Author Topic: PanFa War; Supply Chain, and Sabotage of Food Supply  (Read 25920 times)

Crafty_Dog

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GPF: Looks like Russia will not extend Black Sea grain deal
« Reply #254 on: April 13, 2023, 08:57:07 AM »


   
Daily Memo: Future of Black Sea Grain Deal,
Moscow is signaling it may not extend the agreement past May.
By: Geopolitical Futures

In jeopardy. The future of the Black Sea grain deal, which facilitates the shipment of Ukrainian grain to global markets, is in doubt. Russia’s Foreign Ministry said extension of the agreement beyond May 18 is contingent on making progress on five points: reconnecting the Russian Agricultural Bank to the SWIFT banking system; resuming supplies to Russia of agricultural equipment, spare parts and services; lifting restrictions on insurance and reinsurance and the ban on access to ports; restoring the Togliatti-Odessa ammonia pipeline; and unblocking foreign assets and accounts owned by Russian companies in the food and fertilizer business. Kremlin spokesperson Dmitry Peskov said prospects for an extension “are not so good.” Russia remains one of the world's most important suppliers of grain, especially wheat.

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Zeihan
« Reply #259 on: June 08, 2023, 10:26:48 PM »
Some relevant comments on the dam sabotage affecting food supply.

https://www.youtube.com/watch?v=XlrUkIRCSWI



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Re: PanFa War; Supply Chain, and Sabotage of Food Supply
« Reply #262 on: June 11, 2023, 05:11:12 AM »
Not really sabotage of food supply here  (https://firehydrantoffreedom.com/index.php?topic=404.2800 would be better) and the theories about skullduggery are intuitively unpersuasive for me.   For me, if sabotage, then the simplest (Occam's Razor) would be that fifth columnists were at work.

G M

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Re: PanFa War; Supply Chain, and Sabotage of Food Supply
« Reply #263 on: June 11, 2023, 08:57:29 AM »
Not really sabotage of food supply here  (https://firehydrantoffreedom.com/index.php?topic=404.2800 would be better) and the theories about skullduggery are intuitively unpersuasive for me.   For me, if sabotage, then the simplest (Occam's Razor) would be that fifth columnists were at work.

Working for whom?


G M

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Re: PanFa War; Supply Chain, and Sabotage of Food Supply
« Reply #265 on: June 11, 2023, 09:42:46 AM »
Not really sabotage of food supply here  (https://firehydrantoffreedom.com/index.php?topic=404.2800 would be better) and the theories about skullduggery are intuitively unpersuasive for me.   For me, if sabotage, then the simplest (Occam's Razor) would be that fifth columnists were at work.

https://news.gov.bc.ca/releases/2021AFF0054-001739

It's ok, lots of bugs for people to eat!

NOTE: Yes, it's an old PR release, just pointing out that wildfires seriously impact agriculture.
« Last Edit: June 11, 2023, 09:47:21 AM by G M »

G M

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Re: PanFa War; Supply Chain, and Sabotage of Food Supply
« Reply #266 on: June 11, 2023, 09:55:43 AM »
Not really sabotage of food supply here  (https://firehydrantoffreedom.com/index.php?topic=404.2800 would be better) and the theories about skullduggery are intuitively unpersuasive for me.   For me, if sabotage, then the simplest (Occam's Razor) would be that fifth columnists were at work.

https://news.gov.bc.ca/releases/2021AFF0054-001739

It's ok, lots of bugs for people to eat!

NOTE: Yes, it's an old PR release, just pointing out that wildfires seriously impact agriculture.

https://everythinggp.com/2023/05/10/dunes-west-wildfire-update-local-farmers-called-to-disc-or-seed-land-canadian-military-arrives/

Crafty_Dog

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Re: PanFa War; Supply Chain, and Sabotage of Food Supply
« Reply #267 on: June 11, 2023, 07:07:54 PM »
Fifth columnists for whom?

Many possibilities.  The Chinese?  The Russians?  The Iranians?  Jihadis?

Test runs for something bigger?  Or just simply ramping up with disruption after disruption?

G M

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Re: PanFa War; Supply Chain, and Sabotage of Food Supply
« Reply #268 on: June 11, 2023, 07:14:47 PM »
Fifth columnists for whom?

Many possibilities.  The Chinese?  The Russians?  The Iranians?  Jihadis?

Test runs for something bigger?  Or just simply ramping up with disruption after disruption?

Don't forget elements from the FUSA feral government and Soviet Canuckistan.





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Re: PanFa War; Supply Chain, and Sabotage of Food Supply
« Reply #273 on: June 13, 2023, 01:51:06 PM »
!!!

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RANE: Implications of Russia's exit from the grain deal
« Reply #274 on: July 17, 2023, 06:40:50 PM »
The Implications of Russia’s Exit From the Black Sea Grain Deal
10 MIN READJul 17, 2023 | 22:48 GMT


Russia's decision to leave the Black Sea grain deal nearly a year after it was signed will strain its relations with Turkey, further imperil Ukraine's war-torn economy and elevate global food prices, with poorer countries in the Global South being hit hardest. On July 17, Russia's foreign ministry announced the country would leave the agreement that has helped bring Ukrainian grain to the world's markets over the past year. As part of its withdrawal from the deal, Russia said it would no longer guarantee the safety of ships transiting the maritime humanitarian corridor in the Black Sea. It also said that the Joint Coordination Center, which had monitored the deal's implementation from Istanbul, would be disbanded. Russia claimed it decided to leave because its demands for extending the deal had not been met. But the announcement also came hours after an apparent Ukrainian maritime drone strike damaged the Kerch Strait Bridge linking Russia to Crimea. The attack fueled speculation about the extent to which the Ukrainian strike played a role in Russia's withdrawal from the grain export deal, though Kremlin Press Secretary Dmitry Peskov has denied the incident factored into Moscow's decision.

