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Shekel at weakest against dollar in over a year

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The shekel is at its weakest against the dollar since early April 2021, reflecting the strength of the US currency on world markets.


The sharp depreciation of the shekel against the dollar continues. In afternoon inter-bank trading, the shekel exchange rate is up 1.06% against the dollar at NIS 3.3269/$ and up 0.16% against the euro at NIS 3.5197/€.

Yesterday, the Bank of Israel set the representative shekel-dollar rate up 0.030% today from Monday, at NIS 3.292/$, and the representative shekel-euro rate was set 0.425% lower at NIS 3.514/€.




The shekel is at its weakest against the dollar since early April 2021, reflecting the strength of the dollar on world markets, in anticipation of continued rate hikes by the US Federal Reserve to cope with rising US inflation. The dollar is at a five year high against the euro.

The continuing Russia-Ukraine war is also strengthening the US dollar, which is seen as the world’s default safe haven currency.

In addition, the heavy falls on Wall Street yesterday require Israeli institutional investors to sell shekels and buy foreign currency to hedge their overseas positions.

Published by Globes, Israel business news – en.globes.co.il – on April 27, 2022.

© Copyright of Globes Publisher Itonut (1983) Ltd., 2022.



Shekels Credit: Shutterstock Vladerina32

Shekels Credit: Shutterstock Vladerina32

 

 

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U.S. Southern Baptists release scathing report on sexual abuse By Reuters

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© Reuters.

By Rich McKay

ATLANTA (Reuters) – For decades, complaints of sex abuse by pastors and staff in the largest U.S. Protestant denomination, the Southern Baptist Convention, were either ignored or covered up by top clergy, according to an internal report released on Sunday.

The nearly 300-page report details how complaints were kept as “closely guarded secrets” within the church to avoid liability, “to exclusion of all other considerations,” it said.

“In service to this goal, survivors and others who reported abuse were ignored, disbelieved,” the report said, with church leaders covering up accusations and allowing accused clergy members to remain pastors or in other positions of authority.

Lawsuits against the church were denigrated as “opportunistic” and not having merit, it added.

The year-long investigation was initiated by the Southern Baptist Convention in June 2021, when a stream of complaints were raised at its annual meeting. The complaints focused on sexual abuse by pastors and volunteers and the lack of response by the religious body’s executive committee.

A representative of the Southern Baptist Church Convention, which claims more than 13 million members in the United States and more than 40 million worldwide, was not immediately available for comment.

The scandal echoes the one faced by the Roman Catholic Church, which has been rocked by allegations of sexual abuse, when the Boston Globe newspaper revealed in 2002 that church hierarchy covered up sexual misconduct by its clergy for decades.

The U.S. Catholic Church has paid out an estimated $3.2 billion to settle clergy abuse cases, according to BishopAccountability.org, which tracks the issue.

In 2019, the Houston Chronicle and the San Antonio Express-News reported that more than 700 victims had been abused by pastors, leaders and volunteers in Southern Baptist congregations.

The Southern Baptist investigation was carried out by Guidepost Solutions LLC.

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From plate to plough: Make India’s agri-exports more sustainable

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By Ritika Juneja & Ashok Gulati

In FY22, India’s agri-exports reached an all-time high of $50.3 billion, registering a growth of 20% over the preceding year. This was largely made possible by rising global commodity prices, but also by favourable and aggressive export policy and various export promotion agencies like Agricultural and Processed Food Products Export Development Authority , Marine Products Export Development Authority, and commodity boards, etc. However, a strategic question that arises is: How sustainable is this growth in agri-exports, given India’s resource endowments and its own needs? Already, there has been a sudden ban on wheat exports. To answer this rationally, let us first look at the composition of agri-exports.

Among the several agri-commodities exported in FY22, rice is the top-ranked, with exports of $9.6 billion (21.2 million metric tons, or mmt, in quantity). It is followed by marine products ($7.7 billion/1.4 mmt), sugar ($4.6 billion/10.4 mmt), spices ($3.9 billion/1.4 mmt), bovine (buffalo) meat ($3.3 billion/1.18 mmt) and so on (see graphic). Of these, two commodities—rice and sugar—are water guzzling, and need some serious thinking with respect to their global competitiveness and environmental sustainability.

India’s rice exports of 21 mmt constituted 41% of the global rice market of 51.3 mmt. Interestingly, when most of the other commodity prices were surging in the global market, the price of rice (Thailand, with a 25% share) collapsed by about 13%, from $484/tonne in April 2021 to $429/tonne in April 2022, largely due to India’s massive exports. That means India had to export more rice to net the same dollar-amount. Is this in India’s economic interest? In trade theory, it is a classic fit for an optimal export tax of 5-10%. India should not go beyond 12-15 mmt of rice exports; else, the marginal revenue from exports will fall.

Another concern in the case of rice is that a substantial part of its global competitiveness comes from highly-subsidised water, power and fertilisers that go into its production. It is well known that one kg of rice requires about 3,000-5,000 litres of water for irrigation, depending upon the topography. Taking an average of nearly 4,000 litres of water per kg of rice, and assuming that half of this percolates into groundwater, exporting 21 mmt of rice would mean a virtual export of 42 billion cubic meters (bcm) of water!

Sugar is another water guzzler, whose exports touched 10.4 mmt in FY22. It was backed partly by subsidies (including export subsidy) that crossed the de minimis limit of 10%, landing India in a dispute with other sugar-exporting countries at the WTO, and India losing its case. But the rising global prices of sugar also helped. However, from a sustainability point of view, exporting one kg of sugar amounts to roughly exporting 2,000 litres of virtual water. That means, in FY22, India exported at least 20 bcm of water through sugar exports.

