Trading summary for 2010

2010 posed a number of challenges for the on-line marketing  and trading business.

Petroleum continued to be robust. It also attracted so-called “agents” who saw it as a way for making easy money while having little or no knowledge of the industry. Coupled with shysters and time wasters it proved a mine-field for genuine buyers and sellers alike. Another problem were re-sellers who decided commissions were not enough and tried to be buyer and seller at the same time.

The sugar harvest failed in early 2010, particularly in Pakistan. This caused the sugar price to spiral upwards, sometimes on a weekly basis. Brazil was able to supply sugar but many buyers were shocked at the prices being quoted. It is expected that in 2011 the price will begin to drop as a better harvest is expected around the world.

Wheat was another product which suffered from poor harvests. Russia actually banned the export of wheat to protect the local market. So not only was the price high, but supplies were also hard to find.

The wheat shortage created pressure on rice supplies. While rice was relatively plentiful the market didn’t miss the opportunity and prices rose to very high levels. Even Vietnam was asking prices far higher than normal as people chased a wheat alternative.

So that was 2010. Food shortages and high prices being par for the course... what will 2011 have in store for us. 

Contact Sutlet Group for more information on trends and activities in the global trading world, we specialise in facilitating agreements for petroleum, iron ore, wheat, rice, sugar, chemicals and coal. Learn more at our website.

Posted by Haydn Leseberg, Trading Manager, Sutlet Group
Edited by Stuart Blott, General Manager, Sutlet Group

Beware, it’s in the detail.

The internet has made it easy for legitimate companies to buy and sell petroleum. The problem is that it has also made it easy for illegitimate companies to operate. It has gotten to the point where buyers and sellers are wary of anyone who deals in petroleum products.

However it is possible to find real sellers, if one is prepared to look. But, as the heading warns, the traps are in the detail. Always be on the guard because the illegitimate buyers and sellers out there have more tricks up their sleeve than a circus magician. Here are some tips to stay ahead of them.

1.      When you get the SCO check the procedures. Be on the lookout for requests for fees/charges in addition to the actual cost of the product. Commonly this will be fees for contract registration or transfer of title. These should be included in the cost of the product already and is a good sign that this deal is one to be avoided.

2.      When you receive the FCO check the wording against the SCO. Many buyers will assume the wording to be the same. Often this has been changed in small but important way and they will also set a tight turnaround time for a buyer to return the FCO, giving a buyer less time to check.

3.      When you get the Draft Contract again check the wording, and not just the main parts. These documents are often 10-12 pages long and it isn’t hard to slip something in hoping that the buyer will not check every page. Of course you have to sign every page so if you don’t check you have no-one to blame but yourself.

4.      Finally check the Final Contract before you sign it. Until you have established a relationship with the seller, including the completion of a successful transaction, be alert.  

Written by Haydn Leseberg, Trade Manager, Sutlet Group.

Sutlet Group provides professional trading services via our contacts of buyers and sellers all over the world.

Contact us for pricing on coal, petroleum, rice, urea, chemicals, iron ore and sugar.

Wheat – the grain drain

In 2009-2010 the harvest in Russia was so short of expectations that the government banned exports to protect the internal market. This lead to shortages in the market, high prices and a move to other grains like rice. This, in turn, lead to higher prices for rice too.

Figures that are available for 2010-2011 show continued shortfall in the current harvest which means a continuation of lower output in both Russia and the Ukraine. This has been caused, for the most part, by an unusually hot summer and a continuation of the drought. It is rather ironic that Pakistan will also have shortages, but that their shortages are caused by floods.

Additionally, while the wheat harvest yield is below expectation there is also real pressure on rice. Most of the north and north-east of Thailand is underwater and the floods in Pakistan put its own rice production in danger. 

Written by Haydn Leseberg, Trade Manager, Sutlet Group

Thai govt agrees to export 50,000 tons of rice to Indonesia

The Commerce Ministry has agreed to sell 50,000 tons of rice at low price to Indonesia, which has been facing both the volcanic and tsunami disasters.

The rice will be sold at a very low price through a Government-to-Government (G2G) agreement. The Thai Commerce Ministry has not selected a private company to handle the task so far, as the agreement has yet to be signed.

