Commodity Conversations Weekly Press Summary

Global grain merchants continue to benefit from high commodity prices and tightening global supplies, as Bunge surprised market participants when it reported a net income of USD 551 million in the fourth quarter of 2020, compared to a loss of USD 51 million in the same period last year. The CEO highlighted the oilseed processing segment and exports out of North America, as he noted that a strong demand and tight supply will also help the firm in 2021. Moreover, the Brazilian sugar and ethanol unit, now operated as a joint venture with BP, expects to see its best year on record this season

Similarly, Wilmar reported a net profit of USD 1.53 billion in the 2020 financial year, up 18.6% on year, as all segments reported strong growth. The plantation and sugar unit also performed well which helped compensate for the feed and industrial products segment. The recovery of the Chinese economy and the reopening of restaurants and hotels could continue to support demand, the firm said. 

The government of Argentina suggested that firms like Bunge and Unilever were artificially hiking food prices by holding back on production. The production ministry launched an investigation to assess if and why the firms failed to produce at maximum capacity to keep prices under control. Some experts estimate that the country’s inflation rate could hit 50% this year and local investors warned that the measures implemented so far – like price caps – were doomed to fail. 

Cargill and Maersk launched a new service to simplify the procurement of fuel for the two groups’ combined tanker fleets. The companies hope that collaborating will provide better fuel prices and services amid an increasingly complex bunker market. The initiative will start on April 1 and will eventually open up to other trade houses. 

After months of insisting that the coronavirus could not be transmitted through frozen food, the WHO backtracked and conceded that some outbreaks, particularly in China, were possibly due to frozen food packages. A scientist who just returned from China as part of an investigation into the origins of the virus conceded that the outbreak in a wholesale market in Wuhan could have been sparked by frozen wild meat. Nevertheless, the agency highlighted that food transmissions remained exceedingly rare and would only be possible in specific and unusual circumstances. 

Animal welfare activists are using the pandemic to push for a complete ban on the trade and consumption of wild meat. However, a new study published in Current Biology argued that such a ban could have the unintended impact of damaging the environment, making food insecurity worse and, ironically, increasing the risk of diseases. Researchers explained that the protein from wildlife would have to be replaced by animal agriculture, which they describe as “the greatest threat to natural habitats and biodiversity, and also the most significant driver of emerging infectious diseases”. 

Another new report shines a light on wildlife that is often overlooked: the fish populations in freshwater. The report, called The World’s Forgotten Fishes, warns that our rivers and wetlands are in such poor conditions – because of pollution, dams and sewage – that a third of freshwater fish are threatened by extinction. In the UK, sturgeons and burbots have already completely disappeared, while salmon and eels are endangered. 

The good news, meanwhile, is that investments and technology are making aquaculture increasingly environmentally-friendly. When done correctly, an expert at Alphabet argued that “seafood is one of the lowest carbon sources of protein available”. The FAO estimates that 52% of the fish consumed in 2018 was farmed and that it will reach 60% by 2030. The Philippines is even pushing backyard farmers in highly urbanised cities like Quezon City to switch to aquaculture instead of keeping pigs. The drive is aimed at reducing the risk of African Swine Fever and a loss of income.

Aquaculture is enjoying a wave of interest these days but it is an incredibly old practice – just like the idea of using plants to make meat alternatives. This journalist travelled to Taiwan to sample what Buddhist monks have been working on since at least the 10th century: using soy to make mock meats and help transition to vegetarianism. The story also follows a Taiwanese immigrant who struggled to sell plant-based meats in her New York shop in the 1980s until she renamed her restaurant “Lily’s Vegan Pantry”.

Cheese lovers can read some excellent news this week as Wired published an article called: “Cheese Actually Isn’t Bad for You”. Studies seem to indicate that eating cheese has a neutral, or perhaps even positive, impact on weight loss, diabetes and heart disease. This could be due to the fact the cheese isn’t actually that calorific and contains bacterial cultures which improve the gut microbiome. The reason many believe cheese is fattening is probably that it is often added on top of unhealthy meals, like pizza. 

This summary was produced by ECRUU

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Commodity Conversations Weekly Press Summary

China’s Fourteenth Five-Year Plan (2020-25) will focus on stabilising national food security, notably grain management. An official at the National Development and Reform Commission noted that the state’s reserves were already playing their roles in market stabilisation, arguing that “we have enough reserves to respond to any risks or challenges.” 

Massive food imports are a cause for concern for the Communist Party, however. As such, several analysts forecast that crop imports are likely to ease by the end of this year or the next, and that the recent surge was more the result of frontloading demand than an actual increase in consumption. A Chinese consultant suggested that there was enough food in the country and that a big part of imports was going into state reserves. 

