Tag Archives: India

I’m Hungry. How About You?

You probably haven’t noticed, but the world is on the verge of a horrific global food crisis. The World Bank and the U.N. are not very good at getting anything done, but they are great at record keeping and statistics. Here are a few items that should give you some alarm.

At some point, this crisis will affect you and your family.

Crazy weather and horrifying natural disasters have played havoc with agricultural production in many areas of the globe over the past couple of years. Meanwhile, the price of oil has begun to skyrocket. The entire global economy is predicated on the ability to use massive amounts of inexpensive oil to cheaply produce food and other goods and transport them over vast distances. Without cheap oil the whole game changes. Topsoil is being depleted at a staggering rate and key aquifers all over the world are being drained at an alarming pace. Global food prices are already at an all-time high and they continue to move up aggressively. So what is going to happen to our world when hundreds of millions more people cannot afford to feed themselves? I don’t know, but I bet it will be interesting.

Most Americans are so accustomed to supermarkets that are absolutely packed to the gills with massive amounts of really inexpensive food that they cannot even imagine that life could be any other way. Unfortunately, that era is ending. There are all kinds of indications that we are now entering a time when there will not be nearly enough food for everyone in the world. As competition for food supplies increases, food prices are going to go up. In fact, at some point they are going to go way up.

Let’s look at some of the key reasons why an increasing number of people believe that a massive food crisis is on the horizon. The following are 20 signs that a horrific global food crisis is coming:

#1 According to the World Bank, 44 million people around the globe have been pushed into extreme poverty since last June because of rising food prices.

#2 The world is losing topsoil at an astounding rate. In fact, according to Lester Brown, “one third of the world’s cropland is losing topsoil faster than new soil is forming through natural processes”.

#3 Due to U.S. ethanol subsidies, almost a third of all corn grown in the United States is now used for fuel. This is putting a lot of stress on the price of corn.

#4 Due to a lack of water, some countries in the Middle East find themselves forced to almost totally rely on other nations for basic food staples. For example, it is being projected that there will be no more wheat production in Saudi Arabia by the year 2012.

#5 Water tables all over the globe are being depleted at an alarming rate due to “overpumping”. According to the World Bank, there are 130 million people in China and 175 million people in India that are being fed with grain with water that is being pumped out of aquifers faster than it can be replaced. So what happens once all of that water is gone?

#6 In the United States, the systematic depletion of the Ogallala Aquifer could eventually turn “America’s Breadbasket” back into the “Dust Bowl“.

#7 Diseases such as UG99 wheat rust are wiping out increasingly large segments of the world food supply.

#8 The tsunami and subsequent nuclear crisis in Japan have rendered vast agricultural areas in that nation unusable. In fact, there are many that believe that eventually a significant portion of northern Japan will be considered to be uninhabitable. Not only that, many are now convinced that the Japanese economy, the third largest economy in the world, is likely to totally collapse as a result of all this.

#9 The price of oil may be the biggest factor on this list. The way that we produce our food is very heavily dependent on oil. The way that we transport our food is very heavily dependent on oil. When you have skyrocketing oil prices, our entire food production system becomes much more expensive. If the price of oil continues to stay high, we are going to see much higher food prices and some forms of food production will no longer make economic sense at all.

#10 At some point the world could experience a very serious fertilizer shortage. According to scientists with the Global Phosphorus Research Initiative, the world is not going to have enough phosphorous to meet agricultural demand in just 30 to 40 years.

#11 Food inflation is already devastating many economies around the globe. For example, India is dealing with an annual food inflation rate of 18 percent.

#12 According to the United Nations, the global price of food reached a new all-time high in February.

#13 According to the World Bank, the global price of food has risen 36% over the past 12 months.

#14 The commodity price of wheat has approximately doubled since last summer.

#15 The commodity price of corn has also about doubled since last summer.

#16 The commodity price of soybeans is up about 50% since last June.

#17 The commodity price of orange juice has doubled since 2009.

#18 There are about 3 billion people around the globe that live on the equivalent of 2 dollars a day or less and the world was already on the verge of economic disaster before this year even began.

#19 2011 has already been one of the craziest years since World War 2. Revolutions have swept across the Middle East, the United States has gotten involved in the civil war in Libya, Europe is on the verge of a financial meltdown and the U.S. dollar is dying. None of this is good news for global food production.

#20 There have been persistent rumors of shortages at some of the biggest suppliers of emergency food in the United States. The following is an excerpt from a recent “special alert” posted on Raiders News Network: “Look around you. Read the headlines. See the largest factories of food, potassium iodide, and other emergency product manufacturers literally closing their online stores and putting up signs like those on Mountain House’s Official Website and Thyrosafe’s Factory Webpage that explain, due to overwhelming demand, they are shutting down sales for the time being and hope to reopen someday.