Meanwhile, the Fiscal Policy Office Director Naris Chaiyasut said the Office had been assigned to thoroughly study the agricultural insurance program, which was scheduled to be implemented next year to insure losses against drought.

From http://www.siamdailynews.com

The rice market

At the moment the supply of rice is a problem. But just how much is caused by poor crops and how much is caused by government interference with the supply?

We know that the latest harvest in Pakistan was 40% down on previous harvests. This caused a real problem as Pakistan not only consumes rice domestically but earns valuable export dollars. Add to this the poor wheat harvest and a sugar shortage and that weighs heavily on their GDP as well.

The wheat harvest was so bad in Russia that they stopped exporting. This had the effect of causing shortages in importing countries and they then turned to rice as a substitute. This also effected rice stocks. But a check of stocks in the local market here in Thailand show that stocks are plentiful even as the price climbs,

But we shouldn’t get too excited because right now huge areas of land used primarily for rice growing are currently underwater from unprecedented floods in the north and north-east of Thailand. It may well be that those reserves, which were seen as a government manipulation of the market, will come in handy when domestic production falls. In a country where rice is a staple any shortage of rice would be a total disaster.

Written by Haydn Leseberg, Trade Manager, Sutlet Group

Siam Trading Guide to Urea: Part 4

The conclusion to the analysis of Urea has come to a close with how to store it, the release of urea, and most importantly, “Urea Do's and Don'ts”

Do you need to acquire large quantities of Urea? Siam Trading, can arrange this with our partners, the Sutlet Group.

Urea Storage

Urea is neither combustible nor explosive. It can be stored safely with no loss of quality under normal circumstances. Small or fast-moving augers should not be used to move granular urea. Urea particles are generally soft and abrasion can break the granules. Belt conveyers should be used whenever possible. Urea should not be stored with ammonium nitrate. These materials, when in contact, rapidly absorb water when the relative humidity is above 18%.

Slow Release Of Urea

Urea fertilizer can be coated with certain materials, such as sulfur, to reduce the rate at which the nitrogen becomes available to plants. Under certain conditions these slow-release materials result in more efficient use by growing plants. Urea in a slow-release form is popular for use on golf courses, parks, and other special lawn situations.

Urea Do's and Don'ts

• Store separately from ammonium nitrate.
• Do not use small, fast-moving augers to move the urea.
• Do not exceed a spreading width of 50 feet when urea is applied.
• Do not place in direct contact with corn seed.
• Keep rates of nitrogen applied together with small grain in drill to 10 1b. on dry soils, 20 lb. when soil is moist.
• Apply urea on sod crops when atmospheric temperature is below 60 degrees F (15.5°C).
• When urea is broadcast on soils of high pH (above 7.5), the material should be incorporated into the soil as soon as possible.

Prilled

Nitrogen - 46% minimum

Moisture - 0.3% max.

Free Ammonia -  160 PXT PPM maximum1

Biuret - 1.0% maximum

Harmful Substances - 100% free

Melting Point - 132 degrees Celsius

Granulation - 1-4 mm 90% minimum 

Colour White -  Standard White or Pure

Odour - Odourless

Boiling  - Decomposes before boiling

Radiation - Non radioactive

Physical State -  Solid @ 20°C, 101 KPA

Specific Gravity -  Solid @ 20°C, - 1.335 t/m³

Floatability - Sinks and Mixes

Molecular Weight - 60.065

Free flowing - Treated against caking.

Granular

Nitrogen - 46% minimum

Moisture - 0.5% max.

Free Ammonia -  160 PXT PPM maximum1

Biuret - 1.4% maximum

Harmful Substances - 100% free

Melting Point - 132 degrees Celsius

Granulation - 2-4 mm 90% minimum 

Colour White -  Standard White or Pure

Odour - Odourless

Boiling  - Decomposes before boiling

Radiation - Non radioactive

Physical State -  Solid @ 20°C, 101 KPA

Specific Gravity -  Solid @ 20°C, - 1.335 t/m³

Floatability - Sinks and Mixes

Molecular Weight - 60.065

Free flowing - Treated against caking.

