Commodity Conversations Weekly Press Summary

The UK’s environment secretary said that food supply would not be an issue in case it has to leave the EU without a trade deal by January 2021. He explained that the supply chain proved to be “remarkably resilient” during the coronavirus pandemic. Besides, the food industry was able to find enough labourers thanks to the “Pick for Britain” campaign, ensuring there weren’t any significant disruptions in Britain’s food supply.

British farmers seem to be more concerned about what concessions the government would offer as part of trade negotiations with the US and EU. A new advisory group was launched to protect agricultural interests and make sure food and welfare standards are not compromised. 

Nevertheless, some UK lawmakers called for a reclassification of gene editing technology like CRISPR, which was classified under the same regulations as GMOs by the EU. A UK official argued that gene editing was merely “an extension of conventional plant breeding”. The National Farmers Union agreed, while another organisation warned that loosening the rules would make it much harder to reach a trade deal with the EU

As it slowly but steadily recovers from the coronavirus pandemic, China has been ramping up its purchases of agricultural products. Imports of US products, however, are still far behind the targets set under the phase one trade agreement, while US sanctions imposed in response to Hong Kong’s new security law could further deteriorate trade relations. China also took the surprising decision to ban imports from Tyson Foods following the COVID-19 outbreaks in meat plants. US exporters were asked to provide certificates to prove their food was not contaminated, something one company argued was “not based on any legitimate food safety concern”.

China’s demand for protein was boosted by the impact of the African Swine Fever and Brazil’s export sector has been reaping the benefits, in part thanks to bumper crops and the depreciation of the Real. Firms geared for exports are doing relatively well but a Cargill executive noted that the opposite was true for firms focusing on the domestic market. Consumers are starting to cut down on food expenses as the coronavirus continues to spread. The government, meanwhile, is trying to balance the need to contain the disease, protect food workers, and the importance of its food sector.

In neighbouring Argentina, the government took drastic action earlier this month when it unveiled an expropriation plan to revive the bankrupt Vicentin, once one of the largest grain exporters in the country. Sources said this would stop Glencore’s plan of purchasing a higher share in Renova, a joint venture between the two groups. Some experts argued the goal of reaching “food sovereignty” was misguided, although they believed that it should not affect exports for now. More recently, however, an official conceded that the government might review its plan and look to create a public-private partnership instead. 

The head of Louis Dreyfus Co mentioned that the company was on track to meet its sustainability targets for 2022, in part thanks to partnerships with certification bodies. The good progress was also a sign that the decision to link the financing model with sustainability goals was working. Bunge, meanwhile, said it should be able to deliver earnings to shareholders thanks to crush margins normalising and successful cost-cutting efforts. Bunge will continue to restructure and offload non-core business assets, the CEO mentioned.

While food firms have been involved in sustainability movements for some time, they are increasingly taking a political stance as well. Unilever, Coca Cola, Starbucks, Nestle’s Blue Bottle Coffee, Diageo and Hershey’s have all announced that they will temporarily stop advertising on social media platforms, as the #StopHateForProfit campaign continues to gain ground. 

The Roundup legal nightmare is close to being over – or at least Bayer hopes so – after the firm agreed to settle 95,000 lawsuits for USD 11 billion. The company has also set up a fund to deal with future cases. However, some lawyers noted that around 30,000 cases refused to settle as the financial compensation was too low, and they pledged to continue the fight. The settlement, which still has to be approved by a judge, also includes USD 400 million for farmers whose crops were destroyed by dicamba drifts. All the while, Roundup is still for sale as it is still considered safe by the EPA. And Bayer submitted to the USDA a new corn variety for approval that is resistant to a record five herbicides, including glyphosate and dicamba. 

Finally this week, the coronavirus pandemic created another unsual but excellent headline as Guinness announced that it will use “leftover lockdown beer to fertilise Christmas trees.”

This summary was produced by ECRUU

Subscribe to Blog via Email

Enter your email address to subscribe to this blog and receive notifications of new posts by email.

Leave a Reply

Your email address will not be published. Required fields are marked *