Latest News
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Vietnam to offer online gold trading as it permits private imports
Vietnam is planning to open a gold online exchange, allowing companies to import gold, for the first decade, starting next month. This will be part of efforts to stabilize domestic prices which are increasing at an alarming rate. Local economists say the move is intended to balance gold supply and demand. It could also be used to mobilize private resources in order to boost economic growth. State media quoted a central banking official on Thursday as saying that the State Bank of Vietnam is studying international experiences to set up the exchange. According to a report in the Dan Tri, the deputy governor of the SBV, Pham Quang Dug, said that the central bank would also consider trading gold at the Mercantile Exchange of Vietnam, or in a future international financial centre. Academics warn that rapid credit growth could cause asset price bubbles in the Southeast Asian nation, which is one of fastest-growing economies in the region. The central bank also tries to stabilize the price of domestic gold, which is a popular choice for investment and is considered an important tool for wealth preservation in Vietnam. In spite of efforts made last year to increase supplies through auctions and commercial bankers, domestic prices are up 60% this year and, as of Thursday, remain around 23% above the international market. From October 10, a government order will permit qualified companies to import the precious metal. A central bank licence will be issued to companies for gold imports and a quota set annually. Vo Tri Thanh, an economist based in Hanoi, said that more imports would help to cool the domestic gold price and reduce the gap between the local market and the global one. However, it could also pressure the exchange rate. Thanh explained that "you will need to pay U.S. dollar to import gold and the more you import the greater the outflows of greenback." The central bank announced earlier this week that the decree issued on August 26 will also end its monopoly over gold bullion in an effort to diversify the gold supply and increase competition and transparency in the marketplace. The central bank also said that it would tighten its controls on gold trading firms in order to prevent money laundering and other illegal activities such as smuggling, illegal trading, and speculation. The police in Vietnam have charged a former Saigon Jewellery chief executive with embezzlement, and abuse of authority. ($1 = 26 397 dong)
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Saudi Aramco wants buyers to buy more oil for October after a price drop, sources claim
Three sources with knowledge of the matter have confirmed that Saudi Aramco, the world's largest oil exporter, has asked Asian buyers for more crude oil in October. The kingdom had made price cuts deeper than expected on all grades due to a growing supply. Two sources claim that Saudi Aramco, in its bid to regain market share, spoke with Asian buyers at the APPEC Conference in Singapore this week, encouraging them to buy more crude oil in October. One of them stated that this has partially led to the delay of the October supply being allocated to their customers, possibly until next week. Aramco has not responded to a comment request. All sources spoke under condition of anonymity. The state-owned producer announced the price of its Arab Light crude for Asia in October at $2.20 per barrel, which is $2.20 above the average Oman/Dubai. This represents a $1 drop from the five-month high reached in September. The price reduction followed a decision made by the Organization of Petroleum Exporting Countries (OPEC+) and its allies, led by Russia, at the weekend to increase production by 137,000 barrels a day in October. Since April, the group led by Saudi Aramco, which pumps half of all world oil, has already increased production by 2.5 million barrels per day, or 2.4%. Analysts say the move shows that OPEC+ prioritizes market share, even if this means softer prices. The increase in production has not yet been felt on global markets, due to the strong Middle East oil market in summer. However, it is expected that this will cause global oil markets to become surpluses and global benchmark Brent oil to drop below $60 per barrel. Saudi crude exports from Saudi Arabia to China, the top importer, fell by about 43 million barrels between August and September. Brent crude futures fell slightly to $67.38 per barrel on Thursday, on concerns about a softer U.S. market and broader oversupply risks. However, losses were contained by worries over the Middle East attacks and Russia's conflict in Ukraine. (Reporting and editing by Clarence Fernandez in Singapore, Florence Tan, Siyi Liu)
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The EU's highest court has ruled against Hungary's nuclear aid
The EU's highest court ruled on Thursday that the European Commission shouldn't have approved Hungarian aid to expand its Paks nuclear plant by a Russian firm, as the Commission hadn’t checked whether the contract complied with EU rules. As part of a bilateral agreement between Russia and Hungary regarding the peaceful use nuclear energy, Hungary awarded the contract directly to Nizhny Novgorod Engineering of Russia. The Russian government then provided Hungary with an official loan to help finance the majority of the construction of the new reactors. In 2017, the European Commission also approved the project. In 2018, Austria, a neighboring country, filed a complaint with the EU General Court about the state assistance involved in the deal. However the case was lost. The Austrian government then appealed to the EU Court of Justice. On Thursday, the Court of Justice ruled that Austria was right in its argument that the Commission had to examine whether awarding the contract directly to the Russian firm was compliant with EU procurement laws. Bart Meijer, Sharon Singleton, and Helen Popper edited the article.
