Commodity Conversations Weekly Press Summary

This is ECRUU’s last Commodity Conversations media report. 

Thank you to all of you who have supported and read this report over the last 5 years. We have decided to focus all our energy and attention on exciting developments for our core products (sugar & ethanol media monitoring – check it out here). 

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Bad weather conditions around the world are threatening to tighten grain stocks which are already at their lowest in the past five years. Brazil’s corn crop is at risk because of the dry weather, a cold wave destroyed seedlings in Europe and now the US Midwest is expected to suffer from abnormally cold and dry weather over the next few days. Demand has been increasing at the same time and governments are now looking to control food inflation. For one, Brazil announced that the suspension of corn import duties, among other grains, had been extended until the end of the year.

China issued new feed guidelines in response to the rise in grain prices which could have long-term repercussions on global trade flows. The directive recommends that livestock operators reduce the amount of corn and soybeans used and replace them with cheaper alternatives, such as rice, cassava, barley, rapeseed meal, cottonseed meal or peanut meal. Some doubted whether this would actually change consumption patterns as cost will remain the main factor. One analyst also noted that soybeans and corn maintain a significant supply advantage as “the volume of soybeans the US can load in a single day is larger than the yearly global export volume of cottonseed meal”. 

New data revealed that consumers globally cooked and baked more during the pandemic as global grocery sales were up 10% in 2020. The data highlighted some regional differences, such as alcohol sales which grew 20-25% in Western Europe and Latin America but dropped 10% in Asia. In the UK, consumers are also focusing on their health as the sale of berries remains higher than usual. A researcher noted that shoppers were no longer focusing on calorie count but on holistic health and the importance of nutrients.

Nestle saw its strongest quarterly sales growth in a decade in the first quarter thanks to the rise​_ in at-home coffee consumption. Dairy and pet food sales also reported strong growth, while the firm expanded its ecommerce and health science portfolio. In contrast, Danone witnessed a fall in sales in the first quarter. Essential dairy and plant-based foods sales were up but not enough to offset the poor performance of the bottled water and special nutrition segments. 

The EU’s agriculture commissioner expressed his support for a citizens initiative called “End of cage age”  which seeks to ban the use of cages to improve animal welfare. The petition gained 1.4 million signatures and the commissioner said he would now work on drafting legislation. In response, the livestock industry argued that oversimplifying the concept of cages could actually have negative consequences. The idea that “all enclosures are inherently bad for animals” overshadows the complexity of animal welfare and the specificity of certain animals. Instead, animal well-being has more to do with “housing parameters, enrichments, animals’ ability to move freely, the risk of injuries and diseases”, according to the livestock industry. 

Major food firms are also worried that the EU will vote in favour of new restrictions on the marketing of plant-based meat alternatives. Under the proposal, plant-based products will not be allowed to be marketed as dairy alternatives. Nestle would have to rebrand its Almond Latte which is marketed as a “delicious alternative to dairy” and some worry that soy drink makers will even have to change their packaging to avoid comparison to milk cartons. 

Oatly argued that the proposal would place unfair restrictions on plant-based products and hinder the effort to decarbonise food production. Otherwise, the firm officially filed documents for an IPO in the US. The papers revealed that Oatly’s loss widened to USD 60.4 million in 2020. Meanwhile, the sector is due to get more crowded with the launch of Coca-Cola’s Simply Oat drink. And the world’s largest meat supplier, Brazil’s JBS, announced the acquisition of Vivera BV, Europe’s third-largest plant-based food producer. The Dutch firm was acquired for USD 408 million.

After years of debate on the proper ratio of cow to goat milk in halloumi, the EU granted the cheese a protected designation of origins (PDO) status. Perhaps surprisingly, the decision could potentially have geopolitical implications and help with the reunification of Cyprus. The documents also recognised hellim, the Turkish word for the halloumi produced on the Turkish enclave on the island. The local community is now calling for a new production control mechanism that would involve both the Cypriot and Turkish communities. 

