UN agency warns Ukraine war could trigger 20 percent food price rise: Reuters

UN agency warns Ukraine war could trigger 20 percent food price rise: Reuters
The FAO said it was not clear whether Ukraine would be able to harvest crops if the war dragged on (Shutterstock)
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Updated 11 March 2022

UN agency warns Ukraine war could trigger 20 percent food price rise: Reuters

UN agency warns Ukraine war could trigger 20 percent food price rise: Reuters

ROME: International food and feed prices could rise by up to 20 percent as a result of the conflict in Ukraine, triggering a jump in global malnourishment, the United Nations food agency said on Friday, according to Reuters.

The Rome-based Food and Agriculture Organization said it was not clear whether Ukraine would be able to harvest crops if the war dragged on, while uncertainty also surrounded the prospects for Russian exports in the coming year.

FAO said Russia was the world’s largest exporter of wheat and Ukraine was the fifth largest. Together, they provide 19 percent of the world’s barley supply, 14 percent of wheat, and 4 percent of maize, making up more than one-third of global cereal exports.

Russia is also a world leader in fertilizer exports.

“The likely disruptions to agricultural activities of these two major exporters of staple commodities could seriously escalate food insecurity globally,” FAO Director General Qu Dongyu said in a statement.

FAO’s food price index hit a record high in February, and looks certain to climb further still in the months ahead as the consequences of the conflict reverberate around the world.

FAO said only part of the expected shortfall in exports from Russia and Ukraine could be met by other countries.

“Worryingly, the resulting global supply gap could push up international food and feed prices by 8 to 22 percent above their already elevated levels,” it said.

Between 20 percent and 30 percent of fields used to grow winter cereals, maize and sunflower in Ukraine will not be planted or will remain unharvested during the 2022/23 season, FAO predicted.

FAO said 50 countries, including many of the least developed nations, depend on Russia and Ukraine for 30 percent or more of their wheat supplies, leaving them especially vulnerable.

“The global number of undernourished people could increase by 8 to 13 million people in 2022/23,” FAO said.

The most pronounced rises would be seen in the Asia-Pacific region followed by sub-Saharan Africa, the Near East and North Africa.

FAO urged other countries not to impose export restrictions on their own produce. “They exacerbate price volatility, limit the buffer capacity of the global market, and have negative impacts over the medium term,” the agency said.

A number of countries worldwide have announced food export restrictions or are considering bans to protect their domestic supplies after Russia’s invasion of Ukraine, which Moscow terms a “special operation.” 


Saudi Chemical first-half profit slips 32% to $13m

Saudi Chemical first-half profit slips 32% to $13m
Updated 10 sec ago

Saudi Chemical first-half profit slips 32% to $13m

Saudi Chemical first-half profit slips 32% to $13m

RIYADH: Saudi Chemical Co. saw its profit drop 32 percent during the first half of 2022 to SR47 million ($13 million), from SR68 million in the prior-year period, a bourse filing showed.

The chemical producer attributed the profits decline to a 6 percent decrease in gross profit during the first six months of 2022 to SR241 million.

The increase in finance costs combined with losses from interest rate hedging and foreign currency revaluations also contributed to decline.


Oil behemoth Aramco beats forecasts with record Q2 profit of $48.4bn

Oil behemoth Aramco beats forecasts with record Q2 profit of $48.4bn
Updated 10 min 9 sec ago

Oil behemoth Aramco beats forecasts with record Q2 profit of $48.4bn

Oil behemoth Aramco beats forecasts with record Q2 profit of $48.4bn

RIYADH: Saudi Aramco’s profit surged 90 percent in the second quarter of 2022, beating the median of analysts’ forecasts with the highest quarterly profit since going public in 2019.

The oil giant was expected to report $46.2 billion in net income based on 15 analyst forecasts.

Profits of “the most profitable oil company in the world” hit SR182 billion ($48.4 billion) after revenue soared 80 percent to SR562 billion, according to a bourse filing.

This is up from SR148 billion in the prior quarter and SR95.5 billion in the second quarter of 2021.

