-affiliated organization that works with locals who are affected by deforestation) pointed out areas in which soy was planted. Rego has seen the area dedicated to crops grow in the last five year. More than a dozen farmers, both subsistence and soy producers, who were interviewed said that the Cargill terminal nearby was the most attractive because it reduced logistics costs. Cargill has not responded to requests for comments. Brazil is set to surpass the United States as the largest soy exporter in the world by 2020. Around two thirds is shipped to China. Cofco, the largest buyer in China, has committed to the Moratorium. It is almost exclusively used to fatten livestock for meat production. Song estimates that if the Moratorium had not been implemented and conservation efforts were not undertaken, an additional 6,000,000 hectares would have been lost in the Brazilian rainforest to soy, based on the rate of expansion. He said that Bolivia was a hotspot for deforestation. Brazilian farmers have been against the Moratorium for years. They complain that even small amounts of deforestation will cause traders to refuse purchases from whole farms. Abiove has considered changing this policy. At the moment, thousands of properties covering 10% of the footprint of soy in this region are blocked. Adelino Avelino noimann, vice president of Para state's soy farmers association, located in Santarem, said that the soy boom created opportunities for a country in poverty. Noimann said, "It is unfair that other countries could deforest or grow while we are stifled by laws not even our own." LEGAL ATTACKS Farming organizations allied with right wing politicians, a once fringe movement, launched lawsuits and legislation attacks against the Moratorium, in Brasilia and half a dozen agricultural states. They sought to weaken the provisions. A justice of Brazil's Supreme Court announced at the end of April that it would allow Mato Grosso to remove tax incentives for signatories to the Moratorium. The full court must still confirm the ruling. Andre Nassar has hinted at the possibility of a weakening of the rules in order to appease the farmers. Nassar, in April, told Senators that the solution was not to end the Moratorium. "Something must be done." ADM, Bunge Cargill Cofco, Louis Dreyfus Company, and other global traders signed the agreement in 2006. Abiove, the grain traders that it represents, have refused to discuss details publicly. However, Greenpeace which has been involved in some discussions and is part of Abiove's group, stated last year that traders were pushing to weaken this agreement behind closed doors. Even with its flaws, environmentalists such as Andre Guimaraes - an executive director of IPAM, a nonprofit organization that monitors the accord - said it was still important. He said, "We continue to see the expansion in soy in Amazon." But it could have been worse. Environmentalists say that loopholes should be closed to strengthen the law. Para is a place where farmers have been moving from all over the country. This includes the heartland of soy, Mato Grosso. Edno Cortezia is the president of the local farmer's union. He said that the farmers can harvest soy, wheat, and corn on the same plot within a year. In the municipality of Belterra, near Santarem only a cemetery and a school were spared from soy expansion. Raimundo Edilberto Sousa Freitas (the principal) showed court documents and supporting evidence in two cases where 80 children and teachers displayed symptoms of pesticide poisoning last year. The records show that a farmer was fined later, but the crop continues claiming more area each year. The last remnants of the once lush biome are a few large trees, protected by law, that remain in the soy fields. (Reporting and editing by Manuela Andréoni, Brad Haynes, and Claudia Parsons; Additional reporting by Ana Mano, Sao Paulo)
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Copper falls to a one-week low due to geopolitical and tariff uncertainty
The copper price fell for the fourth consecutive session on Friday, and reached its lowest level in a full week due to uncertainty about the Middle East and U.S. Tariffs. The London Metal Exchange's three-month copper was down by 0.1% to $9,604 per metric tonne at 0905 GMT. It had hit its lowest level since June 13, at $9.558.50. "We have geopolitical uncertainties in the background, although there is a reprieve in that regard in that Trump may want to give a bit more space for diplomacy," Nitesh Shah, commodity strategist at WisdomTree. The White House announced on Thursday that U.S. president Donald Trump would decide within the next two week whether or not the U.S. would get involved in Israel-Iran's air war. "But there are still all these trade concerns, which have perhaps become secondary over the past week." The 90-day suspension of Liberation Day tariffs is not far away. On July 8, the 90-day pause on Trump's most broad "reciprocal tariffs" will come to an end. The Shanghai Futures Exchange's most traded copper contract fell 0.6% to $10,855.31 per ton. An analyst in Shanghai at a futures company said that investors are concerned not only about the Middle East but also U.S. and Chinese interest rates. Data on Wednesday revealed that China's refined output of copper in May increased 13.6% over the previous year, to 1,25 million metric tonnes. The country's demand, however, for metals like copper and aluminum, has been muted due to the summer season's weakness. U.S. Comex Copper Futures fell 1.3% to $4.79 per lb. This brings the premium of Comex to LME copper down to $961 per ton from $1,043 the previous session. Other metals saw a slight decline in aluminium LME, which fell by 0.1% at $2,518.50. Nickel dropped by 0.8% to $14.930. Zinc slipped 0.1% down to $2.639; lead fell 0.7% to 1,978.50. Tin gained 0.9%, reaching $32,285. Click here to read the latest news in metals