This summary was produced by ECRUU

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Commodity Conversations Weekly Press Summary

ECRUU is turning 5!

We’re making some (exciting!) changes and we’ve been debating whether to continue doing this weekly report. 

What do you think? Let us know in the comments if you want us to continue.

Brazil’s agribusiness logistical map is about to be turned “upside down”. Ports in the Amazon region, the so-called Arco Norte, are expected to handle over half of the country’s soy and corn exports, up from 23% in 2010 and overtaking for the first time ports in the Southeast and South. It costs USD 300/mt to transport grain from Mato Grosso to Santos Port, double what it costs to take the grain to Miritituba in Para where it is taken in barges to the Port of Vila do Conde. 

Export costs could fall further if the plan for Ferrograo, a railroad connecting Mato Grosso to Para, goes ahead. Another railway project, the Nova Ferroeste, would connect Maracaju to the Port of Paranagua and help reduce transport costs by a third. Both projects are opposed by environmentalists but an official argued that one 100-wagon train would replace 357 trucks. The government also invited the private sector to submit projects to create a new route from Sao Paulo to the Port of Santos. The project also attracted objections from environmentalists in the past but an official said the idea would be to create a zero carbon highway. Analysts said logistics bottlenecks were the biggest challenge for Brazilian agricultural exports but investments such as these will give the country a competitive edge. 

On the other hand, local media reported a shortage of grain storage space last week in Brazil’s Mato Grosso. Despite recent investments, the country’s total grain storage deficit increased from 12 million mt in 2010 to 94 million mt in 2019. Ongoing dry conditions combined with stronger domestic demand have pushed up the domestic price of corn. One corn ethanol producer warned that corn was so expensive it didn’t make sense to make ethanol from it at the moment. The situation is expected to get tighter with many analysts downgrading the corn harvest due to the drought. 

Chicago corn futures rallied to an 8-year high last week. The USDA downgraded the US’ end of year corn stocks to a 7-year low due to higher demand from the ethanol sector as well as strong export demand. It also reduced the forecast for planned corn planting next year. Analysts expect prices will continue going up – fertiliser prices have risen by close to 100% in the past year and there continues to be strong demand from the ethanol and export sides. However, they flagged that China bought a lot of corn which it hasn’t shipped yet. 

Nestle is the latest to join the Rimba Collective, a USD 1 billion project that aims to protect and even reforest some 500,000ha involved in the Southeast Asian palm oil supply chain. Launched by Lestari Capital, the project already involves the likes of Wilmar and PepsiCo. Nestle said “we are evolving from a no-deforestation strategy to a ‘forest-positive’ one.” 

Olam reported that 2020 was one of its best years ever. The tradehouse saw a 36% increase in operating earnings to USD 678 million despite the pandemic. On top of that, it announced it was now able to trace all of the cocoa it sources directly, which represents 12% of the world’s cocoa beans. 

ADM expects that its plant-based protein business will overtake its crop trading business in size by 2050. The company said it was already the world’s biggest plant-based protein provider. ADM is planning to invest more in plant-based protein in China where it is seeing an uptick in demand. China is looking to boost food safety and reduce carbon intensive farming, which will contribute to the country’s plant-based protein market growing from USD 10 billion in 2018 to USD 14.5 billion in 2025, ADM noted.

There is talk that Impossible Foods is planning an IPO which could fetch USD 10 billion. The group saw USD 7 billion in retail sales in 2020, up by a third when compared to the previous year. Prospects are good, Reuters noted, given that Beyond Meat’s share price increased fourfold since its IPO two years ago. 

The Good Food Institute estimated that a record USD 3.1 billion was invested in the alternative meat market in 2020. However, US sales of meat still increased by 19% in the past year. But this is not all bad. A new study found that the US beef industry reduced its carbon footprint by 40% between the 1960s and 2018 while making 66% more beef – making it the most sustainable beef production system in the world. 