On July 22, 2022, Russian and Ukrainian officials each signed separate agreements with Turkey and the United Nations allowing the export of grain from select Ukrainian ports on the Black Sea, in exchange for a memorandum of understanding aiming to facilitate shipments of grain and fertilizers from Russia to world markets.
In March, Russia's U.N. ambassador named five ''systemic problems'' that needed to be resolved to allow the continuation of the grain deal: returning the Russian Agricultural Bank (Rosselkhozbank) to the SWIFT payment system; a resumption of supplies to Russia of agricultural machinery and spare parts; lifting restrictions on insurance and access to ports for Russian ships and cargo; unblocking accounts and financial activities of Russian fertilizer companies; and the resumption of an ammonia pipeline from the Russian city of Togliatti to the Ukrainian city of Odesa (the pipeline was damaged on June 7 but has not been in operation since the war began in February 2022). Russian officials explicitly left open the possibility of Russia returning to the deal, but indicated that progress toward the satisfaction of the above demands would have to be met first.
Moscow's frustration with the deal had been growing amid pressure from Russian nationalists who argued it was not in Russia's interests. Russia's abandonment of the deal is in part motivated by domestic political calculations. Over the past year, Russian President Vladimir Putin and other Russian authorities have struggled to make a compelling case to the Russian people about why the deal was needed — mainly claiming that it would benefit Russia's relations with foreign partners in Africa, Asia and the Middle East, which worried about agricultural price spikes. But this message failed to resonate, as Russian think tanks, state television and independent far-right bloggers regularly questioned whether the deal was ever in Russia's interest, and if it was, whether it remained so. Many of these skeptics saw the agreement as providing significant hard foreign currency flows to help Kyiv's cash-strapped economy stay afloat, thereby reducing financial costs that would otherwise have to be shouldered by the West. They also argued that the West would never observe the part of the deal pertaining to easing Russia's own agricultural exports because neither the United States nor the European Union, which were not parties to the agreement, showed signs they'd be willing to ease their sanctions regime on Moscow in exchange for the continuation of the grain deal. The Kremlin was likely keen not to further alienate these nationalist hard-liners who had long been calling for Russia's withdrawal — especially on the back of the Wagner Group's recent armed revolt.

According to the U.N. Economic Commission for Europe, Ukraine's agriculture industry generated 9% of the country's GDP in 2022, making it a key economic sector despite the large overall fall in Ukrainian agricultural exports over the past year amid Russia's invasion. Influential Russian commentators had argued that ending the deal would not only serve a major blow to Ukraine by denying its government significant revenue, but would also exacerbate war fatigue in the West (and in particular Europe) by further elevating food prices.
Prior to last month's Wagner uprising, the Kremlin may have thought that it could point to the significant domestic opposition to the grain deal as a way to increase its leverage in negotiations with the West. But the idea of using domestic opposition to gain greater concessions from the West has become much less attractive following the Wagner mutiny, which has made Moscow all the more hesitant to appear weak by highlighting the risks to the Kremlin of not having full control of domestic narratives opposing its policies.
Global food prices are unlikely to experience as intense and expansive of a shock as they did in spring 2022 in the wake of the deal's collapse, with the effects instead falling on poorer and more vulnerable countries. The U.N. Food and Agriculture Organization (FAO)'s global food price index reached a record high in July 2022 — the same month the export deal was originally signed, which was some four months after Russia began blockading Ukrainian wheat exports as part of its invasion. The global supply shocks brought on by the sudden loss of Ukrainian grain caused food prices to rise across the world in the spring of 2022. But the impact was particularly acute in poorer countries in the Global South, as well as among countries where Russia maintained defense and diplomatic ties (including Turkey, Egypt, India and nations throughout sub-Saharan Africa). The collapse of the grain deal following Russia's withdrawal will likely see price pains re-emerge in these countries. Food shortages risk worsening in Africa, in particular, as the agreement had reportedly seen Ukraine double its grain exports to African countries over the past six months, according to comments recently made by Turkey's transport minister. But global food prices are unlikely to reach the levels seen before the agreement was signed, as the loss of Ukrainian grain exports will this time be offset by above-average harvests expected from countries like Brazil and Argentina. The deal's collapse is expected to have a modest overall impact on global food prices thanks to these harvests — especially in the developed world, where stronger currencies will allow countries to affordably import food staples from abroad.

The U.N. food price index declined 11.6% year-on-year after Russia and Ukraine signed the grain deal on July 22, 2022, enabling Ukrainian grain to reach global markets. But a sign of the declining impact of the deal came in the spring of 2023, as Ukraine reported fewer exports because of increased Russian inspections of Ukrainian grain ships. These inspections also resulted in the complete collapse of exports from Ukraine's Yuzhny port, which accounted for up to a third of exports previously. Despite this slowdown, the FAO continued to report declining food prices.
Global climate conditions fueled improved harvest conditions, with El Nino bringing extra rain to places like Argentina, Brazil, and southern and western United States, where harvests in major agricultural hubs like California and Texas would benefit.
The grain deal also helped support the United Nations' World Food Program, which brought much-needed relief to countries like Somalia, Ethiopia and Yemen. The program was already facing funding shortfalls caused by the effects of the COVID-19 pandemic, global inflation and commodity shocks caused by the war in Ukraine.
Moscow's withdrawal from the grain deal will make Western countries even less likely to facilitate Russia's agricultural exports, forcing Moscow to consider unattractive military operations to stop Ukraine from exporting its own grain. Upon exiting the grain deal, Russia lost significant leverage over the West. As a result, the European Union will cease its efforts to connect a subsidiary of the Russian Agricultural Bank to the Brussels-based SWIFT international payments system, which means Russia will continue to struggle to export its agricultural goods. To compensate for this loss, Russia will be tempted to intervene militarily to prevent Ukraine from continuing to export its grain by sea. However, there are few attractive ways to do this, as attempting to reimpose a full-scale blockade would put Russia's naval and air assets at high risk. Furthermore, directly sinking non-Ukranianian civilian vessels would damage Russia's image and could spark a military confrontation with the West. Therefore, Russia will likely instead seek to degrade Ukraine's civilian infrastructure by stepping up strikes on port and transit routes. But the effectiveness of such strikes would be questionable and could cause Moscow to waste its precious precision munitions.