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ArcelorMittal abandons plans to produce green steel in Germany because of high energy costs
ArcelorMittal said that the energy costs in Germany were too high to allow it to convert its two German plants to carbon-neutral production. The German industrial sector is still suffering from the shock of losing the Russian gas which had been powering its factories for decades. This decision also calls into question the green hydrogen policy launched by the former government. The government hoped that the subsidies would encourage ArcelorMittal's existing plants in Bremen, in the north, and Eisenhuettenstadt, in the east, to convert to furnaces that are fired by hydrogen. Hydrogen can be produced from renewable electricity. The steelmaker stated that it decided to not proceed with its plans due to the high energy costs in Germany and the uncertainty surrounding the future energy mix. The first electric arc forges will be built in countries with competitive and predictable electricity supply, it stated. It highlighted a recent investment into a forge powered by electricity in France. It said that "electricity prices in Germany were high by international standards as well as compared to neighboring countries." The steel industry of Europe was also affected because so many consumers imported electricity instead of buying it from local producers. The German Economy Ministry regretted the decision of the company. The important thing to remember is that there has been no payment yet. In an email, a spokesperson for the ministry said that "no money needs to be reclaimed". Germany approved a total of 6.9 billion euro in subsidies for steelmaking projects to further its climate goals. This includes the amount for the now dropped Arcelor project. The ministry spokesperson confirmed that three other projects - owned by Salzgitter Flachstahl (TKSE), Thyssenkrupp Steel Europe and Stahl-Holding-Saar - are still in progress. Germany is building rapidly renewable electricity networks. However, the transition away from Russian gas, which has been a long and painful process, has proved to be lengthy and costly, despite the generous subsidies offered to industries who rely on gas to switch over to hydrogen. The conservative-led coalition government, which took office in this year, has criticised the left-leaning previous government's strategy on energy but so far hasn't outlined a radical new approach. Geert van poelvoorde, ArcelorMittal Europe's head of Europe, said: "The European steel sector is under unprecedented pressure in order to maintain its competitiveness." "And this is before decarbonisation costs." He called on the European Commission (EC) to limit imports of certain types of steel to Europe. The competition from abroad, he said, was the biggest problem facing the industry. Reporting by Thomas Escritt, Christian Kraemer and Tomaszjanowski; Editing Jamie Freed & Tomaszjanowski
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What is the risk of nuclear contamination from Israel's attack on Iran?
Experts say that Israel's attacks on Iran's nucleonic installations have so far only posed limited contamination risks. They warn, however, that an attack on Iran's Bushehr nuclear power plant could lead to a nuclear catastrophe. Israel claims it wants to prevent a nuclear catastrophe in the region, which is home to millions of people as well as producing much of the world’s oil. It is determined to destroy Iran’s nuclear capability in its military campaign. Israel's military announced that it had hit a Bushehr site on the Gulf Coast, home to Iran’s only nuclear power plant. But later they said the announcement was an error. What has Israel done so far? Israel has declared attacks on nuclear sites at Natanz, Isfahan and Arak, as well as Tehran. Israel claims it wants to prevent Iran from building an atom-bomb. Iran has denied ever having sought one. IAEA, the international nuclear watchdog, has reported damage at the Natanz uranium plant, the Isfahan nuclear complex, including the Uranium Conversion Facility and the centrifuge production plants in Karaj, Tehran and Karaj. Israel has also targeted Arak, which is also known as Khondab. IAEA reported that Israeli military strikes damaged nearby heavy water plant and the Khondab Heavy Water Research Reactor which was still under construction and not yet operational. IAEA stated that the reactor was not operational, and did not contain any nuclear material. Therefore, there were no radiological impacts. IAEA updated its assessment of the site on Friday and said that key buildings were damaged. The heavy-water reactors are capable of producing plutonium that, along with enriched uranium can be used in the production of an atom bomb. What are the risks of these strikes? Peter Bryant, professor of radiation protection science at the University of Liverpool, England, who specializes in nuclear energy policy and radiation protection, has said that he's not concerned with the fallout risk from the strikes. He pointed out that the Arak facility was not in operation while the Natanz site was underground. No radiation leakage was reported. He said that the issue was controlling what happened in that facility. Nuclear facilities were designed to do that. He said that uranium is only dangerous when it's inhaled, ingested, or gets into your body. Darya Dolzikova is a senior researcher at London's think tank RUSI. She said that attacks on the facilities at the front of the nuclear fuel chain - where uranium gets prepared to be used in a reactor -- pose chemical risks, and not radiological ones. UF6, or uranium hexafluoride is the main concern at enrichment plants. She said that when UF6 reacts with the water vapour in air, it creates harmful chemicals. She added that the weather will affect how much material disperses. In low wind, material is likely to settle near the facility. In