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China Opens Up Flow of Fruits and Vegetables to Russia   [Copy link] 中文

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Post time 2014-8-13 18:38:11 |Display all floors

LNG Won't Save Europe

"Substantial liquefied natural gas exports to Europe are simply a politician’s pipe dream."

Jay Zawatsky
April 23, 2014

It is now common knowledge that horizontal directional drilling and “fracking” in the domestic oil and natural gas production industry have reversed a generation of production declines in the United States. But unlike Obama Administration accounting, which pretends it can save the same dollar it is spending twice, we cannot spend (i.e., combust) the same natural gas molecules twice. More specifically, the United States cannot both (a) become more energy independent and (b) save Europe from the Russian energy bear. Accordingly, substantial liquefied natural gas (LNG) exports to Europe are simply a politician’s pipe dream—one that will never even have an opportunity to go up in smoke.

Why is that? In 2013, all European Union states plus Switzerland, Norway, Turkey and the Balkan states consumed 18.7 trillion cubic feet (Tcf) of natural gas. According to the U.S. Energy Information Administration (EIA), 30 percent, or 5.7 Tcf, of this gas was supplied by Russia. Can the United States supply this amount of gas to greater Europe?

Mr. Putin has access to the same energy facts as Mr. Obama. They both know that there is no chance that the United States can reliably supply 5.7 Tcf to Europe. Here is why:

No Pipeline

There is no pipeline to move natural gas from the United States to Europe. So all gas exported to Europe will have to be liquefied and shipped across the Atlantic. The natural-gas liquefaction process is extremely energy intensive. That means that huge amounts of energy (from natural gas) will have to be expended to compress and liquefy the export gas. In effect, to export 5.7 Tcf of LNG, more than 1.9 Tcf of natural gas will have to be consumed in the LNG liquefaction process. So 7.6 Tcf of U.S. natural gas production will have to be budgeted to provide Europe with the 5.7 Tcf needed.

Insufficient Supply

If the United States uses 7.6 Tcf of its natural gas to supply Europe, it will not have enough natural gas to meets its domestic requirements. Indeed this past winter witnessed the U.S. stored reserves of natural gas fall to a low of 800 billion cubic feet. If the United States had shipped all of that stored gas to Europe (a fifty-day supply for Europe), pilot lights all over the United States would have gone out, as the stored gas pressurizes the domestic natural gas delivery system. Without that pressure, gas-reliant industry, including more than 30 percent of domestic electricity production, would stop.

But what about all of the new shale gas from fracking coming online?

Even with enhanced supplies from new production, the United States is still importing 1.3 Tcf annually. And although shale gas production will continue to increase, more of that supply will be needed in domestic electricity production, as the Obama Administration continues its war on coal and coal-fired electricity production. The bottom line is that there simply will not be enough from the United States to carry Europe as well.

That is particularly true in light of two important facts: Natural gas production in Europe itself is falling as Norwegian gas production declines. In addition, the political situation in North Africa remains volatile. That region, which supplies a substantial amount of gas to Europe, simply is not a reliable partner on which Europe can count for increasing supplies of natural gas.


At current domestic natural gas prices, LNG delivered to Europe would require a price of over $9 per thousand cubic feet (Mcf) to offset liquefaction and transportation costs. Russian gas is produced for fifty cents per Mcf and is delivered by pipeline in gaseous, not liquefied, form. Accordingly, Russia can undercut, substantially and indefinitely (given their giant in-ground supply), U.S. LNG exports.

Moreover, existing liquefaction and loading facilities do not have the capacity to supply Europe, even if there were ample gas supplies in the United States. The capital cost of new facilities would require decades to amortize. But if political problems with Russia are not perceived by the Europeans as lasting for twenty or more years, Europe is not likely to forsake Russian gas for decades in order to enter into long-term supply contracts with U.S. LNG suppliers. Of course, without such long-term supply contracts, there is no basis on which to finance and build sufficient LNG facilities to supply Europe in the first place.

The Real Beneficiaries of LNG Export

The problem with the domestic natural gas industry is that there is no “world market” for natural gas. It is easy to ship oil internationally, so there is a world market price for petroleum. If oil demand in one region increases, the oil tankers literally are rerouted there. Not so with natural gas. Natural gas producers are captives of where the pipelines begin and end, so they cannot capitalize in the short or medium term on increasing gas prices or increasing gas demand in a particular region, like Europe.

But LNG can be shipped anywhere, just like oil, and at the world price, instead of merely the domestic price. LNG also can replace oil in truck fleet transportation, so demand for LNG will increase, if fleets are converted from diesel to LNG or even compressed natural gas (CNG). Indeed, the conversion from diesel engines to LNG and CNG engines is well underway in the United States.

