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MADAGASCAR SIGNS A US$ 53 MILLION FINANCING AGREEMENT WITH IFAD TO BOOST FOOD AND NUTRITIONAL SECURITY AND STRENGTHEN RESILIENCE TO CLIMATE CHANGE IN RURAL AREAS

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MADAGASCAR SIGNS A US$ 53 MILLION FINANCING AGREEMENT WITH IFAD TO BOOST FOOD AND NUTRITIONAL SECURITY AND STRENGTHEN RESILIENCE TO CLIMATE CHANGE IN RURAL AREAS

A new financial agreement, signed today between the International Fund for Agricultural Development (IFAD) and Madagascar, will sustainably improve incomes and food and nutrition security for 320,000 Malagasy rural households in eight regions located in the southern part of the country.

The agreement for the Inclusive Agricultural Value Chains Development Programme (DEFIS) was signed in Rome by Gilbert F. Houngbo, President of IFAD, and Harison Edmond Randriarimanana, Minister for Agriculture and Livestock of Madagascar.

The total cost of the programme is US$250 million, including a $26.5 million loan and $26.5 million grant from IFAD. The programme will be cofinanced by the Government of Madagascar ($33.7 million), the African Development Bank ($50 million), the OPEC Fund for International Development ($20 million), the Green Climate Fund ($15 million) and by the beneficiaries themselves ($14.3 million). A financing gap of $64 million could be covered by subsequent IFAD resource allocation processes or by other financial partners to be determined during the implementation of DEFIS. The programme will be implemented over a period of 10 years in order to provide stable and predictable financing to producers.

In Madagascar, despite rich biodiversity and diverse agricultural products, 76 per cent of the population fall below the minimum dietary energy requirements of 2,133 kcals per day. The prevalence of chronic malnutrition among children under five years of age is among the highest in the world while the prevalence of poverty in rural areas is above 80 per cent. Limited investment in agriculture and in rural areas are among the chief causes of poverty and food and nutrition insecurity in Madagascar.

By supporting the national systems for agricultural development (Fonds de développementagricole, Chambred’agriculture, Centre de services agricoles, etc.), DEFIS will contribute toward achieving the Sustainable Development Goals (SDGs) by scaling up successful country programmes which have been financed by IFAD and its development partners in Madagascar.  This includes results obtained by concentrating investments in selected production hubs to facilitate agricultural services provision, products aggregation and access to market; strengthening and supporting farmers’ national institutions in charge of agricultural services provision; and promoting the establishment of partnerships and contractual arrangements between farmers and private sector firms.

To improve the productivity of smallholder family farms and better link them to markets, the new programme will concentrate its investments in eight priority value chains: rice, maize, cassava, groundnut, coffee, onion, small ruminants and honey, with three priority crops selected in each region. In addition, DEFIS will invest in the promotion of sorghum in order to build the resilience of production systems for family farms in semi-arid zones in the extreme southern regions, which are highly vulnerable to the adverse effects of climate change.  DEFIS is expected, among other things, to rehabilitate 20,000 hectares of existing irrigation develop 8,000 hectares of new irrigated schemes and install micro-improvements on 7,000 hectares. In addition, it will support the construction of 300 water points, 50 underground water catchment reservoirs for small ruminants.

Furthermore, DEFIS will build the capacity of financial service providers operating in the programme area to develop and scale-up financial products and services which are adapted to the needs of small-scale family farms. It will also develop post-harvest and market-access infrastructure. This will include 490 storage warehouses, 45 collection centres, 50 local markets, as well as 800 km of rehabilitated rural roads. The programme will also contribute to the mitigation of climate and environmental risks by ensuring that investments and new infrastructure comply with environmental standards.

Since 1979, IFAD has financed 16 rural development programmes and projects in Madagascar representing an IFAD investment of $329.5 million or $885.4 million when co-financing is included. These projects and programmes have directly benefited more than 1 million rural households.

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Chipmakers in drought-hit Taiwan order water trucks to prepare for ‘the worst’

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Chipmakers in drought-hit Taiwan order water trucks to prepare for 'the worst' 1

TAIPEI (Reuters) – Taiwan chipmakers are buying water by the truckload for some of their foundries as the island widens restrictions on water supply amid a drought that could exacerbate a chip supply crunch for the global auto industry.

Some auto makers have already been forced to trim production, and Taiwan had received requests for help to bridge the shortage of auto chips from countries including the United States and Germany.

Taiwan, a key hub in the global technology supply chain for giants such as Apple Inc, will begin on Thursday to further reduce water supply for factories in central and southern cities where major science parks are located.

Water levels in several reservoirs in the island’s central and southern region stand at below 20%, following months of scant rainfall and a rare typhoon-free summer.

“We have planned for the worst,” Taiwan Economy Minister Wang Mei-hua told reporters on Tuesday. “We hope companies can reduce water usage by 7% to 11%.”

With limited rainfall forecast for the months ahead, Taiwan Water Corporation this week said the island has entered the “toughest moment”.