high wind, material will travel further, but also disperse widely. Underground facilities have a lower risk of dispersal. Simon Bennett, the head of the civil safety unit at the University of Leicester, UK, stated that the risks to the environment are minimal if Israel strikes subterranean installations because "you're burying nuclear materials in thousands of tons of concrete, rock, and earth". What about nuclear reactants? A strike on Iran’s Bushehr nuclear reactor would be of major concern. Richard Wakeford is Honorary Professor of Epidemiology, University of Manchester. He said that while the contamination of the area surrounding enrichment plants would "mainly be a chemical issue", the extensive damage of large power reactors was "a different story". He added that radioactive elements could be released into the ocean or through a plume containing volatile materials. James Acton, director of the Nuclear Policy Program for the Carnegie Endowment for International Peace said that an attack on Bushehr could "cause an absolute radiological disaster", but that an attack on enrichment plants was "unlikely" to have significant off-site effects. He said that uranium is barely radioactive before it enters a nuclear reactor. "The chemical uranium is hexafluoride, which is toxic but doesn't travel far and has a low radioactivity," he said. "Israel's attacks so far have had virtually no radiological effects," he said, while expressing his opposition to Israel. Bennett of the University of Leicester stated that it would be "foolhardy" for Israel to attack Bushehr, because they could pierce and release radioactive material in the atmosphere. Why are Gulf States particularly concerned? The Gulf States' impact on any attack on Bushehr will be worsened if the Gulf waters are contaminated, putting at risk a vital source of desalinated water. According to the authorities, in the UAE, more than 80% drinking water is desalinated, and Bahrain has become fully dependent on desalinated waters since 2016. 100% of groundwater was reserved for contingency planning. Qatar is completely dependent on desalinated drinking water. According to the General Authority for Statistics, in Saudi Arabia, which is a larger country with more natural groundwater reserves, 50% of water supplies will be desalinated by 2023. Some Gulf States, such as Saudi Arabia, Oman, and the United Arab Emirates, have access to multiple seas to draw their water, but countries like Qatar and Bahrain are congested along the Gulf shoreline with no other coastline. If a natural catastrophe, an oil spill or even a targeted assault were to disrupt a water desalination facility, hundreds of thousands would lose their access to freshwater instantly, said Nidal Ilal, Professor and Director of the Water Research Center at New York University Abu Dhabi. He said that coastal desalination plants were particularly vulnerable to regional hazards such as oil spills and nuclear contamination.
Brent falls as Trump considers military action against Iran
Asian shares rose on Friday, as investors were relieved that the threat of an imminent U.S. strike on Iran had been averted for the time being. This weighed on Brent oil and dollar prices.
Israel has bombed Iranian nuclear targets overnight, while Iran has fired missiles and drones towards Israel. The war, which began a week ago, is intensifying, with neither side showing any signs of an end.
The White House announced that President Donald Trump would decide within the next two week whether or not the U.S. is going to get involved in Israel-Iran conflict. Some of the MAGA base is expressing concern about a possible attack on Iran, which could lead to another long-term war.
Brent fell by 2.1% to $77.23 a barrel on Friday, but it is still heading for a gain of 4% per week, after a surge of almost 12% the previous weekend.
The lower oil prices have caused European stocks to rise, with the EUROSTOXX futures rising by 0.8% and the FTSE Futures up by 0.3%.
Yesterday, Trump said he would consider a strike on Iran in the next few days. White House comments overnight... now indicate that the decision will be made within weeks," Rodrigo Catril said, senior FX Strategist at National Australia Bank.
The price action suggests that investors are still very nervous.
In Asia, Nasdaq and S&P futures both fell by 0.2%. U.S. market were closed on Juneteenth, so there was little direction in Asia.
Hang Seng in Hong Kong led the way with a jump of 1.2%. The index is down 0.4% this week.
South Korea's benchmark share price also performed better than the market with an increase of 1.1%. It surpassed the 3,000 mark for the first since early 2022 after the newly elected president Lee Jae Myung unveiled a stimulus plan.
Nikkei 225 in Japan was flat.
China's central banks held their benchmark lending rates at the same level as expected on Friday, while Japan reported that core inflation reached a two-year peak in May. This data keeps pressure on Bank of Japan for them to increase interest rates.
Investors are not expecting a rate increase from the BOJ before December of this year. This is about 50% priced in.
The dollar is expected to gain 0.5% per week on the currency market.
The euro rose by 0.3% to $1.1527 while the pound increased by 0.2% to £1.3494.
In Asian hours, the U.S. Bond market, which had also been closed on Thursday morning, began trading on a subdued tone. The yield on the 10-year Treasury bond was unchanged at 4.3909%. Two-year yields dropped 1 basis point to 3.9289%.
The Swiss National Bank has cut its rates overnight to zero, and is not ruling out going negative. Meanwhile, the Bank of England kept policy unchanged but felt the need for more easing. And Norway's central banks surprised everyone by cutting rates for the very first time since 2020.
Gold prices fell 0.5%, to $3354 per ounce. However, they were still set for a loss of 2.3% on a weekly basis.
(source: Reuters)