Besides, China should see a bumper grain crop this year and farmers are being told to stick to planting grains. Billions are being poured into the National High-Quality Grain Project which aims to build a “national industrial food security belt.” The project includes developing higher yielding seeds and cutting down on losses in the supply chain. China is also headed towards a pork surplus before the end of the year, according to an economist. An analyst at Rabobank noted that this would have significant repercussions on global trade, notably for countries that have been boosting swine production to export to China. On the other hand, some say that the new African swine fever could slow the recovery in the swine population. 

China has also been focusing on diversifying who it imports food from. A report by the USDA said the combination of trade issues, the pandemic and the swine fever have exacerbated China’s intent to avoid depending on US and Canadian supply. The competition is only expected to get tougher, the report said, urging US producers to focus on developing premium products, notably foods that have nutritional and health benefits. 

In China, the government has stepped up efforts to educate consumers to check for counterfeit food and drink products which have been known to cause poisoning. The government identified 1,400 counterfeit products between May and November 2020, a surge attributed to the pandemic-led increase in online shopping. It is encouraging consumers to check labels to spot inconsistencies. 

The UN Committee for World Food Security endorsed the first voluntary guidelines to end hunger last week as an estimated 3 billion people lack access to healthy food. This comes as a report by Bloomberg warned that global meat prices are about to surge as a result of higher corn and soybean prices. Feed costs have gone up by a third, with increases expected to be felt for most types of meat. 

Similarly, companies such as Kraft Heinz, Conagra and Unilever warned they would increase the price of food products that are the most exposed to the increase in grains, sugar and edible oils prices. The US Consumer Price Index showed that food prices were up 3.7% on year in January. The US Federal Reserve, on the other hand, downplayed the issue, arguing that it was a one-off price hike and did not qualify as inflation. 

Regardless, the US President passed an executive order earlier this month committing to fully refund restaurants providing food aid. The idea is to allow those who need help to get a nutritional cooked meal – instead of unhealthy packaged food – and help restaurants with occupancy rates. However, an analysis by The Counter argued this would not be as easy as it looked. The government body in charge of refunding is known to be slow, and there has been no agreement as to what are “approved expenses.”

Mars Food, meanwhile, committed to delivering 5.5 billion healthy and sustainable meals to families globally by 2025, having already achieved its target for 1 billion more healthy meals by 2021. The group’s strategy is to focus on food accessibility, awareness and content reformulation by, for instance, increasing fibre and reducing salt content in food. 

The US spent USD 770 billion on restaurant orders in 2020, out of which 63% was for takeout, according to a new report. Around two thirds of the takeout orders were to restaurants that only offered sit-down dining prior to the pandemic. The good news for restaurants is that consumers were found to spend almost 50% more when ordering through a digital platform. But sometimes, it can be tricky to get your food from the restaurant to your home. A student in the UK got quite a shock when her UberEats driver told her he’d eaten her order. And he wasn’t joking. 

This summary was produced by ECRUU

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Commodity Conversations Weekly Press Summary

Some developing nations are starting to struggle with rising food prices, a consequence of trade disruptions caused by the pandemic, export curbs in places like Argentina and Russia, higher commodity prices and depreciating currencies. Governments now have to decide whether to prioritise economic growth or step in to control inflation. The Brazilian central bank recently hinted that it would change its priorities and focus on keeping prices under control. Experts say Russia and South Africa are likely to focus on lowering food prices as well. 

In contrast, some countries are actively looking to remove trade barriers and sign new free trade agreements. The removal of trade barriers could be one of the most effective ways of addressing food security and nutrition issues, according to an economist at the World Bank. He highlighted the African Continental Free Trade Area (AfCFTA) which was implemented at the start of 2021. 

The UK is also looking for new trade partners and announced that it would apply to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). The deal would only have a small impact as the region represented 8.4% of the UK’s exports in 2019, the same as exports to Germany alone. At the same time, some estimates suggest that the UK’s exports to the EU dropped 68% in January because of the UK’s departure from the bloc. 

Trade disruptions and higher raw material costs pose a challenge to food producers who have otherwise been dealing with a strong consumer demand amid the pandemic. Unilever revealed that its margins fell below initial estimates which affected revenue growth. Costs are expected to remain high in 2021 and weak currencies in emerging markets could start to impact purchases. 

Raizen announced it was buying Louis Dreyfus’ Biosev for BRL 3.6 billion (USD 670 million) this week, which some say is a sign Louis Dreyfus is taking another step towards exiting the sugar industry. The head of Raizen – a joint venture between Shell and Cosan – said that the final price tag was a good discount. The sale of Biosev marks another exodus from the sugar industry by the ABCDs, shortly after Cargill said it would sell its stake in Alvean. 

