New Career Path, Uncertain World

"Too big to fall" is sadly a word we heard too often last week as my short visit to the United States was marred by the spectacular collapse of Lehman Brothers, and the nearly collapse at AIG. While my visit to the redwoods delivered several fallen giants, I am sad, AIG is not only my insurer, but sponsors to my favourite football (soccer to Americans) clubs, and as a result, my parading around in the US in a Man U shirt caused quite a stir...not that united were well known there, but because the AIG emblazoned across my chest was well recognised by Americans who thought I was getting full use of the shirt before it became useless.
Anyway, the bad word here is equitisation of loans, the root cause for all the sub-prime led disasters facing the US Banking system, worse still, the many overseas who have joined the crowd as the increasingly sheep like financial derivatives and money markets trends reveal that not many are actually in the know for what to expect.
For every loser, there must be a winner (the evil short seller in this case) and we only wonder who they are, and if any more short selling will only end up ruining the investor who takes short term profits in exchange for institutions that hold the future and hard-earned savings of many millions.
Rescue packages sadly go to fat cats and institutions and not to the ground where the suffering is acute and hence one imagines that any rescue at this stage seems only to represent a "delay" rather than a solution. Then again, this is just my humble reading of the situation.
The good news, as financial markets and equity markets overall get him, I am ever more involved in supporting agricultural products and international trade, which i would say were the few that rose on the back of a loss of confidence in the banking and investment sector as money moved back to companies with hard products, products that sustain lifem the food and agricultural sector.
On my career front, I like the people, love the concept and vision and hope that the next few months and years will see us grow into a respected group that can be trusted and relied upon for our readings of the market place. On my personal performance, so far, so good...my reports seem ok, I am always learning new skills and am happy to be closer to the people I have known over the years to offer even more!
Hope I will have time to post more updates. "Sunrise or sunset"...well all I can say is a day is not complete without both!

Memories - Rice Congress of the Americas

These are a few of the pictures, rememberance to what was a well timed event, but one held as rice prices reached new heights to offer a glimpse of what the world could be dealing with if that price race continues.

It not over yet - the world need to work together to solve this one, but the meeting was a nice wake-up call to act now, or feel some dire consequences that would certainly shake the world and politics as we know it.

On a more light hearted note, this was my first visit to Brazil, and the people, the places and the friends I now have add to what was a good business meeting.

Hang-Gliding in Rio

Here is "Zero" and I. Zero is my instructure on this bold day in Rio in May when I did my first tandem hang-gliding flight.

It was a thrill...as you move from apprehensive, nervous to sheer wonder as you take flight and look at the wonders and natural beuty offered by Brazil.

A few bikinied babes on the beach did not do any harm to the sights...and of course I landed on all fours...and enjoyed by Chopp beer after!

Here's to a nice memory of Rio and an experience I can say was special, and one I will remember for the rest of my life. Cheers!

Sustainability and the Rice Industry: Can the world recognise farmers, farm assets and value them correctly?

So rice prices are falling and the whole word talkes a collective breath of releif in anticipation of affordable food prices, perhaps some pressure off governments that genuinely started wondering if they would face political crisis as the poor (and populous) voter starved.

There is a lesson here...we should not leave our guard down. I hope that the world has realised just how easy it is for the world to move from seemingly normal situation to CRISIS.

I hope sincerely that the world does not back down from this "wake up" call. In fact falling prices for now allows us to focus on the issues on hand and more on the long term than simple survival.

We must remember just how easy it was for panic to set in when India, Egypt and Brazil banned rice exports to create what happened between October and June of 2008.

Research on improving yields, reducing reliance on water and perhaps event come up with a better formula that the current systems in place.

Farmers deserve more
Farmers are undervalued
Farm land is undervalued
Farm products deserve more respect

Just take an example...most of us as employees expect a pay increment or better earnings from year to year just to make up for inflation, rising costs...if not any other more ambitious objectives.

If you take equity markets since the 1900s....any fund manager will show you that they have always performed well over the long term
Farm products have been declining in real terms for decades and even the 2008 "boom" in prices looks only a blip when compared to the real value of commercial and residential property, eqyity markets or one of many other economic/industrial indicators

Fact is, rice, wheat or corn is adjusted up 5% since the 1900s, would not only be more expensive, but probably not seen as a "food crisis". Prices rose in 2008 by some 300% in some cases, and this was seen as unacceptable...as compared to a program that allows farmer incomes to go us (just like us), the example of 5% a year since the 1900s would actually be less painful and allow a lot of our food assets to be valued correctly.

Imagine if all the global wheat or rice assets were owned by only 2-3 companies (just like in the case of iron ore, coal or some minerals where a few giants control markets)...we would have paid the price long ago.

The farm community has long been overlooked as a service community that has less desire - THIS IS WRONG, even if it was due to ignorance and negligence.