 

In conclusion as seen by the numerous blog posts about Urea, the agricultural fertilizer, it can be seen that it both has its advantages and disadvantages. Nevertheless, what should be noted is its important on the world stage as an ever growing global agriculture industry which is swaying ever closer towards the use of chemical fertilizers. It can be seen that there is a natural alternative that will hopefully be capitalized on in the near future.

For more information, contact Siam Trading, via the Sutlet Group.

Siam Trading Guide to Urea: Part 3

Now that the epic saga of Urea has reached its pseudo finale, it's time to get down and dirty to figure out how to spread Urea.

Do you need to acquire large quantities of urea? Siam Trading, can arrange this with our partners, the Sutlet Group.

Spreading of Urea

Urea can be bulk-spread, either alone or blended with most other fertilizers. It is recommended that the spreading width not exceed 50 feet when combined with other fertilizer materials. Urea often has a lower density than other fertilizers with which it is blended. This lack of "weight" produces a shorter "distance-of-throw" when the fertilizer is applied with spinner-type equipment. In extreme cases this will result in uneven crop growth and "wavy" or "streaky" fields.

Blending Urea with Other Fertilizers

 

Urea and fertilizers containing urea can be blended quite readily with monoammonium phosphate (11-52-0) or diammonium phosphate (18-46-0). Urea should not be blended with superphosphates unless applied shortly after mixing. Urea will react with superphosphates, releasing water molecules and resulting in a damp material which is difficult to store and apply.

Application of Urea to Growing Crops

Urea can be applied to sod crops, winter wheat. or other small grains. This application, however, should be made during cool seasons. During warm periods (60 degrees F or above), urea in contact with vegetative material will tend to give off ammonia. If urea must be applied on grass pastures in the summer, apply when there is a high probability of rainfall.

Foliar Application of Urea

Urea can also be applied as a foliar spray on some crops, such as potatoes, wheat, vegetables, and soybeans. Urea is highly watersoluble. At normal atmospheric temperatures, approximately 1 lb. Of urea can be dissolved in 1 lb. of water. Research data indicate that urea should contain no more than 0.25% biuret for use in foliar sprays. For many crops the quantity of nitrogen applied at one time should not exceed 20 lb. of nitrogen per acre.

How to find a Petroleum supplier

One of the trickiest tasks on the internet is finding a petroleum supplier that is real. There are so many companies available, but a lot of them are merely names with no backing. Others are nothing more than fakes whose business is not selling petroleum but who aim to separate the unsuspecting from their money. The Sutlet Group is heavily involved in this business and we have seen it all.

The first thing to watch for is the company that requires an up-front fee. This is a very common ploy, and requests can range up to US$300,000. They claim it is to register the contract or organize title transfer. Don’t fall into the trap. A reputable supplier will pay this fee themselves, having factored it into the price. A real supplier will not ask for anything up-front.

To further confuse the issue. companies such as Rosneft and Gazprom do not sell direct. They use subsidiaries and this gives the fraudsters the opportunity to claim they are backed by these large companies. Be careful and read the procedures they issue carefully. Make sure the POP is done bank to bank. Don’t trust emails and faxes. Make sure the contract matches the FCO. Watch for hidden traps.

While saying how hard it is for buyers one must say a word about the other side. Sellers get very annoyed at people who fish far and wide for prices. Others will go through the deal only to back out when it comes time to pay. 

So if you are looking to buy petroleum check every piece of paper and don’t enter into a deal unless you intend to follow though.

Written by Haydn Leseberg, Trade Manager, Sutlet Group Co., Ltd.

The Sutlet Group is a leading provider of business services in Thailand, but also provide professional trading services via our worldwide network of reputable partners and suppliers. Contact us for the latest prices on key commodities.

Siam Trading Guide to Urea: Part 2

In the previous blog, Urea was being introduced as a substance used for agricultural purposes and what it consists of. Now that the basics are covered, how does one apply this knowledge?

Do you need to acquire large quantities of urea? Siam Trading, can arrange this with our partners, the Sutlet Group.