The CEO of Cargill revealed that the firm was looking for acquisitions to enter the aquaculture market. Cargill already owns 38 fish feed facilities across 20 nations but is now looking to produce its own seafood products. The CEO argued that global meat demand was still rising despite the growing popularity of plant-based protein, as he highlighted that fish was the fastest-growing protein source. 

The car and the drive-in experience is making a comeback as restaurants try to adapt to the restrictions imposed by the coronavirus. Many fast food chains were looking to move away from drive-ins and some cities even banned them completely in 2019, but restaurants recently unveiled new designs centered around the car. Some chains like Starbucks and Subway were disadvantaged by their focus on walk-in customers and have had to close hundreds of restaurants in cities with no car access. 

The pandemic has also shined a light on so-called cloud-kitchens like the Dubai-based Kitopi. The firm handles delivery orders from multiple food brands and is looking to expand across the Middle East and Southeast Asia. The delivery industry in the Middle East is growing fast but the head of Careem, which was acquired by Uber for USD 3.1 billion, argued that the sector was currently “not sustainable”. Carem announced that it will no longer charge a commission but a fixed fee to help food suppliers. Noon, a competitor, also announced that it will cut its commissions to better compete with Deliveroo and Talabat. 

Regulators in the US have already capped the fees collected by delivery services in Washington state and New York City. Rhode Island now wants to implement a maximum fee cap of 15%, half of what some services currently charge, until the Governor removes coronavirus restrictions. In Australia, New South Wales is looking to protect delivery workers by instructing companies to avoid imposing unreasonable delivery deadlines and limiting their shift to 12 hours. Workers currently have limited protections as they are classified as independent contractors. 

The UN published a new report on the environmental footprint of our food and – perhaps unsurprisingly – recommended switching to a plant-based diet as the best way to reduce the carbon footprint of food, followed by the need to set aside land for nature and improving our farming practices. For more detailed recommendations, the BBC unveiled its “Foodprint Calculator”, which you can find here

This summary was produced by ECRUU

 

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Commodity Conversations Weekly Press Summary

Over the past few months, shippers have been rushing back containers to China to capture the high premium, resulting in a shortage of containers elsewhere and crops destined for export piling up. The head of Hapag-Lloyd said this week “the charter ship market is, at the moment, basically sold out.” Some exporters are switching to shipping in bulk as a result which is causing freight rates to soar and could result in more expensive food. Bloomberg added that China’s Covid customs clearance processes were exacerbating the situation by causing delays at ports and a piling up of cold containers waiting to be cleared. 

Chinese customs defended themselves, saying that checks at exporting countries were insufficient which increased the need for safety procedures on arrival. Customs officials said they had tested 1.3 million items as of mid-January and found 47 items positive with the virus. The China Federation of Logistics & Purchasing said the number of contaminated items was increasing, a sign that China should continue to follow strict procedures. 

A Chinese shipping analyst argued that the main issue was the slow pace at which containers were coming back to China due to lower port efficiency in other countries, and notably the US, as a result of Covid measures. He expects that the shortage will continue until Mar-Apr.  

An official at the UN’s World Food Programme (WFP) said China’s buying spree was pushing up food prices and exacerbating the risks of hunger in import-dependent countries. The situation is made worse by countries limiting exports, such as Russia, which could spook other countries into following suit. The WFP had said back in November that it was struggling to source food for humanitarian aid. As a result, and following a suggestion from Singapore, some 53 WTO member countries agreed last week to facilitate the export of food for non-commercial humanitarian purposes. 

A bioeconomist in Belgium warned that the Covid-led trend to prioritise locally sourced food was not necessarily better for the environment. She argued that the pandemic had shown that our supply chain was, in fact, “very robust” as there were very few food supply issues in Europe. Besides, she explained that it would take twice as much land to consume only local livestock and that local products tend to be more expensive and therefore less accessible to the poorer section of the population. 

While a big chunk of China’s crop buying is going to feed its growing hog population, the CEO of plant-based meat maker Impossible Foods said he was committed to substituting every animal product currently in use. The company announced a 15% price reduction at the wholesale level in the US in a bid to become more competitive. Future Meat said it managed to reduce the price of a quarter-pound serving of its cultured chicken breast to USD 7.50, down “1,000 times over the last three years.” A family pack of Impossible Burger ground beef still costs USD 65, meanwhile. 

Beyond the cost, the taste of meat alternatives continues to be an issue. Impossible Foods uses genetically modified (GM) ingredients, notably soy leghemoglobin, to replicate the taste and feel of meat, some of which have not been cleared by countries like the UK. Future Meat tackles the problem differently by using both cultured meat and plant-based ingredients, or what it calls the “best of both worlds.” It also makes its own cultured fat to avoid using palm oil or having to add a lot of salt. 

