Voices from Russia

Tuesday, 15 September 2015

DNR Resumed Limited Coal Deliveries to the Ukraine on a Barter Basis

00 dnr donetsk pr coal train 150915

______________________________

Today, DNR Transport Minister Semyon Kuzmenko told us that the DNR resumed limited supply of coal to the Ukrainian enterprise DTEK in exchange for electricity from Zuevskaya TES:

We restored supplies to DTEK in return for electricity from Zuevskaya TES… it’s a kind of barter. Zuevskaya TES suffered problems because it used a coal (“G”) not mined in the DNR. DTEK Pavlogradugol is the normal supplier of coal to the Zuevskaya TES, but it can’t get DNR anthracite coal to supply to its customers. DTEK made an advance payment, so, we sent the first batch of anthracite coal in 100-150 goods wagons. The DNR has to barter to serve its own interests. To avoid damage to our energy infrastructure, we’re doing this. We don’t act like the Ukraine, which does harm to itself. We’re now negotiating over trade in coal with other Ukrainian enterprises.

14 September 2015

DAN Donetsk News Agency

http://dan-news.info/ekonomika/dnr-vozobnovila-postavki-uglya-na-ukrainu-no-tolko-dlya-dteka-na-barternoj-osnove-kuzmenko.html

Tuesday, 8 September 2015

DNR Blocked Coal Shipments to the Ukraine until the Junta Lifts Its Blockade of Fuel and Spare Parts

00 dnr donetsk pr coalmine

______________________________

DNR Transport Minister Semyon Kuzmenko told us:

Now, we’re blocking coal supplies to the Ukraine; we have stringent conditions [to resume shipments]. The situation is now critical in the Ukraine; they need 1.2 million tonnes of coal from us per month. We’d only deliver it if they lifted their blockade of fuel and spare parts for railway wagons and locomotives, and if they ceased firing [on our trains]. Until they meet these conditions, we aren’t going to ship any coal to the Ukraine. At present, we’re only able to use a third of the locomotives that we need for our economy; we need to increase our capacity for our needs. With the removal of their blockade on fuel and spare parts, the DNR would be able to bring enough locomotives into the economy within two months.

The Ukraine terminated fuel shipments to the DNR on 27 June, since then, DNR railroad operations have depended on the remaining stocks of POLs*.

  • POL: Petroleum, Oil, Lubricants

8 September 2015

DAN Donetsk News Agency

http://dan-news.info/ekonomika/dnr-zablokirovala-postavki-uglya-na-ukrainu-poka-ne-budet-snyata-blokada-na-postavki-gsm-i-zapchastej.html

Monday, 10 August 2015

European Dairy Industry in Crisis Due to Russian Food Embargo

00 cows in european dairy farm 100815

_______________________________

European dairy farmers are facing their most serious economic crisis in decades, largely because of the continuing sanctions war between the EU and Russia. In a recent report on the subject, Radio Sweden explained that most expect the current Russian embargo of European agricultural products to lead to a new wave of lowering milk prices in the near future. It noted, “The current crisis is [already] regarded as one of the most serious in the last 40 years”, noting that with global milk prices already falling to a 30 year low, the current price of 2.65 krona (20 Roubles. 2 Renminbi. 20 INR. 0.30 USD. 0.41 AUD. 0.40 CAD. 0.28 Euro. 0.20 UK Pound) is well-below the 3.60 krona (27 Roubles. 2.50 Renminbi. 27 INR. 0.41 USD. 0.56 AUD. 0.54 CAD. 0.38 Euro. 0.27 UK Pound) minimum necessary for Swedish dairy farmers to make ends meet. Meanwhile, subsidies to Scandinavian dairy giant Arla Foods have fallen by 1.09 krona (8 Roubles. 0.75 Renminbi. 8 INR. 0.12 USD. 0.17 AUD. 0.16 CAD. 0.11 Euro. 0.08 UK Pound) over the past year. Färanäs-area dairy farmer Tore Engström told Radio Sweden, “We can’t remember when we last experienced such a deep crisis, and no one knows when it will end”.

The Association of Swedish Farmers thinks that if someone doesn’t deal with the situation in the next six months, many of Sweden’s 4,200 private dairy farmers may simply begin go bankrupt, with 4 out of 5 already suffering serious economic difficulties. Association chairman Jonas Carlsberg told Radio Sweden that according to the data of his colleagues from Denmark, “86 percent of Danish milk producers face a critical situation. I can add that a similar situation exists in Sweden as well”. Radio Sweden noted that much of the hit to producer prices has been the result of the continuing sanctions war between Europe and Russia over the Ukrainian crisis. Carlsberg complained, “The idea that farmers must pay for political decisions is fundamentally wrong. We’re waiting for decisive actions by policymakers”.  For its part, the Swedish government promised to look into the matter later this month, with EU agriculture ministers promising to do the same in early September.

