With the continuation and escalation of geopolitical conflicts and a series of sanctions, the turmoil in the global market is far from over.
Among them, the fluctuation of energy market is the core, which leads to the linkage of grain and other commodity markets.
Judging from the current situation, the fluctuation of the energy market will continue.
Recently, European natural gas prices have soared again. European benchmark TTF Dutch natural gas futures once rose by nearly 17% and returned above 100 euro /MWh, reaching 109 euro at the highest. ICE UK natural gas futures once jumped more than 18%.
The main reason for the soaring price is that, on April 26th, Bulgaria and Poland said that Russia would suspend the supply of natural gas to the two countries from the next day, because Russia had signed relevant laws in early April, requiring "unfriendly countries" to pay Russian natural gas fees in rubles. The settlement date is usually at the end of the month or early next month, and those who refuse to pay in rubles will face the risk of "death".
Europe has a high degree of external dependence on energy. The external dependence of natural gas, oil and coal in Europe is as high as 90%, 97% and 70% respectively. Among these three energy sources, Russia is the largest supplier in Europe.
Take natural gas as an example. Europe is short of at least 300 billion cubic meters of natural gas every year, and Russia can supply about 654.38+0.50-2 billion cubic meters of natural gas to Europe every year.
Therefore, the European natural gas market will fluctuate around the supply changes of Russian natural gas.
On the other hand, Russia also indicated that it would stop supplying oil to Poland.
This sentiment was also transmitted to the crude oil market, which made American oil rise again by 3.2 1% and return to the 100 USD/barrel mark, reaching10/.7 USD/barrel, while Brent crude oil also rose by 0.5 1% to/kloc.
So, what impact does this have on the grain market? Mainly in two aspects:
First, the high price of natural gas pushes up the production cost of urea.
As we all know, coal and natural gas are important raw materials for urea production, commonly known as coal-fired urea and gas-fired urea.
China is dominated by coal-fired urea, so the fluctuation of urea price in China is closely related to the fluctuation of coal price, while the international urea is dominated by gas urea, so the price fluctuation is closely related to the price of natural gas.
Although the price of natural gas in Europe has dropped from March, it is still fluctuating at a high level. Moreover, natural gas is different from other commodities, and there are great restrictions on supply and transportation, so it is almost impossible for Europe to completely replace Russian natural gas in a short time, which means that the subsequent game will continue, and the price of natural gas is still at a high level, which also means that the prices of fertilizers such as urea are easy to rise and difficult to fall.
At present, an important impact on the grain sector is the soaring price of chemical fertilizers. Because of the soaring fertilizer price, the global food production cost has risen in an all-round way, which is bound to be further transmitted to food prices and terminal food prices.
Second, the price of crude oil fluctuates at a high level, and the demand for biofuels is strong.
The supply of natural gas is often closely linked to the supply of oil, and the persistence of conflicts and the escalation of sanctions will often lead to constant fluctuations in the crude oil market.
As we said before, the overall probability of global crude oil price will hover around 100 USD/barrel this year, which is more than 30% higher than the 75 USD/barrel at the end of last year.
When the price of crude oil rises to $75/barrel, it is profitable to produce fuel ethanol.
In fact, in order to stabilize oil prices, the United States recently lifted the ban on ethanol fuel in the summer.
This means that high oil prices will inevitably drive the demand for biofuels, making more corn, soybeans, Gansu and so on "burned", making the global food supply more tense and food prices rising.
Therefore, the troubles in the energy market often spread to other fields. In addition to the restriction of Russia-Ukraine conflict on food production and transportation, the price fluctuation of energy market will also have a far-reaching impact on food prices.
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