While Ukraine's overland export capability has expanded since 2022, Ukraine can export only a small portion of its grain overland, meaning it will be highly motivated to continue sea exports. Kyiv will work with the United Nations and insurers to continue coverage for any ships willing to continue using the grain corridor,  meaning that in theory, some sea exports could continue, further reducing the strain on global prices.
Russian naval and air assets have rarely sortied into the Black Sea en masse since the sinking of the missile cruiser Moskva, the flagship of Russia's Black Sea Fleet, in April 2022, largely moving in small groups to avoid Ukraine's anti-air and anti-shipping missile capabilities.
The end of the grain deal may also stoke fears of grain shortages and panic from Russia's partners in the Global South while causing minor harm to bilateral relations with Turkey. Moscow will face an uphill battle assuring partners in Asia, Africa and the Middle East that it can replace any loss of Ukrainian grain from the global market. But Moscow likely calculated that a relatively modest price shock will allow it to avoid significant backlash from partners in these regions. Moscow's first test will be on July 26, when African leaders — many of whom had urged Putin in person to stay in the grain deal just a month earlier — are in Moscow for a Russia-Africa summit. Relations between Moscow and Ankara will also grow more strained, as the end of the grain deal will exacerbate food price inflation in Turkey, as well as hurt Ankara's diplomatic clout and public support for its government at home. However, following the May reelection of Turkish President Recep Tayyip Erdogan, with whom Putin has a close working relationship, Moscow likely believes that any worsening of bilateral relations would be inconsequential, with Ankara seeking to preserve their close contacts even as it explores options to respond to Moscow.

After renewing the grain deal for the first time on Nov. 2, 2022, Putin said Russia could still leave the deal but would not obstruct Ukraine's grain deliveries to Turkey ''in any case,'' demonstrating the importance of the deal to Russia-Turkey relations. But recent moves by Ankara likely angered the Kremlin, including Turkey's recent support for Sweden's NATO bid, the release of Ukrainian commanders that were supposed to stay in Turkey under a prisoner exchange, explicit support for Ukraine's NATO aspirations, and a new agreement to build Turkish military hardware in Ukraine.
Russian media has speculated that the Turkish navy could play a role in securing grain exports from Ukraine. But NATO's involvement in securing the grain corridor remains highly unlikely given that one of the alliance's primary stated goals is avoiding direct conflict with Russia.


Crafty_Dog

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GPF: Much depends on the Russia grain deal
« Reply #276 on: July 24, 2023, 11:49:14 AM »


July 24, 2023
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Much Hangs in the Balance of the Grain Deal
Russia’s regional influence and monetary policy depend on the outcome.
By: Antonia Colibasanu
On July 21, Russia's central bank increased its key interest rate to 8.5 percent, citing inflationary risks from a tight labor market and strong consumer demand. This marks the first time the bank has lifted rates in over a year, and more may be in the offing. The move comes days after Russia withdrew from the U.N.-brokered Black Sea grain deal because, Moscow claims, it failed to live up to its promises, which included reconnecting a Russian bank to the international SWIFT system, the reopening of an ammonia pipeline and allowing Russian ships to dock in international ports.

The grain deal was established several months into the war in Ukraine to make sure Russia and Ukraine – two of the world’s most important grain producers – could safely bring their products to market and thus help keep global food prices down. The Black Sea is vital in this regard, accounting for roughly 30 percent of global wheat exports and 20 percent of global corn exports. But Russia has begun to lose interest in the agreement. Most of its grain exports are bound for Asia and, increasingly, Latin America, and therefore don’t need to pass through the Black Sea. (The recently inaugurated North-South corridor has become the first step in a global network of ports and routes that enables Russia to bypass the Black Sea entirely.) Meanwhile, Moscow has reason to curb exports. Doing so would protect domestic consumers, correct harvesting imbalances due to environmental factors and relieve pressure on the ruble.

This last point is critical. Propping up the ruble is the reason Russia needs to keep the grain deal going and why connecting the government-controlled agricultural bank Rosselkhozbank to the SWIFT system is the key Russian demand. Increasingly, Russia relies on the Chinese yuan rather than on Western currencies. According to the central bank's latest financial stability review, the share of the yuan in the exchange market rose to roughly 40 percent, and in foreign trade operations reached 25 percent for exports and 31 percent for imports in May 2023. Along with the increase in the share of the yuan, the share of the ruble in foreign trade also continued to grow, reaching 39 percent of exports and more than 30 percent of imports.

This has complicated things with traditional Russian allies. Russia’s prolific use of the yuan, a currency that’s not freely convertible, has essentially made its monetary policy dependent on Beijing while contributing to domestic inflation. Meanwhile, recent news reports suggest a weak ruble has caused problems in Central Asia, where Russia has an imperative to help keep populations safe and stable.

Dynamics of U.S. Dollar/Russian Ruble Exchange Rate
(click to enlarge)

All of this makes Moscow want to control the flow of dollars and euros – both of which are convertible currencies. While there are private Western banks working in Russia, and though there are a few Russian banks that are still connected to SWIFT, they are not controlled by the Russian government. Motivated by profit, these banks will keep the flow coming in and make use of it for their own purposes. Increasing the interest rate is pretty much all Moscow can do to address inflation. Hence why it wants to reconnect its public banks to SWIFT via the grain deal.

However, Moscow could not persuade the West to accept its terms, and it has given the West a three-month ultimatum to do so. To show that it still has some leverage in the talks, Moscow has upped its attacks on the Ukrainian ports of Odesa, Mykolaiv and Chornomorsk. (Most recently, according to the Ukrainian media, the ports of Ismail and Reni, both on the Danube, were also hit - marking a first attack on ports inside the country.) It announced that it would treat all ships going to Ukrainian ports across the Black Sea as carriers of military cargoes, called for new military drills and has declared that it has the right to block the exclusive economic zones of Black Sea region states – even those in NATO.