So, via its rice and sugar exports in FY22, India exported at least 62 bcm of water! And much of this is being extracted from groundwater, as done in the Punjab and Haryana belt, where the water table is receding by 9.2 m and 7 m (respectively, in the two states) over the last two decades (2000-19), and in Maharashtra and Uttar Pradesh for sugar. Also, rice production systems are one of the most important sources of anthropogenic methane emission, contributing to 17.5% of GHG emission generated from agriculture (2021). This is all because of the distortionary policies of free power and highly-subsidised fertilisers, especially urea. In the case of common rice, our earlier research shows that power and fertiliser subsidies account for roughly 12-15% of the value in states like Punjab and Haryana. The best way to tackle this embedded environmental disaster would be to support farmers in a smart way, by giving them aggregate input subsidy support on a per hectare basis and totally freeing up the input prices of fertilisers and power and their costs of production.

Innovative farming practices such as alternate wetting drying and direct-seeded rice that can save up to 25-30% of the conventional water requirement, and micro-irrigation, which can save up to 50% irrigation water, can also be game-changing for reducing carbon footprint. However, the real solution is incentivising the farmers to switch some of the area under rice and sugar to other, less water guzzling crops. Haryana has come up with two schemes, ‘Mera Pani, Meri Virasat’ and ‘Kheti Khaali, Fir Bhi Khushali’. Under the first, Rs 7,000 per acre is given to farmers for switching from paddy to an alternative crop, while, under the second, farmers get Rs 7,000 per acre even if they do not grow any crop during the kharif season. 

A closer evaluation of non-basmati rice exports brings out another interesting fact. The unit value of these exports was just $354/tonne, below the MSP ($390 per tonne). How did that happen? One possibility is that a substantial part of supplies through PDS and PM Garib Kalyan Anna Yojana are leaking out and swelling rice exports. From a policy angle, it may be high time to introduce direct cash transfers in lieu of grains. This will help plug leakages as well as save costs, which can be used to better diversify our food systems, rationalise the use of scarce water, lower GHG emissions, and cut burgeoning food and fertiliser subsidies. Can the Modi government make agri-exports more sustainable? Only time will tell!

The authors are respectively, consultant, and Infosys Chair professor, ICRIER

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Funds post record soymeal selloff but corn views don’t budge -Braun

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NAPERVILLE — Speculators continued selling Chicago-traded soybean meal at a hot pace last week as prices dipped near four-month lows, but they continue carrying a hefty long position in corn.

According to the U.S. Commodity Futures Trading Commission, money managers slashed their net long in CBOT soybean meal futures and options to 35,923 contracts through May 17 from 52,314 a week earlier.

That put the three- and four-week selling totals at record levels. In the four-week period ended May 17, most-active meal futures had shed 10.4% but were down as much as 14%. The contract actually rose 2.6% in the most recent week.

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Money managers sold 63,619 soybean meal futures and options contracts in the four weeks ended May 17, equivalent to about 12% of the expected U.S. meal production in 2021-22.

CBOT oilshare, measuring soyoil’s share of value in the soy products, had reached record levels on May 12, and that eased last week. Soymeal futures rose 4.4% in the last three sessions but soybean oil fell 3%.

Money managers had trimmed their CBOT soybean oil net long in the week ended May 17 by a little more than 2,000 contracts, resulting in 86,237 futures and options contracts.

Most-active CBOT soybean oil has mostly traded at the previously unprecedented 80-cent level for a month now, settling at 80.93 cents per pound on Friday. High prices have been supported by top vegoil exporter Indonesia’s April 28 ban of palm oil exports.

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Indonesia said Thursday that the ban would end Monday despite domestic cooking oil prices remaining well above the target levels suggested. However, Jakarta said on Friday it would reimpose a domestic sales requirement, effectively curbing some exports.

Benchmark Malaysian palm oil futures rallied 3% on that news on Friday, though prices have eased more than 12% since the day before the ban took effect. But prices are still about 50% steeper than a year ago, which had featured record levels for the date.

CORN, SOY, WHEAT

CBOT corn futures jumped over 3% in the week ended May 17, but money managers added just over 1,000 contracts to their corn net long, which reached 339,711 futures and options contracts. The long has exceeded 300,000 contracts since October.

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Money managers snapped a three-week selling streak in CBOT soybeans through May 17, lifting their net long to 147,335 futures and options contracts from 130,661 a week earlier. That was based entirely on fresh longs and came with a 5.4% rise in most-active futures.

Corn eased nearly 3% over the last three sessions as U.S. farmers continued to make progress on their historically slow planting efforts, but soybeans jumped 1.6%. Top corn exporter Argentina said on Thursday it may raise its 2021-22 corn export cap to 35 million tonnes from 30 million currently.

Chicago wheat futures shot up nearly 17% in the week ended May 17 as India banned exports over high domestic prices and a smaller crop. The contract traded as high as $12.84 per bushel, a level reached on only five other trading days in history.

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India had been set to ship a record volume of wheat in 2022-23, at least 8.5 million tonnes, some 4% of global exports. As of Thursday, the government was considering allowing some trapped wheat at ports, up to 1.8 million tonnes, to ship out.

Money managers in the week ended May 17 boosted their net long in CBOT wheat futures and options to 26,586 contracts, their most bullish since March 2021. That was up from 15,547 a week earlier and represented just a fraction of the buying that had been anticipated.

Open interest in Chicago wheat surged 14% in the week ended May 17, the most for any week since 2006, but it is still the lightest for the date since 2009.

Most-active CBOT wheat futures fell 8.5% in the last three sessions as investors booked profits. Trade sources suggest commodity funds may have sold 37,000 futures contracts during that period, which would result in a real-time net short. Karen Braun is a market analyst for Reuters. Views expressed above are her own.

(Editing by Matthew Lewis)

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