As the world is still cautiously analysing the impact of the new coronavirus outbreak, it has been almost two years since the first cases of the African swine fever were detected in China and some of the long-term consequences are now clearer. For one, up to 25% of the world’s pig population died, while a new report suggested that only large-scale industrial pig farms were able to overcome the disease and are now reaping the benefits of soaring prices. In contrast, China’s 40 million small-scale farmers, who did not have the funds to recover their losses or the organisation to apply for government help, might have to stop herding pigs as a result.
Some exciting news was reported by researchers around the world who have successfully tested safe and effective vaccines against swine fever. Teams in China and the US reported some successful tests, although experts warn against being too optimistic too soon. An important step will be to find a vaccine that is broadly applicable to different strains, on top of finding a way to address contamination in the wild boar population. In the meantime, the USDA published its action plan to deal with an outbreak in the US. The country would ban all shipments of pigs for at least three days in the case an infection was detected.
Commodity markets were affected by the sudden drop in oil prices this week following the dispute between Saudi Arabia and Russia. Many agricultural producers found out that the price of their products is now tied to energy prices because they are used to make biofuels, such as EU rapeseed, American corn, Brazilian sugarcane and Indonesian palm oil. As one journalist put it, farmers are now also energy traders. On the other hand, some suggested that oil prices no longer have an impact on renewable energy investments in the short and medium-term. Only an unlikely structural shift in oil prices would change the situation for clean energy producers, like Brazil’s ethanol sector.
Cargill announced a partnership with Rainmaking to find solutions to decarbonise the shipping sector in Singapore. Rainmaking launched a similar program in Europe which finds viable technological solutions and encourages industry leaders to support them. In Sweden, Sekab and Vertoro from the Netherlands announced the construction of a demo plant that will make a proprietary blend of ethanol from waste wood products. The fuel will initially be used by the shipping industry but could also serve for cars and planes.
The private equity arm of the Rabobank Group, Rabo Corporate Investments, announced an investment in Protix BV, a Dutch producer of insect protein. The company makes an alternative to animal and fish feed using the larvae of the black soldier fly. Meanwhile, the plant-based meat producer Impossible Foods said it was able to address scaling issues and reduced prices by 15% for food service distributors. Its products still cost around USD 7.90/lb, compared to USD 1.79/lb for 81% ground beef, but better than the competitor Beyond Meat which is still selling for around USD 11.98/lb.
Investors are now looking at synthetic palm oil, including a Bill Gates fund which announced an investment in C16 Biosciences, a start-up that produces palm oil from food waste. However, experts note that the current technology is far from being scalable, although it could help address a shortage of certified sustainable palm oil. In the same vein, PepsiCo expanded its commitment to source only sustainable palm oil to cover third-party suppliers instead of only direct suppliers.
PepsiCo is also working to shift away from depending too much on sugary soft-drinks and announced that it will buy Rockstar, an energy-drink brand, for USD 3.85 billion in an attempt to increase its presence in the fast-growing category. Interestingly, however, sales data from Arca Continental and Coca-Cola Femsa in Mexico show that the consumption of sweet beverages continued to increase in the 2014-19 period despite the introduction of a sugar tax in 2014. This includes beverages with high and low sugar content.
Finally, Bloomberg compiled a great table of recent dramatic weather events and their impact on prices, such as warm weather in the EU, drought in Thailand and Australia, or a salinity buildup in Vietnam.
This summary was produced by ECRUU