The world of luxury dining won’t be left behind with Michelin-starred restaurant Disfrutar tying up with Novameat to create the world’s “biggest cell-based meat prototype.” The Counter said it looked like “an ottoman” but you can decide for yourself here

An analysis on Seeking Alpha argued that Danone’s core dairy business was at risk due to the exponential growth of the plant-based market. Oat milk company Oatly, which saw a sales growth of almost 100% in 2020, is taking on the challenge of converting the sceptics. The company identified middle-aged men as most unlikely to switch to a plant based diet and put together a provocative and humorous ad campaign called ‘Help Dad’ to get the younger generation to push them to make the switch. 

This comes at a time when research by Euromonitor showed that consumers increasingly want to buy products from brands whose values they are aligned with. In the same vein, in the US, Coca-Cola announced it would withhold up to 30% of its legal fees from law firms that do not have the minimum diversity requirements. The group’s global general counsel said that good intentions were no longer enough. 

This summary was produced by ECRUU

 

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Commodity Conversations Weekly Press Summary

The US shipped record amounts of corn and soybean to China in the last quarter of 2020, just as the dry weather in South America led to forecasts of poor crops and pushed up prices. This helped grain merchants post impressive results and ADM’s share price reached a new record while Bunge’s reached the highest since 2018. Analysts say the outlook for 2021 also looks promising for grain traders and farmers, although they warn that US farmers might now look to significantly increase their output thanks to a sharp rise in income. 

US firms were not the only ones to benefit from strong Chinese demand in 2020 as COFCO saw its revenue exceed CNY 500 billion (USD 77 billion) for the first time, including profits north of CNY 20 billion (USD 3 billion), according to Chinese media. As a result, COFCO became the world’s second-largest grain trade house after Cargill. 

China’s impressive import pace might not last, however, as the country continues to issue warnings that frozen food imports could be a source of coronavirus contamination. Some shops have now completely banned the sale of imported meat and supermarkets in Beijing and Shanghai need to store imported meat on separate shelves. Most experts still doubt the idea that frozen food and packaging can be a source of contamination, although a draft WHO guidance which was released by error outlines the potential risk of the virus spreading through the cold chain. China imported a record amount of meat in 2020 to rebuild stocks but Rabobank warned that meat imports could drop 30% in 2021. 

Food firms are being criticised by government officials and human rights groups for their involvement with factories in Xinjiang that probably rely on forced labour from the Muslim Uyghur ethnic group. Coca-Cola’s factory close to Urumqi was highlighted as it is surrounded by a dozen prisons or so-called re-education camps. Coca-Cola has another reason to be wary of its relationship with China as a Chinese engineer is due to face trial this year for the alleged theft of company secrets. The engineer reportedly stole confidential information on Coke’s can-coating research and was granted funds by the Chinese government to open a firm to compete using the stolen technology. 

A potentially promising technology, vertical farming, might not deliver on its promises to reduce hunger, restore forests and lower agricultural emissions. Vertical farming operations are finding that powering lamps for 12-16 hours a day, on top of heaters, makes it hard for them to compete with crops grown under natural – and free – sunlight. A US operation said its products cost 3-5 times more than the competition grown on traditional farms, although they require significantly less water.

A new study by Mintel revealed that meat-eaters in the UK made less of an effort to cut down on meat consumption amid the pandemic in 2020. Some 41% of the people surveyed said they were actively looking to eat less meat, compared with 51% in 2019, although 42% of people conceded that a meat-based diet was bad for the environment, up from 25% in 2018. Researchers explained that people were looking for familiar comfort food during the pandemic, as even canned meat sales increased, while the trend should return to favour plant-based alternatives after the pandemic. 

Investors certainly believe in the future of plant-based diets as Blue Horizon Ventures exceeded its target of raising EUR 100 million (USD 121 million). The venture capital fund is planning to invest in startups looking at alternative proteins. Governments are also under pressure to reconsider their meat consumption as an assessment of the meals served to British MPs found that 72% of the carbon footprint came from meat products. Humane Society International is calling on MPs to replace 50% of meat products with plant-based alternatives. 

Finally, Jonathan Kingsman, the founder of Commodity Conversations, has recently published ‘Crop to Cup – Coffee Conversations’. The book looks at all aspects of the coffee supply chain and contains interviews with leading figures in the sector. It is now available on Amazon.