Black Sea Major Ports
(click to enlarge)

So far, Moscow has blocked the Ukrainian coast and, according to local sources, part of the Bulgarian economic zone – all under the pretext of holding naval exercises. By claiming it suspects all cargo going toward Ukrainian ports of carrying military cargo in support of Kyiv, Russia says it has the right to inspect ships passing through the Black Sea. This is likely why Russia blocked the perimeter within the Bulgarian economic zone: so its warships could stop commercial ships for inspection, considering the perimeter is nearby the Western coast of the Black Sea, where naval commercial traffic is still working from and into the Bosporus. It is unclear what Russia would do should a commercial ship not stop for inspection.

Russian Naval Exercise Perimeters, Jan 1 - Feb 17, 2022
(click to enlarge)

This points to a growing danger to essential Black Sea trade routes, which raises the prospect of global market instability for everything from oil to foodstuffs to fertilizers. Wheat prices have been on an upward trend for nearly a week, and the shipping and insurance industries are trying to remove the uncertainty in the market. The Lloyd's of London insurance market has already placed the Black Sea region on its high-risk list. However, on July 18, Lloyd’s insurer Ascot said the insurance facility is on pause, leaving open the possibility that Russia could re-enter the grain deal. It’s unclear what the insurer thinks after days of heavy attacks on grain facilities in Odesa and the other ports, but it is obvious that war risk premiums are increasing by the day for all shipping corridors in the Black Sea. Russia’s decision has effectively reinstalled the blockade and turned the Black Sea into a heightened-risk war zone.

For Ukraine, this has forced a massive amount of grain to be transported by river, road and rail – all of which are difficult and expensive. Right now, the primary alternative route for the grain corridor from Odesa to the Bosporus is the Romanian port of Constanta, which, like the rest of Romanian infrastructure, has grown only more important since the outset of the war. Ukrainian grains are shipped to the mouth of the Danube and, from Sulina, the load is transported further into Constanta (through the Danube and its channels) and then taken either by sea, rail or road into the market. Despite the fact that Romania modernized its infrastructure over the past year – about 2.5 million metric tons of Ukrainian grain now transit through the country, from 300,000 metric tons in March 2022 – logistical problems abound due to limited shipping and storage capacity.

While limited, Romania could still implement several enhancements to expand the flow from Ukraine and partially compensate for the collapse of the grain deal. At the moment, because of the risk posed by undersea mines and the lack of night signals on Sulina Danube Channel, ships are sailing only during the day. Furthermore, the average weight for vessels passing through Sulina is around 5,600 metric tons. By introducing night sailing, increasing vessel capacity to 15,000 metric tons, increasing use of the railway network and increasing use of the Galati port facilities on the Danube, Romania could handle up to 3.5 million metric tons more of Ukrainian grain on average each month. However, because offload capacity will largely remain the same, the result may only be greater congestion. Furthermore, with the annual crop just entering harvesting season, challenges will increase.

Importantly, Russia has reasons to escalate attacks in southern Ukraine independent of the grain deal. Moscow would prefer to reconnect with SWIFT, of course, but flexing its military muscles at a time of perceived weakness is politically valuable too. It shows the Russian people that the military is still capable despite its setbacks, and it shows the West that there are consequences if Moscow doesn’t get its way.

Black Sea Maritime Traffic, October 2022
(click to enlarge)

For its part, the West doesn’t have many viable responses. Romania and Bulgaria have improved coastal anti-ship missile capabilities, but they are still behind the curve. Delays in U.S. defense deliveries have put more pressure on coastal states in the immediate proximity of Ukraine. Turkey has an advanced naval capability, and in theory it could partner with Romania and Bulgaria (all NATO member states) to provide an armed escort for commercial ships in the Black Sea. Romania and Bulgaria are coordinating on minesweeping along the coastline, and NATO could also provide shore support. However, NATO is a military organization with a political component, much of it driven by the United States. Black Sea countries have advocated that the U.S. adopt a Black Sea strategy in the hope that NATO might follow suit. These kinds of strategies take time to develop.

Black Sea Maritime Traffic, July 2023
(click to enlarge)

Russia will use that time to its advantage. Hitting Black Sea shorelines and Ukrainian port infrastructure serves the long-term strategic goal of Russia: to destroy the most productive sector Ukraine has left, agriculture, which makes up about 40 percent of Ukraine's GDP. There are about 18 million metric tons of grain stored in the Ukrainian silos from last year –more than half of annual production – because it couldn’t get them out. The grain deal helped, of course, as did the creation of new routes through Romania and Poland, but it hasn’t been enough.

The blockade and the Russian attacks on port infrastructure make it unlikely that Ukraine will be able to move its production to the market soon either. The end result that Russia is looking to achieve is that Ukraine doesn’t participate in the international grain market this year or in the foreseeable future. Its inability to move surplus grain to the market has already killed much of the Ukrainian grain business this year.

With no industry to rely on (most was located in eastern areas now occupied by Russia) and no functioning agriculture, there isn’t much of a Ukrainian economy left. Even if the West promises to help Ukraine rebuild it, there is nothing easy in the process of socio-economic reconstruction. For Russia, making things hard in the long term is a safe way to bring Kyiv under its influence. Russia is likely to have problems of its own, so its pressure on Kyiv might be less aggressive than it would like, but its current actions are designed to be able to pressure Kyiv later, even if it loses the kinetic war.