I'm trying to put the numbers together so we can see the visuals, but the facts remain the same - we just have a massive opportunity to do something instead of pretending that 2008 was just a once-time situation.

Sentiment...and oil rule commodities...but keep fundamentals close

Its been a while since my return from Brazil, and all I can say for now is that cmmodities traders and speculaters need only look at the oil price for direction as it seems all other fundamentals do not count. In the last month or so, we see freight rates at record highs, rice has gone past 1000$ and while its down now to 800 levels, once gets the feeling that prices could go anywhere...while most tell me prices are likely to trend down in the coming weeks/months, watch the weather, watch India, watch the crop numbers towards the end of the year to get a feel for where we are headed.

I'm personally more concerned about the longer term...water...land...productivity....as the short terms seems driven by sentiment and the flow of hot money that suddenly see commodities as a viable place to park money.

Its largely sentiment driven, with the sudden launch of commodity funds, zero coupon bond like investment vehicles and a plethora of unit trusts, funds etc seemingly only adding to the sentiment factor.

Watch this space, once again I promise more, as my work takes me back to coffee, rice, coal, iron ore and steel and the global shipping that oils the wheels of commerce.

PS Do not forget the fundamentals, as when the fund decide to exit, this is all we will have...and pay attention to the physical trades and not just the paper trades.....and don't forget inflation...seems we have been cursed b y "interesting times"!

The Global Rice Situation - A personal observation

The global rice "crisis" has so suddenly emerged as the current buzz words in the global media are "food security", inflation, rising commodities prices and how poorer nations will suffer. Taking a step back, one will realise that the media missed out one rather important fact...the issues have not changed for years, its only now, suddenly when prices shoot up that everyone is in a frenzy.
Government are busy, trying to avert inflation, starvation and well....losses in the polls. what has happened? In Rice, India effectively pulled the plug on some 3 million tonnes of rice from a world trade (10% of world rice trade), Vietnam decided to play it more cautiously and not rush out to sell their crop, as did the Thais. We must remember that the rice "trade" represents a paltry part of rice production...but we must also remember the poor importers who now struggle - The Philippines I felt actually did a good job, they did not get all they needed, but were organised and got a large part of their needs early, unlike the other net importers. Bangladesh and Africa I fear will feel the brunt. Both were key Indian supply markets, and both also represent the poorer segment of importers who will struggle to meet price and freight demand that is placed upon them. Indonesia will be interesting to watch as well, and maybe Cuba, to see if their relationships in Vietnam support their needs.

My only concern, we are talking about people, and poor people at that who will pay the price of what I see as a loss of interest from the global economies on agriculture. We were too busy building factories, removing agricultural land to make way for golf courses (and factories no less), we did not heed the warnings on water, on the need for another green revolution, and simply took for granted low food and commodity prices that have been the feature of the 90s and well...for most of the 2000s.

Another concern is the sudden rush of fund money into commodity markets. These funds are needed elsewhere, and if at all only contribute to more inflation as they create smaller bubbles within relatively small markets...be it coffee, sugar, cocoa, wheat, soy or oil palm...we now see even pension funds and other longer term vehicles take a closer look at commodities markets, where investment opportunities via equity is somewhat limited due to the nature of business (you still can't take a punt on the farmer whose importance is rising fast, only a handful of agri-business and trade companies listed in a number of stock exchanges). This money only seems to create more volatility, render some contracts useless as tools for hedging and add more risk. I'm not against funds and their motives, but fear for the worst.

So where are we now? I feel this is an excellent opportunity for life sciences, crop science and biotechnology, yes, GM foods could come to the rescue, if not at least be out to an extreme test, a test that will measure their true potential. But are the masses open to this? My humble take on this: The rich citizens of the EU will continue to exercise caution as they still can't trust their governments who have so often hidden the truth, the Americas and Asia, and Africa will have no choice (ie political failure, riots, starvation, the poor will pay the price, but also hold the political card), but to take a good look at the offerings. But don't forget, Food-Crop Science is a business, so there is a price to pay.

So where are we? Water shortage is still there, the farmer is still poor (well maybe not as poor as before), the farming community continues to get smaller, and there is still no long term solutions on hand as most still focus on the short term.

There is an urgent need to look at the long term, groups like IRRI abd CGIAR and just about that, and yet the rich sovereign funds, fund managers who are tasked to grow our retirement and investment monies are only concerned about market gains (and understandably, they get paid to show a return). The return on an investment in good research that yields us solutions for the future will come in the form of affordable food, political stability and the opportunity for economies to focus on a balanced, sustainable model for growth and development.

There is no question that the world is at crossroads, and needs to invest in our garden to for more fruits, fruits that will avert starvation!

Nitin's 8th Birthday

why was I missing for most of Jan...was doing family time!!!