The UK’s Food and Drink Federation (FDF) said exports to the EU dropped by 75% in January, when compared to December, because of Brexit. Nonetheless, a UK minister claimed that trade flows had returned to normal levels in early February. A House of Lords sub-committee seemed to disagree, however, as it noted that non-tariff barriers would continue to slow trade for a while. Exporters now have to deal with more paperwork which increases costs. Moreover, the UK delayed the implementation of customs checks for EU imports until October. As a result, the FDF warned that the “full impacts of the end of the transition on imports from the EU will not be seen until 2022.”
In China, meanwhile, COFCO is working on merging its domestic units with COFCO International ahead of a potential Initial Public Offering (IPO), sources suggested. The IPO, estimated at USD 5 billion, could happen later in 2021 or at the start of 2022. The new entity would be key to China’s food security, while the unit handled over 100 million mt of commodities in 2018, generating USD 31 billion in revenue.
The global availability of containers remains tight following the surge of imports from China, but Moller-Maersk suggested that the situation should return to normal in the first half of the year. The lack of containers is already leading to supply issues, however, as coffee stocks in the US are reportedly running dry. The shortage might also be due to a fall in output in Brazil, while a broker commented that the coffee market could be entering into a structural deficit.
The blockage of the Suez Canal caused by the Ever Given container ship could potentially add even more delays to global shipments. Some 12% of global trade passes through the canal and hundreds of ships are currently waiting for the vessel to be moved. Tug boats could free the ship within the next few days which would minimise the impact, although a delay of a week or more would have major implications.
As if the situation wasn’t complicated enough, the number of containers that fell off cargo ships surged since November 2020, with 2,980 containers lost, more than twice the annual average. Shipping firms blamed the bad weather and storms. Experts, however, explained that the container shortage pushed companies to use older vessels and to pack them as much as they can which increased the risk of losses. A company that lost containers mentioned that “if anybody has investments in deep-sea salvage, there’s some beautiful product down there”.
A new study published by the FAO this week estimated that global food production was responsible for 34% of total greenhouse gas emissions in 2015, down from 44% in 1990 but much higher in absolute terms. Out of the total, 71% of emissions came from the farm and land use, while the other 29% came from distribution. Researchers hope the study will help design mitigation measures to make our food more sustainable. Danone already acknowledged the report and highlighted its own efforts to reduce its environmental impact.
Danone’s former chair and CEO was focused on purpose-driven capitalism but a small investor was able to push for his removal based on his governance and financial performance. Bluebell Capital was able to form a consensus among large shareholders to replace him. Activists investors are reportedly ready to push for changes again after a pause during the pandemic. For one, Robeco Institutional Asset Management, which manages USD 2.4 trillion in assets, is pushing for changes to the EU’s CAP. The revised program needs to account for climate targets when calculating payments, the group argued.
Another report published this week suggested that Europe and North America will reach peak meat consumption by 2025. Alternatives, such as plant proteins or cultured meat, will continue to improve while consumers’ preference will keep shifting towards healthier and more sustainable products, the paper suggested. The alternative meat market should reach USD 290 billion by 2035.
Investors certainly believe in the future of alternative meat products, as Eat Just just raised a further USD 200 million, bringing total investments to USD 650 million. The group makes egg alternatives using plants and cultivated meat. Similarly, Meatable raised USD 47 million this week. The group cultivates meat without using the controversial fetal bovine serum, although the process currently costs USD 10,000/lb.
Being stuck at home has changed the eating habits of many people but this journalist discovered that eating three meals a day is not actually based on nutritional or biological science. Eating three meals a day is a recent consequence of industrialisation and nutritionists suggest that eating when you are hungry instead of at meal times can be just as healthy, as long as the total quantity of food remains more or less constant. The journalist took this to heart to continue having his one Big Meal per day.
This summary was produced by ECRUU
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