Crafty_Dog

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Lew Rockwell
« Reply #277 on: August 14, 2023, 04:14:28 PM »
For some reason I have LR filed under the heading of "Sketchy guy"  (anti-semitism) so caveat lector:

https://www.lewrockwell.com/2023/08/no_author/global-elites-secret-plot-against-food/

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GPF: Three Seas Bloc could alleviate Uke grain crisis
« Reply #278 on: September 06, 2023, 08:54:04 AM »
September 6, 2023
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Three Seas Bloc Could Alleviate Ukraine’s Grain Crisis
A regional forum to promote connectivity could overcome Europe’s increasingly fraught politics.
By: Antonia Colibasanu
Russia appears to have moved on from the Black Sea grain initiative, notwithstanding this week’s meeting between the Russian and Turkish presidents on the deal. Moscow’s new strategy – to eliminate Kyiv’s ability to export grains and other goods from any Black Sea or Danube ports – was on display mere hours before the Sochi meeting, when Russian drones rained down on the Danube River port of Izmail in southern Odesa. Since Russia withdrew from the grain deal in July, its drone and missile strikes have destroyed nearly 220,000 metric tons of Ukrainian grain and inflicted lasting damage on port infrastructure, according to Kyiv. In other words, Ukraine is unlikely to heed Turkish President Recep Tayyip Erdogan’s advice to “soften its approach” in order to revive the agreement.

Russia’s attacks threaten to cut off Ukraine from cheap Black Sea transport routes and pressure the European Union to provide alternate land and water routes. However, the redirection of tens of millions of tons of low-cost Ukrainian grains through Europe has already overwhelmed local markets and transport infrastructure and aggravated EU farmers. The resulting grain glut threatens to widen rifts within the EU, but an informal grouping of a dozen Eastern European countries could alleviate the crisis while advancing regional economic convergence and integration.

The Growing Cost of Support

In the early days of the war, the European Union opted to permit Ukrainian grains to enter the single market duty-free and quota-free. By November 2022, five governments on the frontline of the Ukrainian grain deluge (Bulgaria, Hungary, Poland, Romania and Slovakia) appealed to Brussels to do something to help their farmers. Unbound by the EU’s stringent quality standards, Ukrainian producers and traders were dumping grain in these countries, suppressing local prices. In April 2023, the five EU states in question came to an agreement with Brussels to support their farmers and ban imports of Ukrainian grains (though transit through their territory was still permitted).

Extended once already, the ban expires on Sept. 15, but Poland and Hungary have pledged another extension – in contravention of the EU’s common trade rules – with or without the European Commission’s consent. Meanwhile, Ukraine has said it will sue the EU and member states at the World Trade Organization if they proceed with the import ban extension. (Ukraine previously accused Poland of violating WTO rules with its farm subsidies.) Such an appeal would have no short-term effect, but it would trigger lengthy and complex negotiations that could be damaging to the EU in other areas. Specifically, the EU needs flexibility and unity to make the most of the global trade restructuring that is underway, but its attempts to strike new trade agreements could be hampered if it is simultaneously locked in a high-profile dispute with Ukraine.

Meanwhile, Europe is locked in a debate over the future of the so-called Ukraine Facility, a pot of EU money intended to support Ukraine’s public finances in the short term and help fund the country’s reconstruction and modernization down the line. Politically, the program symbolizes Europe’s support of Ukraine in the face of Russian aggression and along its path toward EU membership. The European Commission is seeking to raise 50 billion euros ($54 billion) for the facility from member states. On top of this, the EU executive is asking for another nearly 50 billion euros for migration, industrial subsidies, interest on pandemic recovery debt, staffing and contingencies. Both sums are part of a revision of the bloc’s 2024-27 budget and require the approval of the European Parliament as well as member states, where one veto can derail the process.

With European Parliament elections coming in June 2024, in addition to several important elections within the member states, debates on increasing the EU budget will likely be fierce. Already the eurozone is in a technical recession, meaning its voters – geographically the farthest from the Ukrainian frontline – will have little appetite to pony up even more cash to support Kyiv. The ensuing debates could exacerbate the resurgence of populism in Europe.

An Off-the-Shelf Solution

The outcome of these budget negotiations could also influence how the EU responds to Ukraine’s need for alternative transit routes. Last year, the commission established so-called solidarity lanes to streamline border procedures and expand infrastructure and capacity, including 220 million euros spent to improve infrastructure in Germany, Poland and Romania and another 250 million euros on border links between Ukraine, Moldova and the EU. Brussels also commissioned a study to integrate the Ukrainian and Moldovan railway systems with the EU’s.

In spite of this spending, logjams remain. Because of proximity and the lower cost of waterborne shipping, most of Ukraine’s grain has been shipped through Romanian waterways, where port congestion is a persistent problem. It’s not just Ukrainian produce that is overwhelming infrastructure in Eastern and Southeastern Europe; the war has blocked Asian goods destined for Europe from transiting through Ukrainian land routes, shifting the burden onto the “Middle Corridor” through Central Asia, the Caspian Sea, the South Caucasus and eventually Southeastern Europe.

Any new European infrastructure projects, to be effective, need to be feasible and attractive to investors. The only EU instrument that is not susceptible to election season and involves the business community is the Three Seas Initiative, established in 2016. An informal political forum, the initiative brings together 12 countries that connect the Adriatic, Baltic and Black seas. It has the support of the United States, which values its economic and strategic potential. Shortly after Russia’s full-scale invasion of Ukraine, the U.S. International Development Finance Corp. struck a preliminary agreement to provide the Three Seas Initiative Investment Fund (established in 2019) with as much as $300 million to finance energy and infrastructure investments.


(click to enlarge)

It is not by chance that, ahead of the Three Seas Initiative Forum to be hosted in Bucharest on Sept. 7, it was announced that Greece will join the grouping. After all, besides intermodal infrastructure, Europe’s most important concern currently is energy security, especially regarding Russia. Until Romanian Black Sea offshore fields can start production around 2027, the U.S. is using Greek (and Polish) ports to supply liquefied natural gas to the region. In addition to hosting an LNG terminal, the Greek port of Alexandroupolis is linked to Romania’s port of Constanta via a newly renovated road.