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IEA: World oil market will see increased supply and surplus after OPEC+ increase
The International Energy Agency stated on Thursday that the world oil supply would rise faster than expected in 2018, as OPEC+ member countries increase their output and the supply from outside of the group increases. It also suggested that a surplus may grow by 2026. The IEA, a consultancy for industrialised nations, has said that the supply will increase by 2.7 millions barrels per day in 2025. This is up from 2.5million bpd, as previously predicted. And by a further 2.1million bpd in next year. OPEC+ has added more crude oil to the market since the Organization of the Petroleum Exporting Countries (OPEC), Russia, and other allies have decided to unwind their second layer of production cuts faster than originally planned. This extra supply has led to concerns of an excess and pressure on oil prices in this year. The IEA believes that supply is increasing faster than demand, despite its upward revision of the forecast for world demand growth this year, which was increased by 60,000 bpd compared to the previous forecast. It cited resilient deliveries in advanced countries as the reason. The IEA reported that "Oil markets were being pulled in various directions by a variety of forces. New sanctions against Russia and Iran could lead to supply losses, while OPEC+'s supply was higher and there was the possibility of an inflated oil balance." IEA's demand forecasts are lower than other forecasters, because the agency anticipates a quicker transition to renewable sources of energy. OPEC will update its forecasts on Thursday, with a demand increase greater than that of the IEA. The IEA said the world market looked oversupplied. Thursday's report suggested that the supply could exceed demand by 3.3 million bpd in the next year. This is due to growth outside of the OPEC+ and a small expansion in demand. The report from last month suggested a surplus for 2026 of nearly 3 million bpd. (Reporting and editing by Louise Heavens, Susan Fenton, and Alex Lawler)
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Iron ore prices fall as China's steel stocks rise
Iron ore futures prices fell on Thursday as the sentiment was weighed down by China, a major steel consumer. The day-traded iron ore contract for January on China's Dalian Commodity Exchange closed 0.81% lower, at 795.5 Yuan ($111.69), per metric ton. As of 0835 GMT, the benchmark October iron ore traded on Singapore Exchange fell 1.24% to $100.55 per ton. Analysts in Shanghai said that "Steel inventories continue to accumulate while demand is still not showing clear signs of improvement." The stock of five major steel products rose for the seventh week in a row, reaching a four-month record of 15,15 million tons during the week ending September 10. This was according to data provided by consultancy Mysteel. Prices were volatile earlier in the session as traders awaited important China data due on Monday. These include property, economic growth, and industrial metals output. First Futures analysts said that a tight balance between the supply and demand for ore, a key ingredient in steelmaking, is expected to support prices. The focus remains on whether Beijing will cut steel production across the country for the rest of the year in order to rebalance the market, which has been struggling with overcapacity as well as a faltering domestic demand. The Shanghai Futures Exchange saw a decline in most steel benchmarks. Rebar fell 0.51%, while hot-rolled coils dropped 0.03%. Stainless steel lost 0.35%, and wire rod gained 0.37%. Analysts said that prices of coking coal, which is also used to make steel, increased by 2.33% and 1.8%, respectively. The latest mine accident, in Heilongjiang Province, northeastern China, raised concerns about more stringent safety measures, which could limit supply. State media reported that all six trapped miners were successfully rescued. Reporting by Amy Lv, Lewis Jackson and Eileen Soreng; Editing by Ronojoy Mazumdar & Eileen Soreng.
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Investors weigh Israel's attack against Qatar and US rate cuts as they mix up the Gulf markets
Gulf stocks were mixed early on Thursday. They reflected a cautious mood, but there was no sign of a risk-off position after Israel's attack in Qatar. Traders appeared to be pricing the event as an isolated incident. Israel expanded its Middle East military campaign by targeting Hamas leaders in Doha. Regional investors, who have been navigating months' worth of geopolitical tension, seemed to see the event from a temporary, tactical perspective. Qatar's benchmark stock index fell 0.3% on track to extend its losses for the fourth consecutive session. Investors weighed political developments and possible diplomatic uncertainty as they sold financials. Qatar National Bank is the largest lender in the region. It has decended by more than 1%. Saudi Arabia's main stock index dropped 0.2% during choppy trading as investors sold selectively. Financials and energy sectors were among the losers amid concerns about a weaker U.S. oil demand and an oversupply. Al Rajhi Bank, the index heavyweight, lost 0.6% while Saudi Aramco dropped 0.2%. Aramco has raised $3 billion through a sale of dual-tranche Islamic bonds (sukuk), as it moves to tap the debt markets in order to strengthen its balance sheet due to lower oil prices. Dubai's main stock index rose by 0.1% after bouncing from its lowest level in almost two months. Emaar Properties, the blue-chip property firm, gained 0.7%. ADNOC Gas and Fertiglobe both rose 0.6% and 1.3%, respectively, ending a four-day loss streak. Investors are keeping a close eye on the U.S. Federal Reserve, as a positive reading of U.S. producer price levels has led markets to price a higher chance that three interest rate reductions will be made this year. (Reporting from Amna Marieyam in Bengaluru, Editing by Andrew Cawthorne.)