Finally, not all vegan burgers were born equal. You can find out here which one is the best for the environment. 

This summary was produced by ECRUU

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Commodity Conversations Weekly Press Summary

Sri Lanka banned the import of palm oil, effective immediately. The President instructed local palm oil companies to uproot their crops. His goal is to make the country palm oil-free and address deforestation. Coconut plantation owners were also told to progressively change crops. Farmers were advised to plant “rubber or other environmentally-friendly crops” instead. 

The country used to import most of its palm oil from Malaysia but the amount was too small to have a significant impact. Instead, palm oil prices grew last week amid a strong demand from India, Europe and Africa. The global vegetable oil supply is also expected to be tight as US farmers might plant fewer soybeans than expected. 

Global grain markets could be upended again with the resurgence of African swine fever in China, where 20-25% of the pig population in the north was reportedly lost. Local sources claim that the government is underreporting cases which have risen in the first quarter of 2021 because of the cold weather, a high density of new pig herds and new strains. The disease killed 50% of the country’s hog population in the first year after it was discovered in 2018.

Malaysia’s palm oil estates have been able to deal with the strong growth in demand thanks to huge improvements in yields. New research, however, argued that improvements in yields are being slowed by the changing climate. Farm productivity would be 21% higher when compared to 1961 if it wasn’t for the warming climate, the study claims. Ironically, one of the major culprits of global warming is the agricultural sector and its drive to boost productivity. Researchers suggested that farmers should aim to improve yields without relying on more inputs like land or water. 

The increasing prevalence of droughts, floods, heat and cold waves is also leading to more crop failures, according to another recently published paper. Europe lost 2.2% of its crop production in 1964-1990 because of extreme weather events, while losses in 1991-2015 were almost three times higher at 7.3%. Some crops, like cereals, are much more vulnerable because they are less likely to be irrigated. Nonetheless, average yields in Europe still increased by 150% between 1964-1990 and 1991-2015.

While a growing number of meat and dairy companies announced pledges to reach net-zero emissions, a paper from New York University noted that most firms still have no climate policy. And it argued that the pledges made so far are often inadequate. They do not contain details and focus mostly on carbon dioxide without addressing methane or land-use change. The paper also highlights the lobbying efforts by agricultural producers to fight climate change policies. The money spent to influence policy often exceeds the amounts paid by fossil fuel companies, although they come under less scrutiny. 

Consumers could help accelerate the switch to a sustainable agricultural supply chain as the food industry is catching up with the world of big data to quickly respond to consumer preference. Food producers used to lack information on customer purchases but the rise in delivery and direct-to-consumer sales is making large food firms much more responsive. Kraft Heinz, for example, launched a larger portion size for its mac and cheese only a few months after people started asking for it on social media. 

Evidence suggests that consumers are already buying more products they believe to be environmentally friendly. A survey of 42,768 shoppers found that they would choose a product with an ecolabel – like Rainforest Alliance or Certified Carbon Reduction label –  79% of the time. Income, age or education were not factors in purchases, although women were more likely to choose goods with ecolabels. However, not all ecolabels are strictly regulated or transparent. The industry should work on labels that “capture a product’s full environmental impact from farm to fork”, researchers suggested. 

Despite the huge amount of money invested in plant-based meat alternatives, the consumption of meat in the US is actually still increasing, according to USDA data. The per capita consumption of chicken, pork and beef were all up in 2020 when compared to 2016. 

Restaurants and investors have been experimenting with new kitchen concepts during the pandemic, like ghost kitchens that rent out space for cooks to make internet-only restaurants. A journalist discovered a new phenomenon when investigating a series of listings on delivery apps. Some restaurants are selling their menu items as if they came from different restaurants. The concept is being pushed by Future Foods – a unit of CloudKitchen which was created by the Uber cofounder – and relies on very flashy marketing. Some of the items were sold under restaurant names like Pimp My Pasta, Cheeky’s Cheesesteaks or OMG BBQ LOL. 