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Commodity Conversations Weekly Press Summary

The pressure is increasing on major trade houses to step up their commitment to end deforestation in Brazil after three small soy traders that supply Norway’s salmon industry committed to zero deforestation in their supply chain this week. Brazil’s oilseeds crushers association Abiove, however, refused to impose a “soy moratorium” on farmers in the Cerrado, arguing that farmers own their land and should have a right to decide what to do with it. Abiove argued that downstream companies that are putting pressure on soybean farmers should instead look to work with them to find a solution. 

The issue continues to hold diplomatic proportions, as France’s President said that importing soybean from Brazil would be akin to condoning the deforestation of the Amazon. But with the EU importing over 8 million mt of Brazilian soy in 2020, up 61% on year and the second biggest market after China, displacing Brazilian soybean won’t be easy. While the latest pledge will help make the EU’s salmon supply chain deforestation-free, an analyst argued that reducing our meat consumption was the only realistic way of fighting deforestation in Brazil. Until then, the EU’s food safety agency just cleared worms, saying they were safe to eat, something that the UN FAO has been saying since 2013. 

Following in the footsteps of Louis Dreyfus, Cargill is looking to sell its 50% stake in sugar trading group Alvean, which would effectively signal Cargill’s exit from the world of sugar trading. This comes as the US Food and Drug Administration is under increasing pressure from consumer groups to have stricter rules for sugar content labelling. The FDA doesn’t allow the “Low Sugar” label to be used in marketing because it has not defined what the threshold is. However, a report by the New York Times shows that F&B companies are using other misleading labels, such as “lightly sweetened.” A number of these companies have faced lawsuits by consumers claiming the labels were deliberately misleading. 

In a move that grabbed headlines, Coca-Cola withdrew its support from the International Life Sciences Institute, an organisation Bloomberg said was known to focus on pro-sugar lobbying and research. Coca-Cola was also among a number of other F&B giants to freeze lobbying money following the attacks on the Capitol. This is part of a wider move from major US companies increasingly wary of their image in the eyes of consumers. The country’s biggest F&B groups already slashed political donations by up to half in the 2020 Presidential campaign compared to the previous one. 

Research carried out in Australia found that the type of food delivery that produced the most packaging waste was burgers, followed by Thai food. It also found that paper bag packaging produced more emissions than plastic as a result of the carbon released. The good news, though, is that Amazon announced it was banning toxic PFAS chemicals which often line cardboard and wrappers as well as limiting non-recyclable packaging for its Amazon Kitchen brands. In the same vein, McDonald’s said it would phase out PFAS in its food packaging by 2025. 

Restaurants continue to resent the high commissions charged by third party delivery companies. As one podcaster put it, while UberEats doubled revenues in 2020, 17% of the US restaurants shut down. Regardless, delivery companies continue to push innovation. Grubhub, for instance, tied up with Fiat Chrysler to make it easier to order food from inside a car. Meanwhile, Walmart is testing a smart locker delivery system that would make it easier for people to order their groceries and get delivered even when they’re out. The delivery app companies also welcomed a new bill passed by the outgoing President making it easier for them to classify their workers as independent contractors instead of employees, saving the companies a lot of costs. There is a strong likelihood that the new President will overturn that rule, however, The Counter said. 

Last but not least, Unilever is testing a new concept: a food factory inside a sea container. The containers would be able to produce things like bouillon, mayo, ketchup and even ice cream while being shipped around the world. 

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Commodity Conversations Weekly Press Summary

The United Kingdom has already suggested that it might take a significant step away from the EU’s strict food policies as it opened a public consultation that will look at allowing gene-edited crops. The EU ruled in 2018 that gene editing should be banned along the same lines as Genetically Modified Organisms (GMO), although the former does not involve the introduction of new genetic material. Moreover, English officials said they would look to replace the EU’s subsidy system with payments linked to environmental performance.

Across the channel, the French consumers’ agency DGCCRF concluded that some authorised GMO products were sold in France but ruled that growers have generally been following the ban on planting GMO seeds. The comment comes after an investigation prompted by the discovery of an illegal GMO colza polt in 2018. The agency commented that some GMO seeds could be imported for processing but not for sowing.

The Irish protocol designed to avoid the return of a hard border in Northern Ireland after Brexit is “unworkable” in its current state, according to a letter signed by major supermarket chains, including Sainsbury, Marks and Spencer and Tesco UK. They warn that the region could face major disruption in food supplies when a grace period ends on March 31 and imports from the UK will be screened as they will effectively be entering the EU internal market. The supermarket chains argued that the government should negotiate a new arrangement with the EU. Dutch customs started enforcing the controls on meat imports and British truck drivers can no longer bring their ham sandwiches. A customs official told a surprised driver whose lunch was confiscated “Welcome to Brexit”. 