Incorporate Urea for Best Use

Nitrogen from urea can be lost to the atmosphere if fertilizer urea remains on the soil surface for extended periods of time during warm weather. The key to the most efficient use of urea is to incorporate it into the soil during a tillage operation. It may also be blended into the soil with irrigation water. A rainfall of as little as 0.25 inches is sufficient to blend urea into the soil to a depth at which ammonia losses will not occur.

Urea Losses to the Air

Urea breakdown begins as soon as it is applied to the soil. If the soil is totally dry, no reaction happens. But with the enzyme urease, plus any small amount of soil moisture, urea normally hydrolizes and converts to ammonium and carbon dioxide. This can occur in 2 to 4 days and happens quicker on high pH soils. Unless it rains, urea must be incorporated during this time to avoid ammonia loss. Losses might be quite low in the spring if the soil temperature is cold.

Soil Application and Placement of Urea

If properly applied, urea and fertilizers containing urea are excellent sources of nitrogen for crop production. After application to the soil, urea undergoes chemical changes and ammonium (NH₄ +) ions form. Soil moisture determines how rapidly this conversion takes place. When a urea particle dissolves, the area around it becomes a zone of high pH and ammonia concentration. This zone can be quite toxic for a few hours. Seed and seedling roots within this zone can be killed by the free ammonia that has formed. Fortunately, this toxic zone becomes neutralized in most soils as the ammonia converts to ammonium. Usually it's just a few days before plants can effectively use the nitrogen. Although urea imparts an alkaline reaction when first applied to the soil, the net effect is to produce an acid reaction.

Urea or materials containing urea should, in general, be broadcast and immediately incorporated into the soil. Urea-based fertilizer applied in a band should be separated from the seed by at least two inches of soil.

Under no circumstances should urea or urea-based fertilizer be seed-placed with corn.

With small grains, 10 lb. of nitrogen as urea can generally be applied with the grain drill at seeding time even under dry conditions. Under good moisture conditions, 20 lb. of nitrogen as urea can be applied with the grain drill. Research results at North Dakota State University indicate that under dry conditions, urea at the rate of more than 20 lb. nitrogen per acre, applied with a grain drill in a 6-inch spacing, can reduce wheat stands more than 50%.

Research at the University of Wisconsin indicates that seed-placed urea with corn, even at low rates of nitrogen, is very toxic to the seed and greatly reduces yields. When urea was side-placed as a 2" x 2" starter, however, little if any damage was noted

Stay tuned for the next blog post about the intricacies of using Urea as a fertilizer.

Siam Trading Guide to Urea: Part 1

In the grand scheme of things, one would be inclined to think that physical biological waste would be the only thing worth saving in order to fertilize plants, with all its vitamins, minerals, and nutrients somewhat intact. However, physical waste's twin brother, liquid waste has been used as a fertilizer for over 200 years! Yes, Urea, the chemical byproduct of a quenching one's thirst after drinking far too much water. But what is actually known about Urea and how is it used in the agriculture industry?

Here is Siam Trading's 4-part guide to Urea – a resource that we can provide via our international trade connections. Do you have a need for large quantities of Urea? Contact the Sutlet Group for more information.

The facts about Urea

Urea, also called carbamide, is an organic chemical compound which essentially is the waste produced when the body metabolizes protein. It is a compound not only produced by humans but also by many other mammals, as well as amphibians and some fish. Urea was the first natural compound to be synthesized artificially using inorganic compounds— a scientific breakthrough. Urea was discovered in 1773 by the French chemist Hillaire Rouelle. In 1828, just 55 years after its discovery, it became the first organic compound to be synthetically formulated, this time by a German chemist named Friedrich Wöhler, one of the pioneers of organic chemistry.

Physical Forms of Urea

Commercially, fertilizer urea can be purchased as prills or as a granulated material. In the past, it was usually produced by dropping liquid urea from a "prilling tower" while drying the product. The prills formed a smaller and softer substance than other materials commonly used in fertilizer blends.

Today, though, considerable urea is manufactured as granules. Granules are larger, harder, and more resistant to moisture. As a result, granulated urea has become a more suitable material for fertilizer blends.