This summary was produced by ECRUU

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Commodity Conversations Weekly Press Summary

Cargill officially exited the world of sugar trading this week. It confirmed earlier talk that it was selling its stake in Alvean, the Joint Venture (JV) with Brazilian sugar giant Copersucar which deals with a fifth of the global sugar trade. Cargill said the sale was part of a wider portfolio review that will see it remain in the business of sugar ingredients but focus on its core agriculture businesses. 

Louis Dreyfus continues to have a sugar trading unit but announced it was selling its US-based Imperial Sugar business to US Sugar, just a month after announcing the sale of its Brazilian unit Biosev to Raizen, the JV between Cosan and Shell. Cosan’s CFO said that the acquisition of Biosev will boost the value of Raizen ahead of an upcoming initial public offering (IPO) and would attract so-called green investors given the ethanol angle. Sources estimated the IPO could raise BRL 13 billion (USD 2.25 billion). Raizen and its joint venture with Wilmar, RAW, exported 5.49 million mt of Brazilian sugar in 2020, Brazil’s biggest sugar exporter. Alvean came second with 4.8 million mt, followed by Louis Dreyfus with 3.86 million mt. 

The consortium of NGOs Chain Reaction Research accused Bunge of being the biggest buyer of soybean from deforested land in Brazil’s Cerrado in 2020, equivalent to 131.5 sq km. The second position went to Cargill but for an area 12 times smaller. The report conceded that the deforestation was not illegal as farmers in the Cerrado are allowed to deforest 80% of their land, compared to 20% in the Amazon. However, it argued that consumers were increasingly concerned about deforestation, regardless of whether it is legal. 

Sourcing deforestation-free soy is an increasingly big headache for the global aquaculture industry. The US Soybean Export Council (USSEC) said “There are no viable alternatives to soy that can provide the volume of protein needed in [farmed fish diets] to keep up with increasing demand.” Cargill’s new chief sustainability officer suggested that US soybean could step in as part of the solution. The USSEC estimated that, in terms of land use change, US soybean has a 319 times lower impact on the climate than Brazilian soybean. Cargill added, however, that it was necessary to source from various origins to ensure supply chain resilience. Besides, an official from ProTerra argued that it made more sense to focus on spreading sustainable agriculture practices everywhere instead of switching origins. 

ADM forecast that US demand for soybean oil could surge by 500 million pounds (227,000mt) in 2021 due to the increase in renewable diesel production capacity fuelled by government incentives. Additional demand could reach 15 billion pounds (6.8 million mt) within the next 4 years. According to Bloomberg, many of the biggest agricultural traders, from Cargill to Bunge, are investing in boosting their soy crushing capacity in anticipation. Bunge, however, said it was being careful about investments in case the bubble bursts. 

A new study found that 64% of the world’s agricultural land was at risk of pesticide pollution, while 31% was estimated to be at high risk. Farmers are the first affected, with 44% of farm workers globally experiencing at least one accidental pesticide poisoning every year, according to a recent meta-analysis. One of the researchers involved argued that the relatively low immediate fatality rate from the poisoning concealed chronic diseases and the farm productivity lost due to illnesses. The analysis noted that, over the last 35 years, the use of pesticides had increased by 81% globally. The growth has been uneven, from a 500% increase in South America to only 3% in Europe. 

European Union agricultural stakeholders, however, are worried that EU restrictions, such as those on gene editing, will delay innovation. Several MEPs argued that implementing new restrictions on farmers, including environmental restrictions, in the absence of viable alternatives would threaten the bloc’s competitiveness and farmers’ economic survival. On the other hand, the European Commission said it is planning to incentivise organic aquaculture which can “help meet consumer demand for diversified high quality food produced in a way that respects the environment and ensures animal welfare.”