Czechs, Germans, and Balts Feeling the Pinch Too

Like their Swedish counterparts, Czech dairy farmers too felt the pinch of the embargo, forced to look for new places to dump the 500 tonnes of butter and 1,500 tonnes of powdered milk that once went to the Russian market. German dairy farmers are also struggling, losing a market for 126,000 tons of cheese, according to Thorsten Sehm, the head of the Federal Union of German Milk Producers. Sehm told RIA Novosti that whilst only 1.26 million tons of Germany’s 29 million tons worth of milk went to Russia prior to the embargo, “In any market, once the supply exceeds demand, it leads to drastic changes”. So far, in Germany, Sehm noted that this led to a drop in prices to rates lower than “the crisis years of 2012 and 2009”. German Farmers’ Union spokesman Michael Lohse Lohse complained about commercial effects of political decisions, noting that for his organisation’s part, “we call on the authorities of our country to find opportunities for deepening [trade relations] with Russia”.

The Baltic States seem to be hit worst of all, with their close economic ties with Russia prior to the embargo and difficulties in finding alternative markets leading to a situation where their entire dairy industry is now on the verge of collapse. In Estonia, the sanctions war resulted in a decline in a 30 percent decline in producer prices, with Estonian milk exports falling by 17 percent in the first quarter of 2015 alone. Latvia’s dairy industry suffered a similar decline, with Agriculture Minister Janis Duklavs noting that he’d appeal to the EU for additional funds to save the dairy industry from total paralysis, warning that farmers are on the verge of destroying their livestock and liquidating their farms. Latvian Association of Milk Producers Chairperson Ieva Alpa Eisenberg noted that Latvian farmers “have plunged into despair, because we don’t know when the situation will improve. One doesn’t know whether one can climb a little bit further into debt, and whether one will be able to pay it back”. He noted that the present crisis is the worst the country faced in over 15 years. In Lithuania, dairy farmers join the rest of the agricultural sector, which has faced a 30 percent decline in exports in mid-2015, compared with a year earlier. Agriculture Minister Virginija Baltraitiene noted that she’d ask EU Commissioner for Agriculture for 32 million Euros (2.25 billion Roubles. 217.6 million Renminbi. 2.24 billion INR. 35 million USD. 47.6 million AUD. 46 million CAD. 22.6 million UK Pounds) to help save the industry. Local experts warn that Lithuania may have to reduce dairy production by 50 percent in the near future.

Global Factors

This spring, the EU lifted national quotas on milk production, with each country now able to increase dairy production at will, resulting in growing production and a glut in the market. This exacerbated the crisis in the loss of exports to Russia. Furthermore, China significantly reduced its purchase of powdered milk from EU sources, which only deepens the crisis. German Farmers’ Union spokesman Lohse explained, “Of the 10 cent drop in milk prices, 2-3 cents are the result of the Russian embargo, with the rest resulting from other factors. These include the decline in exports to China… as well as general overproduction of milk in the EU”. Federal Union of German Milk Producers chairman Sehm complained that local politicians “aren’t undertaking any efforts to create an appropriate regulatory environment for the milk market”, adding that the same problem exists in France, Spain, and Italy, and in other EU countries.

In August 2014, Russia introduced an embargo on several categories of food products from the EU, the USA, Canada, Australia, and Norway, in response to the anti-Russian sanctions introduced earlier by these countries over the Ukrainian Civil War. This June, the Russian government decided to extend the embargo until August 2016, responding to the EU’s extension of sanctions.

