Food and Beverage Price Index: Four Charts to Watch - April 2024

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A snapshot of the latest occurrences across agriculture commodity markets.


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A guide to navigate Commodity Insights LIVE: SAF and Jet Fuel in an age of transition

S&P Global Platts published its first jet fuel prices more than 50 years ago. Even though the aviation industry has changed considerably since then, our real-time news, market reports, analysis, price assessments and fundamental data continue to provide a valuable reference point for jet fuel buyers and sellers. This page helps you navigate the latest news, insights and interactive content from S&P Global Commodity Insights and our partner IATA. News UK SAF policies put uptake targets at risk: aviation leaders INDIA ELECTIONS: Policy incentives in spotlight to drive biofuels transition Fuels of the future: Unpacking the pathway for advanced fuels in Brazil Interactive Interactive: Platts SAF-Jet Fuel blend price The future for SAF with the IATA Aviation Energy Forum on the horizon Jet Fuel considerations with IATA’s Forum on the horizon Harnessing CO2 for Production of Sustainable Fuels Perspectives with Nicholas Flanders Series LIVE Markets and price assessments LIVE Markets Homepage Sustainable Aviation Fuel CIF ARA Platts Global Transportation Fuels Index World Jet Indexes IATA Jet Fuel Price Monitor Meet the Team If you would like more information on SAF/Jet Fuel please do reach out to our S&P Global Commodity Insights experts: Sophie Byron, Global Director of Biofuels Pricing , will be presenting in an afternoon workshop on “How the Price of SAF is Assessed”. Sophie brings extensive expertise in price assessments for SAF and other biofuels, spearheading the application of the Platts methodology in Biofuels pricing, and playing a pivotal role in the development of the Platts eWindow for SAF. Gary Clark, Associate Director of European Clean & Refined Products , will kick off the commercial session on Thursday morning with a discussion “Explaining Jet Fuel Prices – Regional Variations & Medium to Long-Term Forecast” Gary specializes in European middle distillate pricing and offers analysis of diesel, gasoil, and jet fuel markets, among others, while ensuring adherence to Platts pricing methodology. Debnil Chowdhury, Executive Director of Refined Products Market Research , will be hosting a closed breakfast event for industry leaders to discuss “The Security of Future Jet Supply”. Debnil leads a dedicated team focused on research and analysis of global downstream oil markets, with a keen emphasis on evaluating the supply, demand, and transportation of oil products, including jet fuel. In addition to these esteemed speakers, other S&P Global Commodity Insights Market Experts attending include: Adam Probert – Director, eWindow Global Markets , who oversees the Platts eWindow platform and is instrumental in supporting futures contracts against Platts prices for various commodities, including Jet Cargoes and Derivatives, among others. Adam is currently spearheading the development of the Platts eWindow for SAF, slated for launch later this year. Ina Chirita – Associate Director, Biofuel Value Chain Service (BVCS) , specializing in European biofuels regulation and providing invaluable insights into the SAF market through the BVCS's long-term forecasts for biofuels demand, supply, and prices. James Simpson - Senior Aviation Specialist , who focuses on critical aviation issues, including SAF projects, substitutes for SAF, and aviation strategy, bringing extensive knowledge and experience to the table. We look forward to the opportunity to engage with you during the IATA Aviation Energy Forum and exchange ideas that drive innovation and progress in the aviation energy sector.


Infographic: Bleak manufacturing forces European petrochemical closures

European petrochemical margins face challenges from overcapacity and weak steam cracker margins. Concerns about offshoring the industry persist, as limited capacity cuts may not be enough to offset the impact of new capacity additions. Read more here. This infographic provides a visual representation of the numerous closures occurring in Europe's petrochemical plants, highlighting the challenges posed by weak manufacturing, high input costs, and unfavorable naphtha cracking margins. Click to see the full-size infographic


Black Sea, Canadian wheat prices surge on weather, crop fears

Russian wheat rises to highest level since January 2024 Dry weather forecasted in Ukraine for next two weeks Canadian wheat strengthens on Black Sea fears, rail strikes Wheat prices in the Black Sea and Canada have reached their highest levels in months as adverse weather and crop reductions have been observed in the Black Sea region in recent weeks. Cold weather followed by frosts in Russia since early May has severely damaged wheat crops, resulting in lower wheat production estimates in the marketing year 2024-25 (July -June). The northern and western parts of Europe -- Italy, France and Germany -- have also been hit by heavy rainfall and storms, posing further risks to winter crops as well as spring crop planting. While the next two weeks are expected to bring dry weather in Ukraine likely reducing wheat production for 2024-25. This season is more volatile because the weather and crop concerns are all happening at once in different countries, multiple traders said at the annual GrainCOM conference in Geneva. Russian wheat prices began to rise in March 2024, after hitting the lowest level since 2020. Platts, part of S&P Global Commodity Insights, assessed FOB Russian wheat 12.5% at $245/mt on May 22, the highest price level since Jan. 5, when at the time the winter weather created operational issues at the Kavkaz port. Russian wheat prices increased 25% starting in the second week of March and even more dramatically in the last two weeks, rising from $219/mt May 7 to $245/mt May 22. Commodity Insights' forecast for Russian wheat production was cut by 5.6 million mt to 85 million mt for MY 2024-25. Similarly, Russia's agricultural consultancy Institute of Agricultural Market Studies, on May 21, lowered its wheat crop forecast to 83.5 million mt for the same period, down from 86 million mt estimated May 13. Most traders are closely monitoring Russia's wheat output projection, anticipating further price increases and major export challenges if the 2024 Russian crop falls below 80 million mt, traders said at the conference. "If Russian wheat production reached below 80 million mt, it would be a big problem," a buyer said at the conference. "Most buyers are waiting and seeing, until the very last second," another trader added. In France at 1530 GMT, the September MATIF contract was trading at Eur260.25/mt on May 22, an increase of 6%, in the past two weeks, May 7-22. Similarly in the FOB CVB 11.5% and 12.5% market, prices are at the highest levels since last summer July 2023, Platts data showed. Commodity Insights' forecast for EU and Ukraine wheat production was left unchanged at 129.5 million mt and 22.5 million mt for MY 2024-25. "Major concerns are for winter wheat and rapeseed, while spring and summer crops still have time to establish," analysts at Commodity Insights said. Canadian wheat hit multi-month highs A similar trend was observed in Canadian wheat as prices began an uptrend in early April 2024 after hitting a multiyear low. Platts assessed FOB Vancouver 13.5% CWRS wheat at $314.07/mt for May 21, the highest level seen since December 2023. The Canadian wheat market was slowed over the winter when farmer sales were few and demand was weakening. While those in the market were optimistic about planting conditions and crop expectations for Canadian western red spring wheat, adverse weather and crop reductions in the Black Sea region were causing 13.5% CWRS wheat FOB Vancouver prices to rise to multi-month highs, as Minneapolis spring wheat futures remained reactionary to global news and forecasts. A potential rail strike in Canada slated for May or June contributed to higher spot prices for Canadian wheat as well. Demand for 13.5% CWRS wheat from the Black Sea region was minimal and typically only as a substitute for other grades of wheat used for blending purposes, participants at the GrainCOM conference said. "FOB Vancouver prices are quite high right now, so interest is very minimal," sources at GrainCOM said. Canadian wheat production was forecast at 36.7 million mt for MY 2024-25, according to analysts at Commodity Insights.