This summary was produced by ECRUU

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Commodity Conversations Weekly Press Summary

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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Commodity Conversations Weekly Press Summary

During an industry event focused on the hidden costs of our food system, the head of the Global Alliance for the Future of Food said the current metrics used to measure productivity in agriculture, such as yield per hectare, were problematic. He argued that they hid the environmental and health costs, such as soil erosion and water contamination. Instead, the Alliance is working on “true costs accounting” (TCA) which includes all hidden costs. A professor said disclosing the TCA would help consumers and the whole supply chain make better-informed decisions and bring to light the true costs of their choices. 

The panellists agreed that it was important to focus on “regenerative and restorative practices on soil” as well as on agroecology. Bill Gates and the head of Impossible Foods, however, argue for a different approach. They suggested that genetically modified seeds and chemical herbicides used right would be much more effective at cutting carbon emissions when compared to organic farming which, they argue, is too land-intensive. 

An analysis by The Guardian Seascape found that over one-third of seafood products could be mislabelled globally. The study, based on DNA technology, found the highest amount of wrong labels in the UK, Canada and the US. Expensive seafood products were often mislabeled and contained a cheaper alternative, such as labelling shark catfish as cod or haddock. In some cases, wrong labels concealed endangered or illegally caught species. The worst cases were prawn balls sold in Singapore and China that contained pig elements as well as the pufferfish family – which is known to be potentially deadly. The situation is particularly bad in restaurants with numbers showing that one-third of European restaurants sold mislabelled seafood. 

The huge transhipment involved in the supply chain makes it prone to mistakes but the data suggests that most of it is clear fraud. It is so profitable, in fact, that the supply chain is rife with organised crime. The head of a DNA lab analysis said that you could make CAD 1 million (USD 800,000) in profit by labelling a container of pangasius catfish as red snapper. Risks are low, with very few checks and a fine that wouldn’t cross CAD 50,000 (USD 40,000). 

The most profitable, apparently, is eel which can be worth more than gold. Eels are in high demand in Asia but don’t breed in captivity, making them impossible to farm. There is very little Japanese eel left, pushing buyers further and further away looking for American or European eels instead. Despite export bans, this has led to overfishing and endangering the eel population in several places around the world. One woman involved in the business said eels were “the ultimate black box of global seafood,” in other words, impossible to trace without a DNA test. That’s why conservationists and sustainability groups are pushing for increased use of DNA tests. 

In Canada, Organic Ocean is using a sort of DNA barcode system to identify living species, with which they created an independent authentication programme that goes as far as revealing the product’s river of origin. It works better than blockchain, which fails if the fish has been wrongly labelled from the start. Overall, however, industry stakeholders lament that there seems to be limited interest both from consumers and governments to push for a more transparent seafood supply chain. A researcher in South Africa noted that “many people know, and care more, about the provenance of the wine they drink than the seafood they eat.”

Palm oil giant Sime Darby put together an Expert Stakeholder Human Rights Assessment Commission on March 1 in a bid to address allegations of forced labour that led the US to ban palm imports from the company back in December. However, one of the commission’s NGO members already resigned and another is threatening to follow suit in response to Sime Darby’s decision to sue anti-trafficking group Liberty Shared. The court case goes against the intention of the commission, one of the commission’s members said. 

A study in Indonesia’s West Kalimantan found that two-third of the land conflicts involving palm oil companies and locals remained unresolved even after over a decade. The study found that governments support companies over locals, sometimes disregarding court rulings. Besides, most disputes are not submitted to certification bodies like the Roundtable on Sustainable Palm Oil (RSPO) because the procedure is said to be too complicated and locals have limited trust in them. 

This comes as Greenpeace published a new report in which it argues that sustainable certification processes overall fail to stop the destruction of forests and the ecosystem. Instead, Greenpeace urges governments to get companies to prove that their supply chain is free from deforestation. While the Palm Oil Monitor complained that the report unfairly focused on palm oil, several sustainable certifications actually agreed with Greenpeace, such as RSPO and the Round Table on Responsible Soy Association (RTRS), both of which stated that certification was only one part of the solution.