Farmers in Argentina have been protesting the government’s effort to control inflation by limiting food exports. Eventually, the government cancelled its plan to ban corn exports and said it will cap daily sales instead, although the announcement was not enough to stop the strike. Russia is also worrying importers as it plans to impose an export tax on wheat, following comments by the President that food prices were too high. In response, an economist at the FAO argued that protectionist measures rarely work to lower food prices. 

The Ivory Coast seems to be facing the opposite problem as it is storing 100,000mt of unsold cocoa beans. Traders explained that major chocolate buyers asked to postpone their Oct-Dec purchases to Jan-Mar in response to a fall in demand caused by the coronavirus. Similarly, sales in branded coffee shops in the US are expected to remain below pandemic levels until 2022. Some 208 stores out of 37,189 had to close last year, while the industry’s turnover in 2020 was down 24%.

The coronavirus has refocused the attention on rising obesity rates which the UN describes as a “global pandemic in its own right.” Investors are now putting pressure on food companies to address the associated health concerns of their products, which can be mitigated by reformulation, smaller packages and clearer labels. More and more governments are imposing a targeted tax, like in the UK. However, a new report is asking the UK government to disclose what it has done with the GBP 336 million (USD 459 million) raised from the tax on sugar-sweetened beverages in 2019/20 and is asking that the government fulfil its promise to spend it on children’s health and food programs.

Cargill’s marketing strategy is being challenged in the US by the Family Farm Action Alliance which argued that the claim that Cargill’s meat comes from “independent family farms” amounts to false advertising. Cargill highlights that it sources its meat through contract arrangements but the complainant argued that the farms should be considered subsidiaries. An expert commented that the situation could take years to reach a conclusion, as the US government has a clear definition of what a “family farm” is but no definition for “independent farms”. The same government agencies are also looking to define what “natural” foods should be. 

Air Protein raised USD 32 million from ADM, Barclays and Google this week. The Californian firm makes proteins suitable for meat-alternative products using carbon dioxide, oxygen and nitrogen. The process requires no arable land and is fully independent of climate, soil and weather conditions. As if that wasn’t weird enough, Australia’s Vow raised USD 6 million to invest in the production of cultured exotic meat, like cultured kangaroo or alpaca meat. 

When a librarian obsessed with food history passed away in 2015, no one took over her 20-year old website which documented the history of food going back as far as 17,000 BC. Researchers can now rejoice, however, as Virginia Tech University took over the project which will be revived and maintained. The website, foodtimeline.org, is currently down but the University said it should be up again in the coming weeks. For those who can’t wait and need to know what food the Roman army ate now, the Wayback Machine has you covered. 

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Commodity Conversations Weekly Press Summary

The world seems to have moved on from the concept of dry January to Veganuary, a pledge to only eat vegan food during the first month of the year. Leaders from major groups such as Nestle, Marks & Spencers and Bloomberg even called on their employees to join in on the pledge. In the UK, an estimated 13 million people reduced their meat intake since the start of the pandemic, according to a survey by The Vegan Society. And not to be left behind, Mondelez is reportedly about to buy the remaining stake in vegan chocolate-bar maker Hu, according to sources who spoke with Reuters. 

A new study found that the meat with the lowest environmental impact was still worse than the plant with the highest impact, The Guardian reports. The research looked at organic meat and found that, as livestock grown organically takes longer to grow and ends up with less meat, it results in more manure and methane burps, a major source of livestock’s greenhouse gas emissions. If the environmental cost was factored into food prices, conventional meat should be 40% more expensive than it currently is, organic meat should be 25% more expensive but the price of plants would remain the same, the study found. 

In Europe, Euractiv reported a disagreement among plant breeders as to whether the EU’s new intellectual property plan could successfully accommodate the realities of the agricultural sector. Those in favour welcomed the plan, saying it will be key to encourage investments in innovations at a time when speed is key. Critics, however, argued that the system would only lead to more expensive seeds, market concentration and monopolies.  

ADM and Bunge are among a group of companies accused of sourcing palm oil from Indonesian mills that violate human and land rights, according to a report by Global Witness. The report said that the tradehouses were failing to address the issue even though these had been reported and that they were not doing enough checks. Both companies denied the allegations but said they were looking into it. 

A survey by Cargill showed that sustainability was a growing concern for customers and that the majority are willing to pay a premium for environmental and social responsible brands. “Consumer expectations are higher now than ever before,” a Cargill official said, especially when it comes to buying chocolate. A majority of those surveyed said they were readier to pay a premium for environmental sustainability than for low-sugar or organic chocolate. 

In the US, the government issued its first ever dietary guidelines for infants and toddlers, which recommends not to feed any added sugars to children younger than 2 years old and less than 10% of daily calorie intake after 2. The government rejected the recommendations made by the Agriculture Department and the Department of Health and Human Services to lower the recommended consumption of added sugar from 10% to 6% of calories consumed daily saying the evidence was insufficient to support stricter restrictions on sugar consumption. The government also rejected a proposal to lower the recommended limit on alcohol intake from two daily drinks for men and one daily drink for women to one daily drink for both women and men. 