U.S. LNG exports may not give Europe independence from Russian gas, but they will allow domestic producers to raise prices. Good for producers, but not necessarily good for domestic gas consumers.

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Post time 2014-8-13 18:41:04 |Display all floors

EU to urge Latin America not to export food to Russia

Published time: August 12, 2014 09:52

The European Union is reported to be planning to dissuade Latin American countries from providing Russia with agricultural produce, saying it would be unfair and ‘difficult to justify.’

“We will be talking to the countries that would potentially replacing our exports to indicate that we would expect them not to profit unfairly from the current situation,” the Financial Times (FT) quotes one senior EU official talking at a briefing on the situation in Ukraine on Monday.

The food producers could sign new contracts with Russia, but it would be “difficult to justify” the desire of the countries to pursue the diplomatic initiatives to fill the gap left by the EU, the official added.

Another EU official explained that negotiations could be part of political discussions aimed at addressing the importance of a united international front on Ukraine, rather than hindering food exports to Russia.

Despite being the world’s largest trading bloc, the EU has little influence, as its 15-year negotiations with Latin America’s Mercosur have been mired in difficulties over market access.

Since Russia imposed an import ban on agricultural products from the EU, US, Australia, Norway and Canada, several Latin America countries and trade groups have said Moscow’s measures could offer them a lucrative windfall.

READ MORE: Russia’s import ban means big business for Latin America

Chile is already tipped as a major beneficiary of Russia’s embargo on European fish, while Brazil immediately gave a green light to about 90 meat plants to start exporting chicken, beef and pork.

“Russia has the potential to be a large consumer of agricultural commodities, not just meat,” Seneri Paludo, Brazil’s Secretary for Agricultural Policy said, citing that Russia may also increase procurement of corn and soya beans.

Besides Latin America benefitting from the embargo, Belarus and Turkey are also believed to win from the supply gap.

The EU member states are meeting in Brussels on Thursday where they are expected to work out a comprehensive response to Russia’s food embargo.

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Post time 2014-8-13 18:55:58 |Display all floors

Economic damage from Russian boycott could be triple original estimate


When Putin retaliated with food bans from the US, EU, Australia, Japan ..... after three
rounds of sanctions on Russia by the EU - compelled to do so through BLACKMAIL by
the US NSA, the West was taken by complete shocking surprise. This was totally
unexpected by the EU and they never in their wildest fantansies anticipated that
Putin would do that!
They thought that Putin would never jeopardise food supplies
from the EU to Russia. How very wrong was EU and their master - the United States.
And now the farmers and other auxiliary businesses in EU are really angry .........

To undermine further its 'allies' the EU and to provoke Russia more aggressively,
the United States now instructed their puppet Ukraine government to sanction Russia
by blocking the flow of gas from Russia to the EU.
And who really suffer in the final
analysis? No wonder the United States said: "F . CK the EU!"

The obvious predicament facing EU leaders is really protecting themselves because  
Obama has implicitly threatened to use the NSA recordings of their phone, email and other
electronic communications to blackmail them OR face the US blackmail straight on and
for once put the interests of the EU people above their own.

That choice is pretty obvious!

Tuesday 12 August 2014

The economic damage from the Russian boycott of Dutch food products could reach €1.5bn, Dutch employers' organisation VNO-NCW chief Hans de Boer said on Tuesday.

Last Thursday Russia announced a ban on the import of fruit, vegetables, meat, fish and dairy products from countries which support the sanctions imposed on the country by the EU and US.

Earlier calculations of the damage were €500m but De Boer said this is too optimistic. 'That calculation did not take into account the Dutch dealers who operate from eastern Europe,' he told broadcaster Nos.

Grow less

On Monday, the organisation told junior economic affairs minister Sharon Dijksma it would like to see political involvement in the market.

Farmers and growers should be encouraged to grow less to avoid over-capacity and, as a consequence, falling prices, De Boer said.

In return, they should be offered compensation.


The market gardeners' association LTO, which was at the meeting with Dijksma, agrees. 'With a small amount of European money we can ensure that produce taken out of the market is sent to places where it is needed.'

The European Commission is looking into taking produce out of the market to avoid fruit and vegetable mountains and keep prices stable.

Last Friday, Dutch media reported that the boycott was already having an effect, with 300 lorries carrying fresh produce stuck at the Russian border and prices falling fast at trade auctions in the Netherlands.   