Not good signs.

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It’s Complicated. Why Iranian Oil Sanctions Won’t Work.

As Washington and its allies tighten the screws on Tehran over its nuclear program, Iran is coming up with new ways to sell its oil – offering special deals to allies China and India, delivering oil to clients and swapping it for gold and grain.

Tehran may also be devising ways to make its oil more saleable on international markets, switching it between tankers and blending crudes to disguise the origin, oil trading and shipping sources have told Reuters. They spoke on condition of anonymity because of the sensitivity to business relationships.

Washington, London and Brussels are doing their best to put up obstacles, but Iran is market savvy, these traders said, describing a number of ways Iran can avoid sanctions and continue to get its oil to market.

Such routes mean selling oil at a discount – which will hurt Tehran’s income but could also prove highly profitable for customers and the middlemen involved.

“The Iranians are very enterprising and can probably out-smart all of us,” said an executive at a major oil company.

Tehran has been maneuvering for years.

Iran’s senior oil executives were reworking the oil books back in 1995, when Washington banned 600,000 barrels per day (bpd) of Iranian crude imports in an attempt to curb Tehran’s drive to acquire nuclear weapons.

“It took us about three months to re-direct all the oil we were selling to U.S. customers,” recalled an Iranian oil source. “But we eventually found new buyers elsewhere.”

Oil was then around $18 a barrel. It is now above $120.

Seventeen years on, Iran’s oil elite – their every move under scrutiny from the West – face a far tougher test as they aim to keep up shipments of 2.3 million bpd. They are scrambling to find new homes for 500,000 bpd of oil sales as rigorous U.S. financial measures and a European Union oil ban, effective July 1, make it ever more difficult to pay for and ship oil from Iran.

BLOW DEALT

But Leonid Fedun, a key shareholder in Russia’s Lukoil which halted work in Iran 10 years ago because of U.S. sanctions, said it was hard to envision measures that would keep Iranian oil from reaching markets.

“It is difficult to achieve something with sanctions if you have a system of different oil buyers. For example, if China doesn’t join sanctions, they won’t work,” he said. Keeping Iran’s vast supplies off the market would cause supply problems, which would be difficult in a U.S. presidential election year when energy prices are an issue, he added.

Washington dealt a blow to Tehran’s financial network when it shut down a major channel for oil sales, the Dubai-based Noor Islamic Bank, at the end of last year. But traders say there are still small European and Russian banks with no U.S. exposure that are willing to handle payments.

For its part, Tehran has switched into other currencies such as yen and rupees, and carried out barter deals to swap oil or gold directly for food imports, as U.S. pressure makes dollar and euro transfers harder.

Such unconventional deals are already in evidence in Iran’s grains trade with the likes of Russiaand India. Fearing sanctions will cause food shortages, Iran is ordering huge amounts of wheat to feed its population of 77 million.

“Russian banks seem to be ready to finance some of the deals and some payments could be made in roubles or even in the Indonesian currency,” a trader said. Tehran may also offer to pay in steel or crude oil.

While the West’s sanctions net is closing in on countries within its own sphere of influence, it is causing few problems for top buyer China, which can self-finance, ship and insure oil supplies from Iran which are being sold on extended credit.

An executive from a major oil company told Reuters: “We are hearing the Iranians have started offering a discount as big as $20 per barrel. Do you really believe China will be able to resist?”

It is widely assumed Tehran will discount and sell much of the oil that is displaced from Europe to Beijing. But Iranian oil officials admit the market in China, though strategic, is finite and there is as yet scant evidence of extra oil flowing into the country’s stockpiles.

China has meanwhile helped Iran dodge tightening sanctions by selling it much-needed gasoline. Although a major oil producer, Iran’s aging refineries struggle to produce enough fuel and imports are vital to fill the shortfall.

“NO RISK”

Iran is also bending over backwards to sell more oil into India, its second biggest client, on flexible commercial terms. “Iran is saying: ‘We will deliver our crude for you on our ships on extended credit. There is no risk’,” said a market source with knowledge of Iran’s sales tactics.

Three of Iran’s supertankers – the Hormoz, the Harsin and the Damavand – have already delivered crude to India’s west coast refiners, say market sources with knowledge of the ships’ movements, as Indian buyers struggle to find tankers willing to dock in Iran for fear they might lose EU-linked insurance cover.

The tankers, owned by Iran’s privately-held NITC, have insurance cover from Kish Protection & Indemnity Club – another privately owned Iranian outfit.

India has said it will abide by UN sanctions on Iran, but has refused to go along with the new financial measures imposed by the United States and the EU.