10 August 2015

Sputnik International

http://sputniknews.com/business/20150810/1025581375.html

Sunday, 9 August 2015

KSA Determined to Crash Oil Prices Until American Shale Oil Breathes Its Last

russia-oil

______________________________

American-German economic researcher and historian F William Engdahl observed that never in its wildest dreams did the Obama administration expect that it’d face a financial disaster after it conspired with Riyadh to drop oil prices and flood the market with cheap petroleum, trying to rerun the highly successful American-Saudi deal of 1986 that weakened the USSR. Although it wasn’t  not made public, on 11 September 2014 US Secretary of State John Kerry and King Abdullah concluded a secret deal to use Saudi “oil muscle” to bring Russia and the Kremlin to its knees. Remarkably, on the very next day, the US Treasury’s aptly-named Office of Terrorism and Financial Intelligence, headed by Treasury Under-Secretary David Cohen imposed new sanctions on Russia’s energy companies Gazprom, Gazprom Neft, Lukoil, Surgutneftgas, and Rosneft and prohibited American oil corporations from participating in Russian offshore oil projects in the Arctic. Engdahl said, with a touch of irony, “Then, just as the rouble was rapidly falling and Russian major corporations were scrambling for dollars for their year-end settlements, a collapse of world oil prices would end Putin’s reign. Clearly, that was the thinking of the hollowed-out souls who pass for statesmen in Washington today. Victoria Nuland was jubilant, praising the precision new financial warfare weapon at David Cohen’s Treasury financial terrorism unit”.

Meanwhile, nothing hinted at any trouble in July 2014… West Texas Intermediate traded at 101 USD (6,460 Roubles. 627 Renminbi. 6,440 INR. 133 CAD. 136 AUD. 92 Euros. 65 UK Pounds) a barrel, and Engdahl noted, “The shale oil bonanza was booming, making the USA into a major oil player for the first time since the 1970’s”. However, when WTI slid to 46 USD (2,940 Roubles. 286 Renminbi. 2,930 INR. 60 CAD. 62 AUD. 42 Euros. 30 UK Pounds) per barrel in January 2015, American strategists suddenly realised that they’d cut their own throat. Indeed, “the over-indebted US shale oil industry” was about to breathe its last because of the plummeting oil price. Although Washington and Wall Street made every effort to artificially stabilise the dire situation (resulting in a slowly rising oil price since February to May, when it hit 62 USD (3,970 Roubles. 385 Renminbi. 3,950 INR. 82 CAD. 84 AUD. 57 Euros. 40 UK Pounds) per barrel), the American political and financial élite underestimated the Saudi factor’s importance.

Engdahl said, “Reportedly, al-Naimi [the Saudi Oil Minister] saw a golden opportunity in the Kerry proposal to use the chance to, at the same time, kill off the growing market challenge from the rising output of the unconventional American shale oil industry. Often, al-Naimi said that he’s determined to eliminate the American shale oil ‘disturbance’ to Saudi domination of world oil market”. Alas, the Saudis are very unhappy with Washington’s shale oil advance and the Iranian nuclear deal negotiated by the Obama administration with Tehran. Engdahl emphasised, “In fact, the Saudis are beside themselves with rage against Washington. This has all added up to an iron Saudi determination, aided by close Gulf Arab allies, to further crash oil prices until the expected wave of shale oil company bankruptcies. On 29 July 2015, WTI fell to 49 USD (3,140 Roubles. 305 Renminbi. 3,130 INR. 65 CAD. 66 AUD. 45 Euros. 32 UK Pounds)”.

Morgan Stanley, the Wall Street bank, reported in panic, “We anticipated that OPEC wouldn’t cut, but we didn’t foresee such a sharp increase. This downturn would be more severe than that in 1986. As there was no sharp downturn in the 15 years before that, the current downturn could be the worst of the last 45+ years. If this were to be the case, there would be nothing in our experience that would be a guide to the next phases of this cycle… in fact, there may be nothing in analysable history”. What makes matters even worse for Washington, is that Saudi Arabia, its longstanding and subservient ally, has begun to play its own geopolitical games. On 18 June 2015 Muhammad bin Salman, the Saudi Deputy Crown Prince and Defence Minister and son of King Salman visited Russia and met with  President V V Putin. The parties discussed up to 10 billion USD (640 billion Roubles. 62.07 billion Renminbi. 637.48 billion INR. 13.14 billion CAD. 13.48 billion AUD. 9.12 billion Euros. 6.46 billion UK Pounds) trade deals.

Engdahl remarked, “Today, Saudi Arabia is the world’s largest oil producer and Russia a close second. A Saudi-Russian alliance on whatever level was hardly in the strategy book of Washington State Department planners”. Engdahl went on to say, “October 2015 is the next key point for American shale oil companies… banks will decide whether to keep funding fading American shale oil production or rollover their loans. At the same time, if the Federal Reserve raises American interest rates in September, highly indebted American shale oil manufacturers would face “disaster of a new scale”. Unfortunately, such a “doomsday” scenario may be accompanied with further unintended consequences for American and global financial system. Indeed, as a proverb says, “Curses, like chickens, come home to roost.”

8 August 2015

Sputnik International

http://sputniknews.com/politics/20150808/1025540019.html

« Previous PageNext Page »

Create a free website or blog at WordPress.com.