In the UK, meanwhile, the government will be rolling out new restrictions on unhealthy food promotions from April 2022, including restricting where the foods can be placed in stores and banning discounted offers and free refills of sugary products. While more and more countries are looking into discouraging the consumption of junk food, a new discovery by archaeologists in Pompeii suggests that fast food may not be a modern invention. According to the Associated Press, archaeologists dug out a food stall dating back to 79 AD, with fragments suggesting that chicken, duck, snails and fava beans had been on the menu that day. 

If you’re not ready to go completely vegan, and switching to eating bugs doesn’t appeal to you either, but you still want to do your bit for the planet, you may want to consider getting your pet to eat bugs instead. Nestle Purina PetCare will be launching its pet food made from crickets in the US sometime this month. Insect-based pet food is already gaining grounds in Europe, with cricket a popular option as it needs 12 times less feed than cattle for the same amount of protein and vets in the UK are recognising that this is good quality protein too. It is likely to remain a premium product for the foreseeable future, however, given the higher costs of production. That’s why Nestle Purina PetCare will also be investing USD 550 million in expanding its pet food plant in Georgia, US. 

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Commodity Conversations Weekly Press Summary

The Chinese government continues to push its “Operation empty plates” to reduce food waste amid growing concerns of possible food shortages. Officials denied any possibility of shortages, however, and the country’s consumer price index saw a 0.5% drop in November, the first annual drop in over a decade. An economist explained that the fall was led by declining pork prices, which dropped by 12.5% in November, following an increase in the domestic hog population. This could be short lived, however, as pork prices have been rising again in December due to seasonal demand for meat in preparation for the Lunar New Year. The crackdown on imports has also contributed to lower meat availability, with the government’s coronavirus testing measures slowing import clearance, while consumers prefer to buy domestic pork. 

Rising food prices are also an issue in Russia, where the government announced measures to cap the price of several essential commodities, including a temporary quota for grain exports and a temporary export tax on wheat. Sugar and sunflower oil producers agreed to cap prices themselves, failing which the government threatened to lower the sugar import duty and tax sunflower oil exports.  

A big winner in all of this is Brazil, which expects to see USD 100 billion in agribusiness exports in 2020, up 3.5% from 2019 and the second highest after 2018. The projection made by Insper Agro Global notes that a third of exports are destined to China, Brazil’s biggest agricultural trade partner since 2013. Soybean exports by themselves should generate USD 36 billion, driven in large part by the recovery in China’s hog population. 

Within this context, it is little surprise that more and more Brazilian agribusinesses are choosing to go public on the domestic stock exchange. A mergers and acquisitions consultant said there was strong investor demand for these companies thanks to the weaker Real and interest rates at historically low levels. However, a banker involved in one of the IPOs said that sustainability and good environmental practices were key. 

In the UK, the Prime Minister said this week that a UK-EU trade deal looked unlikely, which prompted retailers to reiterate their warning that a no-deal Brexit would lead to higher food prices. The British Retail Consortium warned that 80% of the country’s food is currently imported from the EU duty-free and the absence of a trade deal would lead to average tariffs of 20%. Brexit could also lead to sub-standard food imports, the Future British Standards Coalition (FBSC) said, explaining that the government had refused to sign food safeguards into law. Despite agreeing to ban the import of chlorinated chicken and hormone-treated beef, the current system allows the government to make changes on food import rules without a vote in parliament, the FBSC said. 

Soybean from Brazil is facing a backlash in Europe amid the rapid rate of deforestation in the Cerrado which supplies two thirds of the country’s soybeans. Some 160 food groups and investors have asked the major trading houses to stop procuring soybean linked to deforestation in the Cerrado region by the end of the year. Nestle already stopped buying Brazilian soy from Cargill back in May 2019, and two European fish feed companies announced they would stop using Brazilian soybean in their feed, one of which said it would be using European grains instead. The Financial Times explained that part of the issue is because, by law, farmers in the Cerrado only have to protect 20-35% of the native forest, against 80% for farmers in the Amazon. 

Brazil overtook the US as the number one producer of genetically modified (GM) soybean in the world in 2019, according to a report by ISAAA. Overall, however, the area under GM crops dropped globally by 0.7%. The area dropped by 4.7% in the US, the country with the largest area under GMO crops, but increased by 3% in Brazil, the number two in the world. The report suggested that GM crop area seemed to have reached a peak, having remained stagnant for a few years now. 