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Post time 2014-8-13 19:03:23 |Display all floors

Latin America will not bow to EU pressure, will tighten ties with Russia

published by Tom Sullivan on Wed, 2014-08-13 04:47

The EU is reportedly planning to put pressure on Latin America to stop it from boosting its agricultural exports to Russia. In response to sanctions, Moscow imposed a food embargo on a range of EU products, and countries like Brazil and Chile are being canvassed to step in and fill the gap. ... tighten-ties-russia

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Post time 2014-8-13 19:08:20 |Display all floors

China Begins Direct Sales Of Fruit & Vegetables To Russia

Submitted by Tyler Durden on 08/12/2014 11:04 -0400

Despite the ongoing mainstream media meme that Russia is becoming 'isolated' from the rest of the world thanks to Western sanctions, it appears they have found a few new 'old' friends to become un-isolated with. On the heels of Russia's food-import-ban sanctions last week, Russian and Chinese officials have announced an agreement that China will start selling fruit and vegetables directly to Russia via a special logistics center in Russia's far east. Notably, this week saw Russia's GDP beat consensus expectations, Ruble rally, and stocks jump as German confidence plunged - can you say blowback?

As RT reports,

China will start selling fruit and vegetables directly to Russia, and Baorong company plans to set up a special logistics center in Dongning on the border with Russia’s Far East to do it.

The 70,000 square meter wholesale market and 30,000 square meter warehouse, fitted out with refrigerators and other equipment, will be in a special cross-border customs zone, ITAR-TASS cites the head of the Association of Applied Economy of the Heilongjiang Province Zhang Chunjiao.

“Direct export of fruit and vegetables to Russia will be organized from it," she said.

It will cost $9.7 million to construct. Customs clearance times will be reduced, and there will be no need to double-check the cargo because of video surveillance in the warehouse.

A Chinese company Dili, also intends to create a similar cross-border trade zone by the end of 2014, Zhang Chunjiao added.

The announcement comes after Russia introduced a 1-year ban on imports of some agricultural products from the EU, US, Australia, Canada, Australia and Norway last week. If it lasts, it could cost European Union members $16 billion, Vygaudas Usackas, the EU ambassador to Russia, estimated.

*  *  *

We assume payment for these imports will be in Rubles or Renminbi... not US Dollars.

*  *  *

As we noted last week, there is good reason why Europe is being battered by these new sanctions; but who is hit hardest?

EU member states have already complained their economies would be hit hard, with Germany and Poland losing the most trade with Russia, and the Baltic states – Lithuania, Latvia and Estonia – seeing their shares of GDP falling even sharper.


For the US the effect will be very limited, as agricultural exports to Russia are about one tenth of one percent of total US gross domestic product of about $144 billion, according to the US Department of Agriculture.

US food exports to Russia in 2013 amounted to less than 1 percent of the country’s total agricultural exports, the US Department of Agriculture said to RIA Novosti. Conversely, Russian exports to the US and European markets are 13 percent of its GDP. In 2013, the US exported $1.3 billion of food goods to Russia, about a quarter of which were poultry products.

*  *  *

Furthermore, perhaps in the interests of not embarassing itself, the EU is not asking China to refrain from supportinG Russia:

The European Union has no plans to ask a number of states, in particular China, to refrain from replacing banned European food products in the Russian market, a source close to EU leadership told RIA Novosti on Tuesday.

“There are no concrete plans,” the official said, answering a question on whether the EU will ask China and some other countries not to replace banned agricultural and food products from Europe with their own goods in the Russian market.

Media reports earlier suggested that the European Union planned to convince Brazil, Chile and other Latin American states not to export their food products to Russia. It was said that EU expects these countries not to take advantage of the embargo on European products.

*  *  *

So it seems, US sanctions sparked European blowback... how long before Washington finds itself alone again.

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Post time 2014-8-13 19:11:23 |Display all floors

Brazil beef exports to Russia soar

POSTED: 13 Aug 2014 01:40

Brazilian beef exports soared last month, due mainly to a doubling in purchases by Russia, which has responded to international sanctions over Ukraine by banning imports from Europe and the United States.

RIO DE JANEIRO: Brazilian beef exports soared last month, due mainly to a doubling in purchases by Russia, which has responded to international sanctions over Ukraine by banning imports from Europe and the United States.

Brazil's Association of Meat Exporters said on Tuesday (Aug 12) that beef exports rose 19 per cent in July to US$692 million over the same period last year. Exports to Russia rose 113 per cent to US$181 million last month, compared to July 2013, it said.

The volume of meat exports to Russia also surged, rising 78.9 per cent during the month to 41,000 tonnes. Brazil exported 144,700 tonnes of beef in July, up 8.6 per cent from a year ago.

