Commodities
Venezuela’s rice, corn production rise as buyers loan farmers supplies
By Mayela Armas and Vivian Sequera
TUREN, Venezuela/CARACAS (Reuters) – More than 300 hectares (740 acres) of verdant corn and rice planted by Roberto Latini in the western Venezuelan state of Portuguesa undulate under a bright sun and blue sky.
The growing crops – set to be harvested in September – were able to be planted only because Latini got funding for fertilizers and seeds from an agriculture guild, which has stepped in to front funding for farmers in the economically beleaguered country.
Venezuelan growers of rice and corn – staple crops for domestic consumption – have reversed a years-long slump in production thanks to loans of fertilizers and seeds from buyers, which are freeing up funds to invest in generators and other efforts to fight utility cuts, a dozen farmers said.
The loans – from at least six guilds in Portuguesa and 20 crop-buying groups nationally – come amid tight credit restrictions, which make traditional loans from banks nearly impossible to ink, and inflation of over 50%.
“One survives with the support of the guilds which offer the fertilizers,” Latini said as he gave a tour of his farm, adding output could grow more with more funding availability.
The terms of the loans, often paid back with the harvest itself, can still be prohibitive for some small growers.
Without more regular financing from banks, farmers told Reuters challenges will persist and some producers could shut their operations.
Agricultural production in Venezuela, which largely relies on national food output, has plummeted in the last decade after years of price and currency controls, land nationalizations, lack of fuel and failures in public utilities.
President Nicolas Maduro loosened currency restrictions in 2019, allowing transactions in dollars and giving the economy some breathing room. He has also employed an orthodox effort to reduce inflation with credit restrictions and lower spending.
Though “forward selling” of crops is common in other Latin American countries like Brazil, the practice is new and growing in Venezuela, local agricultural experts told Reuters.
Bank loans available to farmers in Venezuela total about $330 million, according to local consulting firm Globalscope. Much of that funding goes to producers of small-scale export crops like sesame and mung beans.
Credit availability is between nine and 12 times that figure in Bolivia and Colombia, according to government figures in those places.
“There is no protection for the (agriculture and ranching) sector in finance,” said Gerardo Mendoza, head of local agricultural consultancy Agrotributos.
The communications, agriculture and finance ministries did not respond to requests for comment. Neither did the central bank.
PAYBACK WITH CROPS
Output of rice and white corn was up to 1.2 million metric tons last year, 29% more than in 2022, though that boost is still leagues below production of 3.4 million tons a decade ago, according to agriculture guild figures.
Giorgio Ruffato, also a grower of rice and corn in Portuguesa, represents one association helping fund farmers.
“We give them seeds, insecticides, help with machinery repairs and services to store their harvest,” he said at his farm, which includes a small laboratory where he checks for crop damage from pests or fungi.
Producers pay back loans by handing over their harvest or with their earnings from selling to processing plants, who pay them for crops in dollars based on international prices.
But some small producers still do not earn enough to pay back the guilds.
“Many small producers will disappear, some of us are in debt (to associations or companies),” said farmer Cesar Tovar, who sold some machinery to cover his costs.
Higher costs for producers, coupled with 12-month inflation of 51.3%, could trickle down to consumers.
“Any different form of credit is onerous. If you add (public) services and taxes, all that can have an impact on prices,” said economist Hermes Perez.
Some farmers are making large investments in roads and back-up power sources because of poor infrastructure and frequent cuts to water and electricity.
“We have had to take up solar panels which charge batteries,” said Luis Hernandez, a grower in the state of Apure, who has trouble getting fuel.
Latini uses transformers on his land to keep watering for rice plants working even with power cuts, while Ruffato has repaired some local roads to be able to transport crops.
Investing.com– Gold prices hit a record high in Asian trade on Monday amid growing bets that the Federal Reserve will cut interest rates by a bigger margin later this week.
Reports of a second assassination attempt on Republican presidential nominee Donald Trump also spurred some demand for safe havens, although Trump appeared to be unharmed, and the assailant apprehended.
Asian trading volumes were somewhat limited by market holidays in Japan, China, and South Korea.
rose 0.4% to a record high of $2,589.02 an ounce, while expiring in December rose 0.1% to $2,613.70 an ounce.
Gold benefits from rate cut bets as Fed looms
A softer allowed for more strength in gold prices, as markets awaited a Fed meeting.
The central bank is widely expected to on Wednesday, although markets are split between a 25 or 50 basis point cut.
showed markets split exactly 50% over the two options, with bets on a bigger cut coming back into play on concerns over weakness in the labor market.
The central bank is also expected to kick off an easing cycle from this week, with analysts expecting at least 100 bps of rate cuts by the end of the year.
Lower rates bode well for precious metals, given that they reduce the opportunity cost of investing in non-yielding assets.
rose 0.4% to $1,004.80 an ounce, while rose 0.8% to $31.332 an ounce.