UK SAF policies put uptake targets at risk: aviation leaders

2030 target in jeopardy due to late revenue mechanism launch Limited indigenous production and feedstock constraints Demand for SAF looks healthy Measures announced by the UK government to support production of sustainable aviation fuel may not be enough to meet the government's demand targets , according to aviation industry leaders. In 2025, the SAF target is 2% of the total fossil jet fuel supplied. The government said this is approximately equal to 230,000 mt of SAF. This will increase annually to 10% in 2030 and 22% in 2040. One leg of UK policy is a SAF price certainty mechanism, to ensure the price does not fall below a certain threshold and thereby undermine investment plans. By some calculations this will not come soon enough. "I think the frustrating element of that piece of the jigsaw is that it's going to come by 2026 and if [it came] earlier I think we would get plants built in the UK sooner," Sean Doyle, CEO of British Airways said at the Sustainable Skies 2024 conference May 15-16. A guaranteed strike price will ensure a pre-agreed price of SAF supplied to the UK market, giving producers the confidence that they will receive a certain price for the SAF they make, the government said in April. However, the time at which it kicks in may leave too tight a timeframe to deliver for the uptake 2030 target, Julie Kitcher, chief sustainability officer at Airbus said. "From the time a SAF plant begins producing meaningful SAF we're talking three-five years. So... if you've got a revenue mechanism that doesn't come in until after the target dates for the SAF plants that we are after it is potentially not soon enough to attract investors," she said. The government has announced a GBP165 million ($210 million) advanced Fuel Fund, which it has said is already helping to deliver on its targets of at least five commercial SAF plants under construction in the country by 2025. Yet while the mandates ensure demand, supply still looks short and the five plants won't be ready, Shai Weiss, CEO of Virgin Atlantic, said. "The evidence is we are not doing a great job in this country of indigenous [production]," Weiss said. Falling short "The revenue certainty mechanism is welcome news for UK SAF producers and should help in pushing some speculative SAF projects into fruition by securing investment with fewer uncertainties," George Duke, a consultant at S&P Global Commodity Insights said. Prospective UK SAF total production capacity, including speculative projects at an 80% plant utilization rate, implies the UK would have a total SAF production capacity of 702,000 mt in 2030, according to figures from Commodity Insights. However, Commodity Insights expects UK jet fuel demand to be close to 13.43 million mt in 2030, meaning that under the terms of the 10% target UK SAF demand will be 1.34 million mt. "Ultimately, this would mean the UK market would be short of SAF by 2030," Duke said. Prices and feedstock Demand for SAF does not look like a problem. "Every drop of SAF that was produced last year was consumed... If we've got SAF at an affordable price we will put it in the tank," Kitcher said, adding that the problem is availability. Platts, part of Commodity Insights, assessed SAF on a CIF basis at Amsterdam-Rotterdam-Antwerp at a $1,600/mt premium to jet CIF cargoes in Northwest Europe May 20, down from $1,996/mt at the start of the year. Feedstock makes up the lion's share of SAF's costs, with an increasing pool of competitors across industries scrambling to secure volumes in order to meet their own decarbonization goals. The UK's mandate includes a cap on SAF derived from hydro-processed esters and fatty acids (HEFA). As a process that converts waste and vegetable oils into aviation fuel, HEFA is the main commercially available SAF technology pathway as higher-cost, power-to-liquid, hydrogen-based SAF fuels are developed. HEFA accounts for more than 90% of European production. The UK has warned that finite feedstocks mean the sector cannot rely on HEFA technology alone and has capped its use for SAF production from 2030. HEFA will be capped at a 71% contribution to SAF demand in 2030 and 35% by 2040, allowing some 1 million mt of SAF to be supplied from HEFA annually from 2035, the government has said. In order to drive innovation and diversification, the government said a separate obligation on power-to-liquid fuels would be introduced from 2028 and would reach 3.5% of total jet fuel demand in 2040.