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Ukraine's DTEK invests heavily in battery storage to boost energy security
DTEK, a Ukrainian private energy company, announced on Thursday that it has built the largest battery storage facility in the country to ensure stable electricity supplies as a result of Russian attacks against Ukraine's energy industry. Russia is attacking Ukraine's energy system and denying millions of Ukrainians power. It launched a full scale war against Ukraine 2022. DTEK reported that its total investment for the project was 125 million euro ($146.13million). It said that six battery storage systems were connected to the electricity grid in Kyiv, the capital of Ukraine, and the Dnipropetrovsk region in eastern Ukraine. The combined facilities were built in partnership with Fluence, an American leader in intelligent energy storage. They can store 400 megawatts of electricity, enough to power 600 000 Ukrainian households for 2 hours. DTEK stated that the new systems will increase the safety of the electricity supply, and reduce the risks of accidents and outages. This is especially true in the event of an accident or breakdown of some power generation. Svitlana Grinduk, Ukraine's Energy Minister, said that the energy storage system is as important as the energy production itself in the context of the large-scale attacks against Ukraine's energy systems.
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Cnergyico, Pakistan's largest refiner, will increase fuel oil exports in response to a sharp drop in sales
Vice chairman of Cnergyico, Pakistan's largest oil refiner, said that the company expects fuel oil exports to increase by 35 to 40 percent during fiscal year 2026. This is because high taxes are reducing domestic sales. In June, Pakistan imposed an additional tax of around 40% on domestic fuel oil sales, in addition to a consumption-based tax of 18%. This effectively closed the market for its refiners. Usama Qreshi said on the sidelines APPEC that the company had exported 80,000 tonnes, or 95%, of its production from July until now, compared to 55% for the previous fiscal year which ended in June. Fuel oil sales, which are primarily used by ships, usually make up 10 to 15 percent of a refiner's revenue. Cnergyico exports 247,000 metric tonnes (1.57 millions barrels) per year. An increase of 35-40% would bring the annual exports up to 333,000 to 346,000 tons. Kpler's data showed that Pakistan's fuel exports reached a record high of 242,000 tonnes in August. Qureshi, who spoke in an interview, said that Cnergyico was upgrading its refinery to reduce fuel oil output and increase fuel sales on the domestic market in accordance with Pakistani policy guidelines for upgrading refineries to produce cleaner gasoline. Qureshi said, "We plan to import more sweet crude oil and upgrade the refinery so that it produces cleaner diesel and gasoline. We also plan to establish fuel oil cracking plants to boost gasoline production." Cnergyico imports sour crude from the Middle East with a high sulphur level. Last month, it was Pakistan's very first purchase of U.S. oil. The crude oil produced in the United States is typically low sulphur and produces less fuel oil after refinement. Qureshi stated that domestic sales of fuel oil is typically more profitable than exports. Export revenue is dependent on fuel cracks. The company sold fuel to traders, who then exported it to South Europe, Singapore and United Arab Emirates. Pakistan has significant fuel oil-based electricity generation capacity. However, utilisation of this capacity has plummeted in the last decade due to lower demand for power, increased solar adoption, and increased production from other clean sources, such as nuclear. (Reporting and editing by Clarence Fernandez; Sudarshan Varadhan)
ANALYSIS-China's food security dream deals with land, soil and water issues
China, the world's biggest agriculture importer, has set targets to drastically decrease its reliance on abroad purchasing over the coming years in line with its push for food security, however they will be exceedingly challenging to meet, experts state.
With restricted land and water, China will need to sharply boost farming performance through technology, including genetically customized crops, and expand area under growing to satisfy Beijing's 10-year forecasts.
The government visualizes 92% self-sufficiency in staple grains and beans by 2033, up from 84% during 2021-2023, according to a file launched in late April, on a path towards President Xi Jinping's objective to become an farming. power by the middle of the century.
Cutting the country's imports would be a blow to manufacturers. from the U.S. to Brazil and Indonesia, who have broadened. capability to satisfy need from China's 1.4 billion individuals, the. world's biggest market for soybeans, meat and grains.