The EU is split over political debates and still lacks effective crisis management tools, but flexible platforms such as the Three Seas Initiative could play a more important role in countering Russia’s strategy and supporting Ukraine’s reconstruction. Investment in the region not only would benefit Ukraine but also would support post-pandemic recovery and economic convergence among some of the poorer EU and NATO countries. However, success requires not just private sector appeal but also greater political appreciation of the challenges and opportunities that the war in Ukraine poses. After all, the Three Seas Initiative countries form the new containment line between the West and the East. The war is closer to them than it is to Western Europe or most of the eurozone. So is Russia, whose hybrid warfare to complicate or block Europe’s responses will not stop.

At first, the war revived NATO and to a degree united the EU. Those effects appear to be fading as the economic costs accrue, especially for the EU. This wasn’t unexpected; Central and Eastern Europe are naturally more concerned about the war in Ukraine than the rest of the Continent. Divisions old and new are appearing. Even the potential solutions appear to bypass the EU and entail cooperation among a smaller group.

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Potash
« Reply #279 on: October 10, 2023, 08:27:34 AM »
Fertilizers at risk. War-related disruption at Israel’s Port of Ashdod, located just north of Gaza, is putting about 3 percent of the global potash supply in danger. In addition, were Iran to be drawn into the conflict, it could jeopardize supplies of nitrogen-based fertilizers, since Iran is an important nitrogen exporter. Global fertilizer prices cooled this year after surging last year because of the war in Ukraine, and renewed concerns over supply could drive up prices for food and other goods.

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GPF: Panama Canal drought
« Reply #281 on: November 17, 2023, 05:04:08 PM »
November 17, 2023
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Drought Disrupts the Panama Canal
Low water levels have caused problems before, but the issue is becoming more frequent.
By: Geopolitical Futures
Panama Canal Drought
(click to enlarge)

The idea of the Panama Canal suffering from water shortages may seem counterintuitive considering that it spans just 50 miles between two oceans. However, the functioning of the canal’s lock system relies on freshwater supplies coming primarily from the manmade lakes Gatun and Alajuela. Due to a lack of rain, the Panama Canal Authority this year has implemented several water conservation and canal restriction measures to accommodate lower water levels, and bids to secure passage have hit record highs.

Droughts have threatened to disrupt the canal’s operations at other times in recent memory, namely 2019-20 and 2014-16. What is concerning is that droughts have been occurring more frequently. Reduced traffic at the canal is expected to last for at least another four months, sparking concerns about supply chains and inflation.

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MY: They are coming for the fertilizer
« Reply #282 on: December 01, 2023, 05:51:30 AM »
Important— I went to Groningen, NL in March warning they may shut Groningen gas field. Groningen is biggest gas field in Europe. And now they shut Groningen. This is in part to create famine by shutting down nitrogenous fertilizer production. Now they going for USA: https://foxnews.com/politics/un-delegates-circulate-petition-shut-down-us-natural-gas-production-global-climate-summit-kicks-off

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Re: PanFa War; Supply Chain, and Sabotage of Food Supply
« Reply #283 on: January 03, 2024, 07:16:22 AM »
anuary 3, 2024
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What Red Sea Disruption Means for Global Supply Chains
It’s far from business as usual for global shipping.
By: Antonia Colibasanu


The Red Sea is a vital waterway for commercial shipping that connects markets in Europe, Asia and Africa. In recent weeks, however, it has been the site of multiple attacks launched by Yemen’s Houthi rebels in support of Hamas in its war with Israel. The group claims to target only ships leaving from or going to Israel, but others with no clear Israeli connections have been attacked while sailing through the sea. On Dec. 18, the U.S. announced that it would set up a task force to strengthen security in the area. But as Washington calls for more governments to contribute to the effort, the Houthis say the attacks will continue.

The Red Sea is a sort of junction between the Indian Ocean and the Mediterranean Sea that separates the Arabian Peninsula from the Horn of Africa. It’s connected to the Indian Ocean through the Bab el-Mandeb strait, one of the most critical chokepoints in the world. Three countries occupy the coastline along the strait: Eritrea, Djibouti and Yemen. Djibouti hosts military bases from several foreign countries, including the United States, the United Kingdom, China and Saudi Arabia, while Eritrea maintains close ties with China and Russia. (It voted recently against a U.N. resolution to stop the conflict in Ukraine.) Yemen, meanwhile, is engulfed in a brutal, eight-year war between the internationally recognized government, supported by a Saudi-led military coalition, and the Iran-backed Houthi rebels.

The Red Sea

(click to enlarge)

In 2014, Houthi insurgents overthrew Yemen’s government. The following year, the Saudis led a coalition of mainly Gulf Arab states to oust the Houthis – which was ultimately unsuccessful. The country has remained divided ever since, with the Houthis controlling much of the north, the government holding the seat of power from the southern city of Aden, and several other armed factions pursuing their own agendas. Peace negotiations have been held but have so far failed to result in a deal.

Iran’s partnership with the Houthis, including its supply of weapons, has grown deeper since 2014. But this isn’t a typical patron-client relationship. The Houthis are financially self-sufficient, earning revenue through taxation, customs charges and service fees, as well as smuggling operations. They’re seeking international recognition as a legitimate military and political force in Yemen – a goal they can’t accomplish solely with Tehran’s help. Yet they’re undeniably a proxy of the Iranian regime, which has supported them throughout the Saudi-led campaign. The group is thus an unpredictable force and major source of uncertainty, especially since the war in Israel began.

The danger to shipping through the Red Sea adds another layer to global economic challenges in 2024. An estimated 10-12 percent of global trade passes through the sea. While the Bab el-Mandeb lays on its southern tip, the Suez Canal sits on its northern edge as a pathway to the eastern Mediterranean. The 120-mile-long (190-kilometer-long) artificial waterway runs along the Isthmus of Suez, a small strip of land that connects the African and Asian continents. Approximately 14 percent of global oil exports pass through the canal, while more than 30 percent of global container traffic is conducted through the Red Sea.