The United States and European Union nations slapped their most punishing round of sanctions against Russia at the end of July. Moscow responded a week later with a near total ban on food imports from those countries.

- AFP/de

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Post time 2014-8-13 23:17:50 |Display all floors

Russia builds new economic ties


The sanctions, which the EU and the United States imposed on Russia, led to responsive measures. Russia restricted imports of food from the countries that imposed the sanctions. Meanwhile, Western sanctions against Russia and Russia's sanctions against the West may become a favorable opportunity for Turkish, Argentine and Egyptian exporters.

Russia is now forced to search for new suppliers of the products that it no longer wants to import from several countries. The fact that Russia is a net importer of mainly fresh vegetables, fruit and meat products may give Turkish and Argentine exporters an opportunity to expand access to the Russian market.

In particular, Russia's decision to ban imports of a number of agricultural and food products offers great opportunities to expand supplies of meat and dairy products from Argentina.

"The opportunity to increase agricultural exports to Russia is very good news for us," the President of the Consortium for the export of Argentine meat, Mario Ravettino said.

The consortium unites major Argentine meat-packing companies. Beef, dairy products, pork, poultry, fruit, vegetables and seafood were included on the list of goods that Russia was ready to buy from Latin America. Ravettino believes that the Russian market is now open to expand purchases of meat from Argentina. Currently, there are many meat-making companies that work with Russian importers.

Russia mainly buys chilled and frozen beef. Unfortunately, despite the fact that last year supplies of beef to Russia increased by 18 percent, the amount of shipments is still insignificant. Argentina sells from 6,500 to 8,000 tons of beef per year for as low as $3,600 per ton. Still, it pales in comparison with the amount of beef that Argentina supplied to Russia a decade ago, when exports amounted to 150 thousand tons, said Ravettino.

At the same time, the president of the Consortium for the export of Argentine meat does not harbor high hopes for the future, as possibilities of Argentine meat exports are limited due to the reduction of livestock and restrictions on the export of up to 6 percent of produced meat. Almost all of the beef produced in the country goes to the local market to prevent the growth of domestic prices on meat.

However, Argentina can increase exports of dairy products to the Russian market in the amount of $250 million. First of all, it concerns cheeses. Argentina also exports 4,000 tons of butter, the lion's share of which goes to Russia.

Turkish exporters also see interesting prospects in new trade relations with Russia. According to the Statistical Institute of Turkey, Turkey's exports to Russia in 2013 made up $7 billion. Of these, 1.2 billion accounted for articles of Turkish exports corresponding to the products, against which Moscow imposed retaliatory sanctions.

Ecuador's President Rafael Correa said Tuesday that his country would not ask anyone's permission to supply food products to Russia.

"I just want to say that we do not need permission from anyone to sell food to friendly countries. As far as we know, Latin America is not a part of the European Union," Correa said.

Spanish newspaper El Pais wrote that EU countries were unhappy with the intention of Latin American countries to arrange the supplies of food products to Russia.

Earlier, Ecuador's Minister for Foreign Trade Francisco Rivadeneira said that the government was studying the possibility to increase exports to the Russian Federation.

Last week, the head of Russia's federal agency for agricultural control, Rosselkhoznadzor, Sergey Dankvert, and Ambassador of Ecuador to Russia, Patricio Alberto Chavez Zavala, discussed the prospects of increasing the volume of deliveries of Ecuadorian food to the Russian Federation.

According to the Embassy of Ecuador in Moscow, Ecuador's exports to Russia - mainly bananas and roses - brings second largest non-oil revenues to Ecuador. In the first five months of 2014, the country delivered to Russia 580,000 tons of bananas and 9.3 thousand tons of roses.

Meanwhile, Russia and Egypt explore a possibility of establishing a free trade zone. This was announced by Russian President Vladimir Putin said after talks with his Egyptian counterpart Abdel Fattah al-Sisi.

"We have reached an important agreement on the establishment of cooperation between Egypt and the Customs Union," said the head of Russia. "Now we are studying the possibility of establishing a free trade zone," said the president.

Putin added that Russia and Egypt agreed on the introduction of a simplified regime for the access of Egyptian products to the Russian market. "We discussed the possibility of creating an Egyptian logistics center on the Black Sea coast. We agreed to simplify the access of Egyptian products to our market," Putin said. He added that representatives of adequate Russian agencies would travel to Egypt in the near future for negotiations.

Egypt is ready to increase supplies of agricultural products to Russia by 30 percent, said Vladimir Putin. The Russian president said that Russia and Egypt actively cooperate in the field of agriculture. In particular, Russian grain exports to Egypt amount to 40 percent of Egyptian grain consumption.


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