Over the 10 years to 2033 the agriculture ministry jobs. a 75% plunge in corn imports to 6.8 million tons and a 60% drop. for wheat to 4.85 million tons.
For soybeans, the biggest product on a farm import costs that. totalled $234 billion last year, Beijing sees imports falling. 21% to 78.7 million lots in a years.
Those targets defy the patterns of the previous years in. which grains and oilseed imports have actually surged 87%.
Forecasting a sharp reversal where in ten years the. country will be importing less than it does today appears. doubtful, said Darin Friedrichs, co-founder of. Shanghai-based Sitonia Consulting.
China will have a hard time to meet its targets generally due to a. absence of land and water, 5 analysts and market executives. say.
In stark contrast to Beijing's forecasts, the U.S. Department of Farming (USDA) sees China's corn imports in. 2033/34 approximately in line with present levels and wheat imports. decreasing 20%. In the most significant divergence, USDA expects soybean. imports to increase 39%.
The USDA likewise anticipates growth in need for animal feed, a. essential user of soybeans and corn, to exceed domestic corn output. expansion and stimulate imports of sorghum and barley.
NATIONAL SECURITY
Food security has actually long been a concern for China, which has. an agonizing history of scarcity and should feed almost 20% of the. global population with less than 9% of its arable land and 6% of. its water resources.
The urgency to cut dependence on imports grew after the. nation faced supply chain disruptions throughout the COVID pandemic. and the Russia-Ukraine conflict.
A trade war with the U.S., its No. 2 agriculture supplier. after Brazil, and environment shocks such as heavy rains last year. that harmed China's wheat harvest, have contributed to the difficulty.
On June 1, China will execute a food security law that. calls for outright self-sufficiency in staple grains and. requires local governments to consist of food security in their. economic and development plans.
That will contribute to other efforts to bolster food production,. including stepped up grains insurance cover for farmers to. protect their earnings, revealed this week.
Last month, Beijing launched a drive to raise grain. output by a minimum of 50 million loads by 2030, highlighting. updated farmland and investments in seed innovation for higher. crop yields and quality.
SOIL CHALLENGES
China increased production of corn, soybeans, potatoes. and oilseeds in 2015 after expanding planting on previously. uncultivated land and motivating farmers to change from money. crops to staples.
However, even as the world's no. 2 corn producer gathered a. record 288.84 million metric loads in 2015, imports surged to a. near-record 27.1 million lots, driven by traders' preference for. corn from abroad that is often greater quality and cheaper.
Production development has actually hit a traffic jam due to insufficient. arable land, small production scale and an absence of farmers and. agriculture innovation, state media reported.
China's arable land per capita is less than one-third the. level in Brazil and one-sixth the level of the U.S., World Bank. information from 2021 programs.
Degraded and polluted soil in a nation where a considerable. share of land is either rocky mountains or desert leave it with. little area for expansion.
The government, which has actually significantly called for security. of its fertile black soil, is set to finish a four-year soil. survey in 2025. The last study, in 2014, discovered that 40% of its. arable land was degraded from overuse of chemicals and heavy. metal contamination.
To compensate, China is pouring countless dollars into. research study of farming water-intensive crops such as rice in the. deserts of Inner Mongolia and Xinjiang.
By turning sand into soil and breeding saline-tolerant. crops, it intends to develop more farmland, a strategy market. executives say will take some time and heavy financial investments in. fertiliser, watering and biotechnology.
One obstacle is China's predominance of small farms, run. by aging owners who may not have the ability to afford or run. equipment such as drone sprayers, more productive seeds and. technology such as huge information and AI.
Farms in China average 0.65 hectares, compared to 187. hectares in the U.S. and 60 hectares in Germany. China is. slowly moving towards a combination of its fragmented. farms.
After decades of hesitation, it is slowly embracing. genetically modified crops, this year authorizing the planting of. corn and soybean ranges that are higher-yielding and. insect-resistant, as well as gene-edited disease-resistant wheat. in hopes of accelerating production development.
China's soybean yields at 1.99 lots per hectare lag the 3.38. and 3.4 ton-yields in Brazil and the U.S., which have actually embraced. genetically customized soybeans.
However analysts state the federal government's target for cutting. soybean imports is impractical. At best, China might reduce its. reliance on soybean imports to 70% from more than 80% now,. stated Carl Pray, a farming professor at Rutgers University. in the U.S.
Nearly all of China's soybeans are high protein. varieties to produce tofu, and to replace imports it would need. to quickly broaden production of high-oil producing ranges for. cooking oil, which he stated would be hard, even with research study.
To produce sufficient soybeans to replace the Brazilian and. U.S. imports, there is simply not enough land, Pray said.
(source: Reuters)