CHINA SCRAPS MORE THAN 100 POWER PLANTS
China has announced plans to cancel more than 100 coal plants currently in development, scrapping what would amount to a massive 120 gigawatts (GW) of coal-fired electricity capacity if the plants were completed.
For a bit of context, the entire US has approximately 305 GW gigawatts of coal capacity in total, and this massive adjustment leaves room for China to advance its development of clean, renewable energy.
Despite China’s much-publicized pollution problems, the reason for the cancellations is because the country was actually vastly exceeding its planned coal capacity for the future. Per China’s five-year-plan for its power sector, it’s targeting a coal-fired capacity of 1,100 GW in 2020 – a sizeable increase from its existing 920 GW.
OIL’S REBOUND ABOVE DOLLAR 50 IN Q1
Benchmark crude oil prices will likely average $54 a barrel in the first quarter, but the rally may stall if producers don’t deliver on pledged supply cuts.
OPEC agreed in November to cut production for the first time since 2008, defying skeptics. The cuts totaling about 1.2 million barrels a day aim to accelerate the global oil market re-balancing process. Though the supply curbs are effective from January 1st, compliance rates will only become clearer in February.
Oil bulls are betting OPEC will stick to the script. Consultancy Energy Aspects expects compliance rates of around 80 percent but getting Iraq to adhere to the quota will be challenging. Oil bears, however, believe speculating on the final outcome is premature.
PAKISTAN BECOMES 4TH LARGEST MILK PRODUCING COUNTRY
Pakistan ranks fourth in the world with 42 million tons production of milk every year but remains far below in exports of dairy products when compared with its contemporary counterparts.
The US tops the list followed by India, China, Pakistan, Brazil, Germany, Russia, France, New Zealand and Turkey.
Pakistan is a surplus in milk production but it is least commercial enterprise due to lack of proper planning in collection, transportation and distribution chains. Millions of litres of milk go wasted on daily basis due to the absence of value addition method and processing facilities.
SUGAR TARIFFS COMPLICATION IN US
A remarkably large number of people seem to think that imposing tariffs on imports into the United States would be a good idea. That number, unfortunately, including the President-elect, Donald Trump. However, we do have an American industry which is protected by exactly such trade tariffs, the sugar one.
And we even know what the effects of those sugar tariffs are — they make all Americans poorer. So, if that is true then what is the effect of the more general tariffs Donald Trump and others want going to be? Well, obviously, they’re going to make everyone poorer, aren’t they? And if we’re honest about it making the citizenry poorer is not normally regarded as a general aim of economic policy.
In fiscal year (FY) 2013, Americans consumed 12 million tons of refined sugar, with the average price for raw sugar 6 cents per pound higher than the average world price. That means, based on 24 billion pounds of refined sugar use at a 6-cents-per-pound US premium, Americans paid an unnecessary $1.4 billion extra for sugar. That is equivalent to more than $310,000 per sugar farm in the United States.
DIAMOND INDUSTRY STRUGGLING
The diamond industry is looking to up the ante on its effort to win over younger consumers more interested in gadgets and gastronomy.
The Diamond Producers Association lobby will ask its backers including top miners De Beers and Alrosa PJSC to raise its budget to as much as $60 million a year from $6 million, said people familiar with the plans, who asked not to be identified as discussions are private.
The group was set up in 2015 with an eye to try reviving the glory days of half a century ago when slogans like “a diamond is forever” were ubiquitous in popular culture.
KENYA TO INVEST IN ORTHODOX TEA PRODUCTION
The Kenya Tea Development Agency wants to invest in the production of orthodox tea to export to Iran and Russia. Orthodox teas are whole leaf teas manufactured using the traditional process.
Board chairman Peter Kanyago said the two countries have the biggest markets for the orthodox tea in the world. Once the agency starts manufacturing tea, the market will be good, he said. More than Sh100 million will be used to install the machines.
EUROPEAN SOYMEAL STAYS HIGHER
Soymeal on the European meals and feeds market continued firmer on Wednesday on concerns that excessive rains in Argentina could hurt the crop.
Adverse weather in Argentina boosted follow-though technical and speculative buying in Chicago soy complex futures on Tuesday and the European cash market was mostly fixed on day earlier CBOT close.
South American soymeal was mostly offered between unchanged and $3 a ton higher. Buyers were holding back, believing the CBOT market is overbought and bound for a technical reaction.
US NATURAL GAS PRODUCTION WILL RISE IN 2017
After the first fall in US dry gas production in more than a decade in 2016, output is sure to regain its upward trend in 2017. No wonder, EIA has Henry Hub prices increasing from $2.50/MMBtu last year to nearly $3.30 this year.
Again, regardless of what some keep telling you, we have baseload gas demand markets that are continually growing: gas for electricity, gas for industrial use, gas for LNG export to the world, gas for piped export to Mexico and Canada. And don’t underestimate emerging idiosyncratic uses, such as gas in heavy trucking and gas as the required backup for wind and solar power.