Advantages of Fertilizer Urea

• Urea can be applied to soil as a solid or solution or to certain crops as a foliar spray.
• Urea usage involves little or no fire or explosion hazard.
• Urea's high analysis, 46% N, helps reduce handling, storage and transportation costs over other dry N forms.
• Urea manufacture releases few pollutants to the environment. 
• Urea, when properly applied, results in crop yield increases equal to other forms of nitrogen

Our guide to Urea continues with the next blog post “Incorporating Urea for Best Use”

Sugar - how sweet it isn't!

Sugar is in just about everything we eat and drink. Often we don’t even know that it's there, until it's missing... 

This simple commodity is slowly becoming more and more scarce. One example is Pakistan, where floods have affected the supply. It is claimed they are going to be nearly 100Mmt short of domestic supply this year. 

Already the price has risen drastically around the world. Brazil, the main producer and exporter of sugar, is already having to regulate sales. 

Companies who traditional buy sugar had better lock themselves in to long-term contracts while there are still supplies.

But sugar isn’t the only thing in short supply. Russia has stopped the export of wheat after a particularly poor harvest this year. Rice, a very popular commodity, is inconsistent. The whisper is that VietNam may limit exports and this will force the price up in Thailand. One country’s shortage is another country’s pot of gold.

Written by Haydn Leseberg, Trade Manager, Sutlet Group

For assistance in managing your trading activities, or to find the best deal for a given commodity, contact the Sutlet Group. The Sutlet Group is a leading provider of business services in Thailand and has developed excellent trading relationships worldwide.

Thailand's no.1 rice position under threat

Taken from Bangkok Post:
http://www.bangkokpost.com/business/economics/199908/thailand-no-1-rice-position-under-threat

Thailand's position as the world's leading rice exporter will come under threat from Vietnam in the next 10 years.

Vietnam's rice exports are expected to average 7.5 million tonnes annually, while Thailand's will remain around 8.6 million tonnes in that period, said the Center for International Trade Studies at the University of the Thai Chamber of Commerce.

Vietnam's rapidly increasing rice exports are attributed mainly to relatively cheap prices and improved quality.
The UN Food and Agriculture Organisation predicts Thailand will ship about 10 million tonnes of rice this year, with Vietnam exporting 6 million tonnes.

Aat Pisanwanich, director of the centre, said Thailand needed to improve its competitiveness, particularly in the Asean market, where Vietnam has a 59.9% share and Thai rice represents 39.6%.

The centre's latest study shows Thailand cannot compete with Vietnam in rice exports because of 10 factors including lower productivity, higher production costs, lower prices and fragmented marketing.

Vietnam's rice productivity in the current season averages 862 kilogrammes per rai, the highest rate in Asean, while Thai rice productivity averages only 448 kg per rai, lower than that of Cambodia, Laos and Burma. Thai productivity is also well below the world average of 680 kg.

The study found that production costs of Vietnamese rice at Can Tho, 169 kilometres from Ho Chi Minh City, were 4,979 baht per rai in 2008, while Thai production costs in Ayutthaya province were as high as 5,800 baht a rai.

More importantly, Vietnam encourages its farmers to cut the use of chemical fertilisers, pesticides and rice seeds, while its government has extended co-operation with neighbouring countries by, for instance, setting up the Cambodia-Vietnam Food Co (Cavifoods) in Cambodia to operate a comprehensive rice business. It plans to expand the joint venture to Burma.

Mr Aat said the Vietnamese government had also cut farmers' production costs with policies such as subsidising loan interest for buying raw materials and equipment. It tries to ensure its farmers enjoy profits of at least 30% of production costs.

Vietnam has established a rice-trading market in Hau Giang province, set up a large warehouse covering 100 rai in Vinh Long province and extended partnerships with several countries to set up warehouses.
As well, it has only one marketing team for two state enterprises.

Welcome to Siam Trading

Siam Trading is a new blog that will focus on issues related to trading in Thailand and beyond. We will regularly post new prices and information from suppliers with regards our abilities to source chemicals, coal, iron ore, petroleum, urea, rice and sugar.

Siam Trading is produced by Siam Trading Services (STS), a leading provider of trading services in Thailand, and a Member of the Sutlet Group. To learn more about business in Thailand, don't forget to check out these informative blogs:

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