Taiwan Semiconductor Manufacturing Co Ltd (TSMC), the world’s largest contract chipmaker, this week started ordering small amounts of water by the truckload to supply some of its facilities across the island.

“We are making preparations for our future water demand,” TSMC told Reuters, describing the move as a “pressure test”. The chip giant said it has seen no impact on production. Both Vanguard International Semiconductor Corporation and United Microelectronics Corp signed contracts with water trucks and said there was no impact on production.

Vanguard said it has started a drill to truck water to its facilities in the northern city of Hsinchu.

Taiwanese technology companies have long complained about a chronic water shortage, which became more acute after factories expanded production following a Sino-U.S. trade war.

(Reporting By Yimou Lee; additional reporting by Jeanny Kao; Editing by Simon Cameron-Moore)

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Oil slips after U.S. crude stocks rise amid deep freeze hit to refiners

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Oil slips after U.S. crude stocks rise amid deep freeze hit to refiners 2

By Sonali Paul

MELBOURNE (Reuters) – Oil prices fell in early trade on Wednesday after industry data showed U.S. crude inventories unexpectedly rose last week as a deep freeze in the southern states curbed demand from refineries that were forced to shut.

Crude stockpiles rose by 1 million barrels in the week to Feb. 19, the American Petroleum Institute (API) reported on Tuesday, against estimates for a draw of 5.2 million barrels in a Reuters poll.

API data showed refinery crude runs fell by 2.2 million bpd.

U.S. West Texas Intermediate (WTI) crude futures were down 55 cents or 0.9% at $61.12 a barrel at 0136 GMT, after slipping 3 cents on Tuesday.

Brent crude futures fell 38 cents, or 0.6%, to $64.99 a barrel, erasing Tuesday’s 13 cents gain.

Investors will be awaiting confirmation from the U.S. Energy Information Administration later on Wednesday that crude inventories rose last week, despite the hit to shale oil production amid the unprecedented icy spell in the U.S. south.

“The key question is how quickly does U.S. oil supply recover. It looks like supply will recover faster than refineries, and supply is going to outpace demand in the next few weeks. That will give negative weight to the market,” Commonwealth Bank analyst Vivek Dhar said.

The price retreat is being seen as a pause following a rally of more than 26% to 13-month highs in both Brent and WTI since the start of the year.

Prices have jumped due to the U.S. supply disruption and supply discipline by the Organization of the Petroleum Exporting Countries and allies, together called OPEC+, led by an extra 1 million bpd cut by Saudi Arabia.

At the same time stimulus spending to boost growth, investors rotating into commodities, and hopes that the rollout of vaccinations could lead to an easing of pandemic restrictions are all buoying oil prices.

(Reporting by Sonali Paul; Editing by Edwina Gibbs)

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Oil settles mixed amid post-storm uncertainty

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Oil settles mixed amid post-storm uncertainty 3

By Laura Sanicola

NEW YORK (Reuters) – Oil prices settled near year-long highs on Tuesday on signs that global coronavirus restrictions were being eased, although concerns about the pace of a U.S. economic recovery and the return of Texas oil production kept gains in check.

U.S. crude settled down 3 cents to $61.67 a barrel, still close to its highest levels since January 2020. Brent crude <LCOc1> settled up 13 cents, or 0.2%, to $65.37 a barrel.

Both contracts rose more than $1 earlier before retreating.

Shale oil producers and refiners in the southern United States are slowly resuming production after 2 million barrels per day (bpd) of crude output and nearly 20% of U.S. refining capacity shut down because of last week’s winter storm.

Traffic at the Houston ship channel was slowly returning to normal. Production, however, was not expected to fully restart soon and some shale producers forecast lower oil output in the first quarter.

Some oil production may never come back, commodities merchant Trafigura said on Tuesday.

After the cold snap, U.S. crude oil stockpiles were also seen falling for a fifth straight week, while the inventories of refined products also declined last week, an extended Reuters poll showed.

“It appears that last week’s severe cold spell and related Texas power outage could be affecting the weekly EIA data into the middle of next month,” said Jim Ritterbusch, president of Ritterbusch and Associates in Galena, Illinois.

There were also concerns over the U.S. economic recovery, which the chair of the Federal Reserve, Jerome Powell, said remained “uneven and far from complete.”

He said it would be “some time” before the central bank considered changing policies it had adopted to help the country back to full employment.

Commerzbank analyst Eugen Weinberg said the recent oil price rise was buoyed by upbeat price forecasts from U.S. brokers.

Goldman Sachs expects Brent prices to reach $70 per barrel in the second quarter from the $60 it predicted previously, and $75 in the third quarter from $65 forecast earlier.

Morgan Stanley, which expects Brent to reach $70 in the third quarter, said new COVID-19 cases were falling while “mobility statistics are bottoming out and are starting to improve”.

Bank of America said Brent prices could temporarily spike to $70 in the second quarter.

(Reporting by Laura Sanicola in New York; Additional reporting by Bozorgmehr Sharafedin in London and Jessica Jaganathan in Singapore; Editing by Matthew Lewis and Mark Heinrich)

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