The crude producer said the results were primarily driven by rising crude prices which soared to record highs earlier this year in addition to improved downstream margins.

Aramco also maintained stable quarterly dividends at SR70.3 billion, representing a per-share payout of SR0.3198.

Recent highlights:

  • Aramco and Cognite, a global leader in industrial software, announced the launch of CNTXT, a joint venture based in the Kingdom, which will be headquartered in Riyadh. CNTXT will support industrial digitalization in Saudi Arabia and the wider Middle East and North Africa region.
  • Aramco was reported to weigh an initial public offering of its unit Aramco Trading Co. that could potentially raise over $30 billion, slated to become one of the world’s biggest listings this year.
  • Aramco joined hands with Thailand's national oil company PTT, as it expands its footprints in Asia. Both companies will work together in areas of blue and green hydrogen and various clean energy initiatives.
  • Aramco acquired US-based Valvoline Inc.’s global products unit in a $2.65 billion deal.

Oil Updates — Crude down; US offshore oil output to restart; Russian oil flows to Czech Republic resumed

Oil Updates — Crude down; US offshore oil output to restart; Russian oil flows to Czech Republic resumed
Updated 52 min 25 sec ago

Oil Updates — Crude down; US offshore oil output to restart; Russian oil flows to Czech Republic resumed

Oil Updates — Crude down; US offshore oil output to restart; Russian oil flows to Czech Republic resumed

RIYADH: Oil prices plunged around 2 percent on Friday, on expectations that supply disruptions in the US Gulf of Mexico would be short-term, while recession fears clouded the demand outlook.

Futures, however, were still on track for a weekly gain.

Brent crude futures fell $1.45, or 1.5 percent, to settle at $98.15 a barrel, while US West Texas Intermediate crude $2.25, or 2.4 percent, to settle at $92.09 a barrel. Both contracts gained more than 2 percent on Thursday.

US offshore oil output to restart after pipeline fix

A damaged oil pipeline component that disrupted output at several offshore US Gulf of Mexico platforms was repaired late Friday, a Louisiana official said, with producers moving to reactivate some of the halted production.

A failed flange connecting two onshore pipelines operated by Shell Plc in Louisiana leaked an estimated two barrels of oil. The oil, which spilled onto an area covered with gravel, has been removed, said Chett Chiasson, executive director of the Greater Lafourche Port Commission, and the flange had been repaired by Friday evening, he said.

The spill halted the operation of two pipelines that bring oil from several production facilities off the Louisiana coast, curtailing about 600,000 barrels per day of output from Shell, Chevron Corp. and Equinor, according to two people familiar with offshore operations.

On Friday evening, the Amberjack and Mars pipelines that were stopped by the leak were back online and returning to normal service, after crews completed the repairs at the Fourchon booster station, Shell spokesperson Cindy Babski said.

Shell is also in the process of ramping up production at its three platforms that deliver Mars sour crude, an oil grade popular with refiners in the US and Asia, Babski added.

Russian oil flows to Czech Republic have resumed

Russian oil flows to the Czech Republic through the Druzhba pipeline resumed after more than a week on Friday evening, Czech pipeline operator MERO said, as transit fee payments were unblocked.

Supplies via the Druzhba pipeline had been suspended to the Czech Republic, Hungary and Slovakia since Aug. 4 because Western sanctions prevented paying transit fees to Ukrainian transit company Ukrtransnafta, Russian pipeline monopoly Transneft said on Tuesday.

A European bank has agreed to process the payment for the transit of Russian oil through Ukraine, removing the cause of the stoppage.

“Supplies of Russian oil through the southern branch of the Druzhba pipeline on the Czech territory resumed at 8 p.m. today (Friday),” MERO said in a statement.

Czech refiner Unipetrol, a unit of Poland’s PKN Orlen, confirmed its refineries again started receiving oil through Druzhba and added the week-long outage had not affected its operations.