Even so, the sanctions have left Indian companies struggling to pay for their Iranian crude. They had been paying in euros via Turkey’s Halkbank, but that route looks vulnerable to new sanctions. Halbank’s general manager Suleyman Aslan said on January 26 Halkbank would continue to handle customers’ oil payments to Iran as long as they comply with international regulations.

As an alternative, New Delhi and Tehran have set up a payment method using the rupee, which is not freely traded on international markets, to pay for 45 percent of oil imports. India owes Tehran about $11 billion.

Iran has already started paying Indian exporters in rupees, but refiners are waiting to hear whether they will have to pay hefty taxes before using rupees to pay for oil.

Payments to Indian exporters, owed about $3 billion, are being remitted through Iran’s Bank Parsian which has opened an account with India’s UCO bank, said M. Rafeeque Ahmed, president of the Federation of Indian Export Organisations. Bank Parsian is among private Iranian banks that are free from sanctions against Iran‘s state-owned banks.

BARTER

In its search for new outlets, Tehran is also courting smaller Asian countries that may have been neglected. For example, Iran is offering to supply Pakistan with 80,000 bpd on a three-month deferred payment plan.

The offer came just after Pakistani officials revealed Iran had asked to import a million tonnes of wheat in a barter deal.

Iran has also held talks with South Africa about the possibility of salting barrels away in storage tanks at Saldanha Bay, say industry sources with knowledge of the talks.

Tehran first proposed storing excess fuel in the facility on the west coast, north of Cape Town, in 1995, but talks broke down partly due to public concern that increased tanker traffic would be harmful to the environment.

While it works to secure new supply routes, traders say Iran is steaming vessels laden with crude and condensates into Asia, where they can drain the contents into smaller ships and sell the cargoes into China and parts of Southeast Asia.

Another of Iran’s supertankers, the Delvar, was involved in such an operation last week. The ship was first parked off Indonesia’s Karimun island, an offshore storage point near Singapore that is often used for ship-to-ship transfers.

A smaller, China-bound tanker, Xuan Wu Hu, pulled up beside the Delvar and loaded a cargo of condensate for Huizhou, where China National Offshore Oil Corp (CNOOC) and Royal Dutch Shell operate a petrochemical complex.

The Delvar then moved to Bukom island, home to Shell’s Singapore refinery, where it offloaded crude oil, traders said.

Blending Iranian crude and re-labeling the barrels is another option and one which could present an opportunity for trading houses, say industry sources.

Possibilities for such operations exist all over the world, from the transshipment hub of Fujairah in the United Arab Emirates, to the Indonesian archipelago, South Africa and even in parts of South America.

“Oil traders can buy Iranian crude, rebrand it and sell to someone else,” said an Iranian oil industry source. “They like these sanctions.”


Facebook to Reach 1B Active Users in August, That’s 14% of the World!!!

Yikes!!!

Facebook Growth

Facebook is soon to have 14 percent of the world’s population all to itself. A new study says the social network will hit one billion users this year.

Gregory Lyons, a senior analyst at digital marketing firm iCrossing, ran the numbers based on Facebook’s past growth and found that Facebook will probably hit the milestone in August 2012. Currently, it has 800,000 users. He found that Facebook initially grew at an exponential rate, but then went through a slow down in progress, which caused it to grow more linearly. The slow down was a result of the United States and the United Kingdom tapping out at 49 and 47 percent of the population respectively. New signups from those countries have “slowed or stopped”.

Google+ Growth

 

It seems that Facebook’s Googleadversary, Google+, is still in exponential growth mode, reaching the 62 million mark in six months, according to statistician Paul Allen. It took Google+ only 2 months to reach 10 million users, a milestone that took Facebook 38 months. However, Google+ has been born in the age of social. It’s not creating anything new by way of industries. Facebook still remains the ultimate social player outside of Silicon Valley.

Allen suspects that Google+ will hit nearly 400 million users by the end of 2012, due to accelerated Android sign-ups. However, according to a recent study by analyst firm Nielsen, Facebook’s application is the most popular on Android devices, falling second only to the Android Marketplace. The study takes into account users from 18-44 years of age and found that roughly 80 percent of these people are using Facebook’s app more than any other app on the device.

The push to one billion active users will come from developing countries, according to Lyons. Specifically countries such as India and Brazil, which are poking their heads out as late adopters. In the last nine months, India has grown from 22 million users to 36 million. Brazil is following close behind at 30 million, up from 13 million nine months ago.

The growth is just more support for Facebook’s potential 2012 debut as a public company, which some are saying will be a $10 billion IPO. Only three other US companies have had $10 billion or more IPOsAT&T at $10.6 billion, GM at $18.1 billion and Visa at $19.7.

The timing of the offering is still up in the air, though an August projection is starting to look pretty good.