Since the Houthi attacks began, some ships have tried to broadcast their neutrality in an effort to pass safely through the route. Others are now avoiding the area altogether. Oil giant BP recently stopped all Red Sea shipping operations. European shipping companies Hapag-Lloyd and MSC, as well as Japanese shipping firms Mitsui O.S.K. Lines and Nippon Yusen, are also avoiding the sea. On Tuesday, Denmark's Maersk announced that it would divert its container ships away from the Red Sea following an attack over the weekend on one of its vessels – though it had said late last month that it would resume transit through the region after the U.S. announced the establishment of a naval force to protect commercial shipping. France's CMA CGM said on its website that it would increase its container shipping costs from Asia to the Mediterranean region by up to 100 percent as of Jan. 15 compared to Jan. 1.

Either way, international shipping has taken a hit, fueling new concerns over the global economy. The most obvious worry is that the situation could cause a spike in energy prices, given that the region is a major exporter of oil to markets around the world. According to S&P Global, 24 percent of the vessels redirected from the Suez Canal since Dec. 15 were crude oil tankers. Bulk carriers accounted for about 35 percent and container ships were another 24 percent.

Approximately 90 percent of the oil that flows through the Bab el-Mandeb comes from the Persian Gulf and is destined for Europe and Africa. The other 10 percent is oil from the Horn of Africa. The Red Sea is also a transit route for roughly 80 percent of Russia’s petroleum destined for Asian markets and 8 percent of the global liquified natural gas trade. In the first 11 months of 2023, 42 percent of Russian-loaded crude and products traveling through the Red Sea.

Bab el-Mandeb Transit Calls: October-December 2023

(click to enlarge)

However, the situation isn’t as problematic for Moscow as it may appear; none of the attacks in December targeted Russian shipments, and Russia will benefit from the increased oil prices that will likely result from higher transport costs. The price of carrying oil through the Red Sea has jumped by about 25 percent, while the alternate route along the Cape of Good Hope is not just longer but also 10 percent more expensive than before the attacks. One industry analyst estimates that rerouting vessels destined for Europe from the Red Sea to the Cape of Good Hope could raise shipping costs by 80 percent.

Europe stands to lose the most from higher energy prices. As it tries to transition away from Russian energy, it’s relying more heavily on LNG. Most of the LNG flowing through the Bab el-Mandeb and the Suez Canal is headed for Europe. The good news so far is that Qatari LNG supplies to Europe continue to pass through the Red Sea and Suez Canal without any diversions. European gas prices increased by more than 10 percent after BP ceased shipments via the Red Sea on Dec. 18, but prices have declined since then. European underground gas storage facilities are now 97.89 percent full, and the winter so far has been mild. However, the situation is still fluid as the Houthis continue to launch more assaults.

Supply chains for other sectors have also experienced disruptions. Given that the Red Sea is used for transporting commodities and other resources between large markets, disruptions in traffic here can have serious economic effects. This is especially the case at the moment because a severe drought has reduced traffic via the Panama Canal, causing U.S. grain shipments destined for Asia to take lengthy detours through the Suez Canal and southern Africa. The number of vessels passing through the Panama Canal daily has fallen by nearly 40 percent, resulting in significantly longer wait times – and longer journeys, which directly influences freight costs and product pricing.

The Panama Canal Authority said on Dec. 15 that it would increase daily transit through the canal from 22 vessels to 24 in January due to increased rainfall and water levels. But even this figure is well below normal volumes. Rerouting though the southern tip of Africa is also costly. A ship traveling from Asia to Europe via the Suez Canal would require an extra 15 days to make the journey via the Cape of Good Hope, plus additional time to navigate new operational costs, insurance and legal frameworks.

Shipping companies are now not only diverting their vessels from the Red Sea but will likely have to renegotiate insurance contracts due to the added risks. The lengthy alternate journeys are straining shipping capacity during the peak shipping season for U.S. grain – most of which was traveling through the Panama Canal but is now also rerouted because of the drought – aggravating the situation even more. The uncertainty will undoubtedly translate into higher costs and, if this continues, even higher inflation. It’s also exacerbating the global supply chain disruptions that were already in effect throughout last year, making calls for deglobalization even louder.

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French Farmers vs. Police
« Reply #284 on: February 01, 2024, 05:52:24 PM »

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Re: PanFa War; Supply Chain, and Sabotage of Food Supply
« Reply #286 on: February 05, 2024, 11:40:09 AM »
Good point pairing the supply chain issues of Panama and Suez at the same time.

I would add the Chinese capabilities at both ends of the Panama Canal, and note MY's point about the Chinese military age males having way stations as they move north from the Darien Gap to the American non-border.


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GPF: Euro farmers pist off
« Reply #287 on: February 24, 2024, 07:40:05 AM »
February 23, 2024
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European Farmer Protests
With European elections looming, politicians are scrambling to respond to farmers' demands.
By: Geopolitical Futures
European Farmer Protests

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Farmer protests have recently surged across Europe, shaking its agricultural heartlands. In Poland, a deep and broadening coalition of farmers is forming against the influx of cheaper, reputedly lower-quality Ukrainian agricultural goods that are threatening their markets. Farmers in the Netherlands were agitated even before the war in Ukraine, triggered by Dutch government plans to cut nitrogen emissions. In Germany, the last straw was when Berlin, under intense political pressure to start balancing the budget, suggested axing fuel subsidies for farmers. Taken together, European farmers are facing rising costs against falling prices; they fear that pro-climate laws will lead to their disenfranchisement; and they feel they are suffering disproportionately from Europe's approach to supporting Ukraine's wrecked economy.

The approaching European Parliament elections in June have started to energize the European Commission and national governments, which lately have been quick to make concessions to get tractors off the highways. But the farmers are not satisfied, and opposition parties – most notably those from the far right – are hoping to benefit, starting this summer.