(With input from Reuters) 


Saudi Tadawul sees profit declining 23% amid record IPO listings

Saudi Tadawul sees profit declining 23% amid record IPO listings
Updated 33 min 9 sec ago

Saudi Tadawul sees profit declining 23% amid record IPO listings

Saudi Tadawul sees profit declining 23% amid record IPO listings

RIYADH: Saudi Tadawul Group Holding Co., owner of the Kingdom’s bourse, has posted a 23-percent first-half profit drop amid a record year of initial public offerings.

The group made SR278 million ($74 million) in profit during the first half of 2022, down from SR362 million in the same period last year, it said in a bourse filing.

This was coupled with an 8.3 percent decline in revenue to SR592 million, mainly due to the decrease in trading services and post-trade services.

Higher salaries and employee-related benefits further weighed on profit during the six-month period, leading to a rise of 9.8 percent in expenses to SR301 million.

The chairman of the Capital Market Authority, Mohammed Elkuwaiz, had earlier told Arab News that Saudi IPOs are on course for a record year, adding that the number of listings in the first half of 2022 has already surpassed those of last year.

Commenting on the results, CEO Khalid Al-Hussan said: “Testament to the avid growth and diversification of our market and its attractiveness is the growing number of IPOs during the first half of the year, resulting in 246 listed companies on both the main market and Nomu – Parallel Market.”

Tadawul also launched single stock futures contracts earlier this year as its second derivatives product.


Saudi banks increase loans by $77.1bn in Q2

Saudi banks increase loans by $77.1bn in Q2
Updated 5 min ago

Saudi banks increase loans by $77.1bn in Q2

Saudi banks increase loans by $77.1bn in Q2
  • Kingdom is moving toward Vision 2030 by developing the trade sector and ensuring its sustainability

CAIRO: Saudi Arabia’s bank loan portfolio rose by SR289 billion ($77.1 billion) in the second quarter of this year from the same quarter a year ago, according to a recent statistical bulletin released by the Saudi Central Bank, also known as SAMA.

Bank loans totaled SR2.42 trillion at the end of the second quarter of 2022, up from SR1.95 trillion in the second quarter of 2021, showed the SAMA report.

The SR289 billion increase was led by an SR191.1 billion growth in miscellaneous activities. Its share increased by 2 percentage points to 52 percent in the second quarter of 2022.

The data showed that the value of Saudi banks’ aggregate loan portfolio totaled SR2.24 trillion at the end of the second quarter of 2022, up 14.8 percent from the year before and up 4 percent from the previous quarter.

The annual growth in bank loans dropped to a negative in 2017 and remained below zero until the third quarter of 2018. However, bank loans have been seeing an upward trend ever since, according to the SAMA report.

From the third quarter of 2018 until the end of 2019, the value of Saudi bank loans grew at an average rate of 3.7 percent year on year; between 2020 and the second quarter of this year, it grew at an average rate of 14.8 percent year on year.

The dominating segment in the Kingdom’s loans was miscellaneous economic activity, which acquired 52 percent of the total loans this quarter.

Commerce came in second, holding 17.2 percent of total loans in the country, recording SR385.7 billion in the second quarter, showed the data.

The Ministry of Commerce in the Kingdom has been moving toward the Saudi Vision 2030 by developing the trade sector and ensuring its sustainability, according to the Kingdom’s Unified National Platform.

The platform stated: “The Ministry of Commerce’s mission focuses on improving the business environment in Saudi Arabia through enacting, developing and supervising the implementation of flexible and fair trade policies and regulations.”

Even though total bank loans expanded this quarter, two economic activities saw a quarterly decline in bank credit in the second quarter of this year: manufacturing and processing and transport and communication.

Bank loans to transport and communication fell by SR6.2 billion in the second quarter of 2022 from the same quarter the previous year.

Compared to the previous quarter, the sector dropped from 2.1 percent of total loans in the first quarter to 1.9 percent, showed the SAMA bulletin.

Bank loans given to manufacturing and processing fell by SR4 billion in the second quarter of 2022 from the same quarter the previous year.

The data showed that the sector dropped from 7.2 percent of total loans in the first quarter to 6.9 percent compared to the previous quarter.