Bunge reported a net profit of USD 45 million in the quarter ending March 31, up from a loss of USD 21 million last year, mostly thanks to better margins in the oilseeds segment. The firm appointed a new chief financial officer as part of another restructure – the second in less than two years. The aim, the CEO said, is to integrate regional operations into a global model which will allow faster decision making.
Louis Dreyfus is reportedly engaged in talks with investors interested in buying equity stakes. Sources say the potential investors might include China’s COFCO or Japanese trading houses. This is part of an effort to move closer to the consumer and focus on emerging markets such as Asia. COFCO, meanwhile, could see some transformations as China is working on a plan to reorganise state-owned commodity companies. Under the change, Sinograin assets could be transferred to COFCO – making it the biggest soy processor in the country.
Still in China, Cargill announced it was building a new premix plant in the Jiangxi Province, another in a series of investment in the country’s feed industry. The plant will focus on young animal nutrition and antibiotic growth promoter-free solutions. This comes at a time when the country is struggling with African swine flu. China’s pig population should fall by some 134 million heads this year, almost 30% of the country’s total population and more than the number of pigs in the US. ADM forecast that China will have to import a lot of meat to compensate, causing prices to surge in places like the US, Europe and Australia. An analyst at INTL FCStone argued this could also force China to make efforts to please the US and settle on a trade deal.
But so far it doesn’t look like this is the case. The US has threatened to impose new import tariffs on Chinese products by the end of the week after the latter went back on some of its earlier commitments. A source said the issue was that China now wanted to make the policy changes through administrative and regulatory actions instead of making legal changes. A policy expert argued this would weaken the deal and make it hard to implement.
The WTO ruled in favour of the US last week on a 2016 case against China’s tariff-rate quotas for corn, rice and wheat. China said it would look into the decision and aim to follow WTO rules but trade analysts are increasingly concerned about the WTO’s ability to ‘handle’ China. Some are even suggesting the organisation should change their rules to deal better with the country and its state-owned enterprises. Brazil, meanwhile, is hopeful that China won’t renew anti-dumping measures on sugar when they expire next year.
One of Olam’s palm plantations in Gabon, which it manages in a joint venture with the government, has been certified by the Roundtable on Sustainable Palm Oil (RSPO). The tradehouse, which aims to certify all of its Gabon plantations by 2021, added that this was Africa’s first certified oil palm plantation to be completely on grassland. In the EU, some environmentalists are worried that the Commission’s ban on palm oil is likely to stall recent efforts to make the palm oil supply chain more sustainable. Producers, namely Malaysia and Indonesia, will likely look for new buyers in homes such as China and India where there is less concern about sustainability.
The European Commission, meanwhile, is implementing a common food waste measurement methodology so that each member state can accurately assess the amount of food that is being wasted every year. In turn, each country will be able to use this information to achieve the EU’s Circular Economy Action Plan to halve per capita food waste by 2030.
The UN warned in a new report that, on top of threatening the existence of some 1 million species, the poor state of our soil could mean that within 60 years most land will be too barren to grow enough crops to feed the world. Some suggest that creating carbon farming tax credits would be a good way to encourage farmers to switch to methods which regenerates the soil’s nutrients. However, some of these methods, such as ‘no tillage’ and using ‘cover crops’, are already spreading as farmers say they lower machine and labour costs and use fewer chemicals. The bonus is that the restored soil can, in turn, absorb significant quantities of greenhouse gas. Bill Gates, meanwhile, is working on a type of crop that could store more carbon.
Vegan meat company Beyond Meat was valued USD 3.8 billion on the first day of its IPO last week – making it the highest US listing since the financial crisis. Analysts argued that part of the hype was thanks to the support of Hollywood celebrities, adding, however, that the company reported losses of USD 30 million in 2018.
This summary was produced by ECRUU