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GPF: Euro Farmers Pist Off
« Reply #288 on: February 24, 2024, 07:40:34 AM »
February 23, 2024
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European Farmer Protests
With European elections looming, politicians are scrambling to respond to farmers' demands.
By: Geopolitical Futures
European Farmer Protests

(click to enlarge)

Farmer protests have recently surged across Europe, shaking its agricultural heartlands. In Poland, a deep and broadening coalition of farmers is forming against the influx of cheaper, reputedly lower-quality Ukrainian agricultural goods that are threatening their markets. Farmers in the Netherlands were agitated even before the war in Ukraine, triggered by Dutch government plans to cut nitrogen emissions. In Germany, the last straw was when Berlin, under intense political pressure to start balancing the budget, suggested axing fuel subsidies for farmers. Taken together, European farmers are facing rising costs against falling prices; they fear that pro-climate laws will lead to their disenfranchisement; and they feel they are suffering disproportionately from Europe's approach to supporting Ukraine's wrecked economy.

The approaching European Parliament elections in June have started to energize the European Commission and national governments, which lately have been quick to make concessions to get tractors off the highways. But the farmers are not satisfied, and opposition parties – most notably those from the far right – are hoping to benefit, starting this summer.

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FO: Chinese potential for choking medicine and fertilizer
« Reply #289 on: March 21, 2024, 03:37:49 PM »


(1) LAWMAKER CONCERN GROWING ON MEDICINE SHORTAGES: In a bipartisan letter to the Department of Defense, Senators Elizabeth Warren (D-MA) and Marco Rubio (R-FL) said drug shortages in the U.S. have reached their highest level in ten years and supply chain disruptions due to drug maker quality failures is a growing concern.

According to the letter, in many cases, only a handful of drug companies make a particular generic drug, increasing the risk of widespread supply chain disruptions if even a few companies experience quality or manufacturing issues.

Why It Matters: Lawmakers are growing more concerned over ongoing shortages of key medicines and precursors that are dependent on Chinese and Indian labs and drug makers. A conflict between the U.S. and China, which officials expect as soon as 2027, would likely remove more than half of medicines and precursors from the U.S. market due to supply chain disruptions or Chinese export blocks. – R.C.

(2) GALLAGHER: CHINA WAGING DAILY ECONOMIC WAR ON U.S.: During a House hearing on the Farm Bill, Representative Mike Gallagher (R-WI) said the Chinese Communist Party (CCP) is “engaged in economic warfare against the United States daily,” and “agriculture and our critical food supply chains are no exception.”

Former Ambassador to the U.N. Tom Kip said the U.S. is increasingly vulnerable to disruptions from the gradual offshoring of key agricultural pesticides and crop nutrients. China now produces 40% of phosphate and 28% of nitrogen globally.

Why It Matters: U.S. agricultural inputs, like nitrogen fertilizer, are sensitive to supply chain disruptions due to Chinese market share. China would likely block nitrogen and phosphate exports to the U.S. during a conflict, disrupting a U.S. response by crippling critical infrastructure and hitting domestic agriculture production. – R.C.

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Bird flu jump from cattle to human
« Reply #290 on: April 02, 2024, 11:21:30 AM »


(2) TEXAS REPORTS FIRST BIRD FLU JUMP FROM CATTLE TO HUMAN: The Texas Department of State Health Services reported the first human infection of avian influenza (H5N1), which authorities believe was transmitted from cattle infected with H5N1.
“Every single time is a little bit of Russian roulette,” and eventually H5N1 will adapt to spread among humans, former Biden official Ashish Jha said.
Brown University Pandemic Center director Jennifer Nuzzo said authorities have been concerned about H5N1 for more than twenty years, and it is “remarkable” how far across the globe H5N1 has spread over the last year.
Why It Matters: The Centers for Disease Control and Prevention (CDC) say the human infection risk is still low, but their assessment could change if more cases of cattle-to-human transmission are discovered. If H5N1 does mutate to allow cattle-to-human and human-to-human transmission, the case fatality rate is the most significant concern. The World Health Organization is tracking global H5N1 human infections, and they say the case fatality rate is above 50%. The situation is still developing but could become a food security threat due to the vulnerability of U.S. food supply chains to biosecurity threats. – R.C.

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FO: Chinese have us by the short hairs
« Reply #292 on: Today at 08:17:32 AM »
(1) U.S. TO REMAIN RELIANT ON CHINA FOR MINERALS IN THE FUTURE: During a House Energy and Commerce Committee hearing, Rep. Cathy McMorris-Rodgers (R-WA) said America’s capacity to mine, process, and refine critical minerals has been decimated over the last several decades, making the U.S. reliant on imports from China and vulnerable to supply chain disruptions.

According to Rep. Gary Palmer (R-AL), the Biden administration and some members of Congress “have deployed some of the dumbest, most dangerous policy in the history of this country,” which has created choke points in the critical mineral supply chain.

Rep. John Joyce (R-PA) said China controls 90% of global critical mineral processing, and if China halted critical mineral exports, it would “cripple” the U.S. economy overnight.

Hunton Andrews Kurth partner Martin Stratte said the U.S. does not have a complete critical minerals supply chain due to mining permitting challenges, which have a chilling effect on domestic critical minerals production.

Why It Matters: China’s control of critical mineral processing is very likely more important than China’s control of 47% of global mining rights. An increase in domestic mining alone would still very likely leave the U.S. critical mineral supply chain reliant on Chinese processing. In the event of a crisis or conflict with China, supply chain disruptions would very likely hurt attempts to shore up U.S. critical energy infrastructure and would very likely hit U.S. defense production, which relies on Chinese critical minerals. – R.C.

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Re: PanFa War; Supply Chain, and Sabotage of Food Supply
« Reply #293 on: Today at 10:32:31 AM »
CD,
I have to ask you what is "FO"

I keep thinking "far out"

you post this a lot.


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Re: PanFa War; Supply Chain, and Sabotage of Food Supply
« Reply #294 on: Today at 01:50:25 PM »
LOL--  Forward Observer.   Just too damn lazy to write it out  :-D