Trump assassination attempt spurs some safe haven demand
Gold saw some safe haven demand after reports of a second assassination attempt on Trump, this time at his golf course in Florida.
But secret service agents foiled the attempt in a reported shootout with the assailant, who was later apprehended by authorities. Trump was unharmed during the event, stating as much in a message on his fundraising website.
Copper prices steady after weak Chinese data
Among industrial metals, copper prices benefited from a softer dollar. But gains in the red metal were held back by a string of weak economic readings from China, the world’s biggest copper importer.
Benchmark on the London Metal Exchange rose 0.1% to $9,276.0 a ton, while one-month rose 0.1% to $4.2225 a pound.
A string of data released from China over the weekend showed and grew less than expected in August, while rose and fell.
The readings ramped up concerns over an economic slowdown in the country, which could bode poorly for its appetite for copper. But ANZ analysts said that the government could now have more impetus to release stimulus measures.
By Robert Harvey
LONDON (Reuters) -Oil prices edged higher on Monday as ongoing disruption to U.S. Gulf oil infrastructure balanced persistent demand concerns after a fresh round of Chinese data while investors await a likely cut to U.S. interest rates this week.
futures for November were up 46 cents, or 0.64%, at $72.07 a barrel by 1207 GMT. futures for October rose 52 cents, or 0.76%, to $69.17.
The market is likely to remain cautious until the Federal Reserve makes its interest rate decision on Wednesday, said Phillip Nova analyst Priyanka Sachdeva, adding that prices are still supported by some supply worries given that some capacity remains offline in the Gulf of Mexico.
Traders are increasingly betting on rate cut of 50 basis points (bps) rather than 25 bps, as shown by the CME FedWatch tool that tracks fed fund futures.
Lower interest rates typically reduce the cost of borrowing, which can boost economic activity and lift demand for oil.
However, a cut of 50 bps could also signal weakness in the U.S. economy, which could raise concerns over oil demand, said OANDA analyst Kelvin Wong.
Saxo Bank analyst Ole Hansen, meanwhile, said activity is likely to remain light ahead of the Fed meeting, adding that the outcome “looks like a coin toss between 25 and 50 bps”.
Nearly a fifth of crude oil production and 28% of output in the Gulf of Mexico remains offline in the aftermath of Hurricane Francine.
Weaker Chinese economic data released over the weekend dampened market sentiment, with the low-for-longer growth outlook in the world’s second-largest economy reinforcing doubts over oil demand, IG market strategist Yeap Jun Rong said in an email.
Industrial output growth in China, the world’s top oil importer, slowed to a five-month low in August while retail sales and new home prices weakened further.
Oil refinery output also fell for a fifth month as weak fuel demand and export margins curbed production.
Brent and WTI each gained about 1% last week but remain comfortably below their August averages of $78.88 and $75.43 a barrel respectively after a price slide around the start of this month driven in part by demand concerns.
Investing.com — Oil prices rose Monday, benefiting from ongoing disruption to U.S. Gulf oil production as well as a softer dollar ahead of an expected interest rate cut by the Federal Reserve later this week.
At 08:05 ET (12:05 GMT), rose 0.7% to $72.11 a barrel, while rose 0.8% to $68.30 a barrel.
Rate cuts in focus as Fed meeting looms
A softer was the biggest point of support for oil prices, as markets positioned for an from the Fed on Wednesday.
The central bank is likely to kick off an easing cycle, although traders are split over a 25 or 50 basis point cut.
Still, lower rates bode well for economic growth, which in turn could help keep U.S. fuel demand supported in the coming months.
Continued disruption in Gulf of Mexico
Also helping the tone was the continued disruption of production in the Gulf of Mexico following the arrival of Hurricane Francine.
Nearly a fifth of crude oil production and 28% of natural gas output in U.S. Gulf of Mexico federal waters remains offline, the U.S. offshore energy regulator said on Sunday.
Francine hit Louisiana as a Category 2 hurricane on Wednesday, eventually cutting power in four southern states.
Chinese economic data underwhelms
But gains were capped by persistent concerns over slowing demand, especially following a slew of weaker-than-expected economic data from China over the weekend.
and both missed expectations, while rose and fell.
The readings ramped up concerns that slowing economic growth in the world’s biggest oil importer will dent its appetite for crude.
Analysts at ANZ said Beijing was likely to roll out more stimulus measures to help support local economic growth, although they still expect gross domestic product to come below the government’s 5% target in the third quarter.
Concerns over China saw both the Organization of Petroleum Exporting Countries and the International Energy Agency slash their outlook for oil demand growth in the current year.
Holidays in China and Japan also kept trading volumes relatively slim.
(Ambar Warrick contribute to this article.)
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