This summary was produced by ECRUU

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Commodity Conversations Weekly Press Summary

The US is on track to export record amounts of corn and soybeans in 2020/21, although it has come a long way since it was considered as the “world’s breadbasket” in the mid-20th century. The US was able to dominate global grain exports thanks to a technological advantage but competition from other countries surged along with high commodity prices, a strong US Dollar and failed US crops in 2010 and 2012. For example, the US’ share of global corn exports has dropped to about 25%, compared to almost 50% three decades ago.

A lot of the competition came from South America, Canada, Australia and Russia. However, a new contender could further upend global trade flows: China. The country’s latest five-year plan unveiled a project to set up industrial farms in large agricultural belts to boost output and reduce food insecurity. The ambition comes as China was forced to import record amounts of food in 2020 because of the damage caused by the African Swine Fever, along with geopolitical considerations created by the coronavirus pandemic. 

The US lost its position as the world’s largest exporter of soybean to Brazil three years ago and Brazil is now the largest exporter of beef and chicken as well. A recent government study found that the country fed 10% of the world’s population. Nevertheless, mounting concerns over deforestation are shining a negative light on food sourced in Brazil. A coalition of French NGOs filed a lawsuit against the Casino supermarket for selling meat tied to deforestation in the Amazon. Casino owns the largest retail stores in Colombia and Brazil and has been criticised for its supply deals with JBS.

Major commodity traders announced that a blockchain platform called Covantis was now operational. The platform simplifies, through digitalisation, the transactions of agricultural products, starting with bulk shipment from Brazil. The goal is to add more countries and execution processes later on. Covantis was spearheaded by ADM, Bunge, Cargill, Cofco, Louis Dreyfus and Viterra.

The UN launched its most comprehensive report of food waste this week, called the Food Waste Index Report 2021. The report showed that consumers and restaurants wasted 17% of their food supply, while the total food waste reaches 33% when including producers and suppliers. Researchers calculated that wasted food was responsible for 8-10% of global carbon emissions. Somewhat surprisingly, the amount of wasted food does not seem to vary across different countries. 

The World Economic Forum highlighted that some good progress to reduce waste has already been made by retailers thanks to technology and a focus on resource efficiency. The Internet of Things (IoT) can be a great way to check on products and has already helped reduce waste through better temperature monitoring. Another, perhaps less cutting edge solution, is being trialed in Singapore: using wasted food to feed black fly larvae. The amount of food wasted in Singapore grew 20% over the past decade and some food is difficult to recycle. The black fly, however, can actually eat all types of foods and can then be used as feed or fertiliser. 

The EU announced that it will look to impose a mandatory origin label to more food products as part of its Farm to Fork (F2F) platform. Environmentalists and lawmakers welcomed the decision and suggested that it would allow consumers to focus on purchasing more sustainable products. On the other hand, some experts warned against associating origin labels with sustainability as a shorter supply chain does not necessarily equate to a more sustainable product. Moreover, the concept mixes up many different goals, like supporting local farmers and ensuring quality. 

Some EU consumers have expressed concern that Canada’s buttergate scandal would spread through Europe via butter imports. Consumers in Canada started complaining that their butter was now harder to spread and some suggested this was because of the use of palm oil as a feed. In response, Canadian producers said no changes had been made in their feed, as it added that using palm oil was a common and benign practice used all over the world. Nonetheless, the EU’s milk traders association Eucolait reassured consumers that the bloc does not import butter from Canada

Another food scandal made headlines this week concerning the theft of sunken beers. Artisanal beer brewers in Argentina attached 700L of beer to a sunken ship 20 metres underwater to experiment with beer making under pressure. Unfortunately, just one day before the barrels were due to be retrieved, unknown divers stole the whole load. The brewer was disappointed, especially as he explained that the liquid needed to be mixed first, and what was stolen was “a lukewarm, gasless liquor that would be very difficult to drink.”