In the US, the Food and Drug Administration (FDA) gave the green light to the first GM pig safe for people who are allergic to red meat. The Center for Food Safety complained that the FDA didn’t do enough tests and flagged the risks of a pig escape and contamination with wildlife. But the company that engineered the pig, United Therapeutics Corporation, isn’t working on meat for consumption. Rather its goal is to develop pig-based organs that can be transplanted into humans. “[This] is one step on our journey to address the shortage of transplantable organs in the US,” a company official said

Also in the US, some 12,000 peanut farmers filed a class action lawsuit against three shelling companies, including Olam and ADM, accusing them of depressing prices by close to 20% between 2014 and 2019. The three companies, dubbed Big Peanut by The Counter, have an 80% market share of the industry. Two of the Big Peanuts are reportedly about to settle with the farmers. 

Dear readers, we would like to wish you a Merry Christmas and Happy New Year. The Commodity ConversationsxECRUU report will resume on 7 January 2021. 

This summary was produced by ECRUU

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Commodity Conversations Weekly Press Summary

In order to meet its goal of reaching net-zero emissions by 2050, Nestle announced that it will invest USD 3.6 billion over the next five years, focusing on regenerative agriculture, renewable energy and plant-based products. More countries and companies have joined the 2050 net-zero pledge in recent weeks, including Glencore. The group, however, argued that fossil fuels still had a role to play and mentioned that it was not planning to sell its coal mines in Australia. Glencore also announced that the CEO will retire next year and that Glencore Agriculture will be rebranded as Viterra

Carbon offset programs will be essential to meet these goals, as Mondelez explained that any “product that has to be produced and transported will have some carbon footprint”. Mondelez is testing the concept with a product launched in France, the carbon-neutral NoCOé cracker. Beyond using local and organic products, Mondelez is planting trees in partnership with Rainforest Action. The product will also help verify whether consumers are willing to sacrifice price and convenience in order to help the environment. 

Singapore made headlines when it approved the sale of the first cultured meat, produced by the US-based Eat Just. The chicken bites are produced in a bioreactor without the slaughter of an animal. Nonetheless, the company was the first to admit that a lot of progress still needed to be made, as the meat is still expensive and energy-intensive. It also relied on foetal bovine serum extracted from foetal blood, although this could eventually be replaced by a plant-based alternative. For these reasons, an observer argued that the launch was “good news, but not great news.” In the long-term, another observer expressed optimism that cruelty-free cultured meat could replace cuts of traditional meat while plant-based products will replace processed meat like burgers and sausages. 

As investment in the plant-based meat sector continues to soar, Canadian researchers highlight the need to properly evaluate the true environmental impact of switching to plant alternatives. Supply chain logistics behind the production and distribution of proteins also play an essential role, along with the choice of base ingredients. Experts also highlighted that working conditions and food safety should be factors when assessing the sustainability of plant-based meat. Separately, a study by Tufts University suggested that the only way for US cities to focus on locally produced foods was by reducing the consumption of meat. The land needed for grazing livestock would make it difficult to supply enough meat locally for more than 20 percent of meals.

The world of machine learning and food development collided when Google’s parent company announced that the DeepMind AI was able to crack a longstanding problem: protein folding. Protein folding contains a number of variations that approach infinity but DeepMind’s DeepFold AI can predict the structure within days. Beyond the huge implications for the biomedical sector, food researchers also pointed out that this could be a fundamental change in the search for new proteins, along with the possibility of replacing rare ingredients like saffron and vanilla. 

Google announced other food-related ventures as two prototypes developed by the X factory will now be scaled and commercialised. The first is the “dana-bot”, a food distribution network designed to track food waste to help food banks and redirect waste from grocery stores. The second prototype leverages computer vision to analyse the food thrown out in kitchens. Going even further in the realm of science fiction, Finland-based Solar Foods raised USD 30 million to test the production of “air protein”. Called Solein, the protein is made using carbon dioxide captured from the air and mixing it with bacteria. 

When the US prohibited the consumption of alcohol, apple producers started designing sweeter varieties more suited for direct consumption instead of fermentation to make cider, according to Civil Eats. Some cider producers are now scavenging in the wild to rediscover old apple varieties much more suited for cider. South Hill Cider, in the US, is grafting and planting these varieties in its own orchard. Meanwhile, a jogger in Wiltshire, UK, was puzzled when he found a solitary apple on a wooden trackway. With the help of the Royal Horticultural Society, he discovered that the apple was a new variety which means he gets to name it. The choice is tricky and he explained: “My seven-year-old son wants me to call it Cristiano Ronaldo but that’s not happening. My wife, Hannah, is the apple of my eye, so she’s in contention.”

This summary was produced by ECRUU

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