This summary was produced by ECRUU

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Commodity Conversations Weekly Press Summary

Japan passed a new law aimed at halving the cost of food waste by 2030, compared with 2000. The country spends an estimated USD 19 million every year disposing of food waste, the third-highest per capita cost in Asia. Supermarkets are deploying robots and artificial intelligence to scan products on arrival and in-store to help them spot anything that has been damaged or that is going bad. The supermarket chain Lawson said that disposing of food waste was the group’s biggest cost after labour and that it would reduce stocks by a third to meet the targets.

Japanese consumers are known to be demanding, and many food manufacturers in the country discard products that are just one third through to the expiry period. The e-commerce company Kuradashi said, however, that things were changing with the pandemic; consumers are becoming more price-sensitive. Membership to its discounted unsold foods platform more than doubled since 2019 while sales were up 2.5 times. Kuradashi is also leveraging its platform for food banks and helps reduce the amount of food waste that needs to be incinerated, lowering CO2 emissions in the process. 

The explosion in online grocery shopping in China is pushing e-commerce companies like Alibaba to get actively involved in agriculture. Over USD 150 billion worth of agricultural products were sold on Alibaba platforms in the last eight years but an analysis by Bloomberg explains the government has been cracking down on monopolies in e-commerce platforms. Instead, it is calling on tech giants to invest in smart agriculture for which they can avail large government subsidies. Investments so far include smart poultry bracelets, irrigation sensors and artificial intelligence to help with planting. Thus, instead of being under the government’s radar, Alibaba received praise for contributing to reducing rural poverty. 

Greenpeace released its latest grocery chains’ plastic use ranking but complained that most groups did not disclose any information on their plastic usage. Greenpeace did commend Costco for making some improvements, including its target of reducing Styrofoam use. 

Coca-Cola, which often features at the top of worst plastic polluters’ lists, announced it would launch its first paper bottle on a trial basis in Hungary. The bottle, developed with Paboco, still has some recyclable plastic but the aim is to eventually be completely plastic-free. The trick, one of the company officials said, is to mould the bottle in a single piece and avoid joints. Otherwise, it breaks under pressure, especially with fizzy drinks. It took Paboco seven years to develop this bottle. 

In the US, Coca-Cola will be launching bottles entirely made from recycled PET (rPET), except for the label and cap. This should help the group reduce its consumption of new plastic by 20% in North America compared to 2018. In order to ensure a sufficient supply of rPET, Coke is adding messaging on bottles to encourage consumers to recycle the bottle. It is also switching the colouring of some bottles, such as Sprite, to transparent bottles as most coloured PET can’t be recycled. Bioplastics News argued that it didn’t make sense to try and develop a paper bottle when PET bottled can be completely recycled. This is especially so if the paper bottles require to cut down more trees, it added. 

Still in the US, the consumer group Center for Science in the Public Interest (CSPI) has asked the Federal Trade Commission to look into the so-called “trade promotions” system in supermarkets. CSPI said that food giants like Coca-Cola and Mars spend USD 50 billion annually to secure prime spots in aisles, a practice which, it argues, is anti-competitive and encourages the consumption of unhealthy foods. 

Third-party delivery service DoorDash, which went public last December, reported a 225% increase in Q4 2020 sales to USD 970 million. However, the group’s net loss is widening, at USD 312 million, from USD 134 million a year prior. The situation is expected to get worse with lockdown measures easing. It hopes to get around this with an expansion in grocery deliveries. Domino’s, which reported an 11% growth in sales in Q4, said it had never made money from delivering pizza – only on the pizza itself. As such, the CEO doubts the business soundness of third-party delivery apps. Instead, Domino’s is going in the other direction by reducing its delivery area and increasing the number of stores.  

According to a report by the LA Times, there has been a surge in scams involving third party delivery apps and restaurants. The scams include fraudulent credit cards as well as refund requests on the basis that the food was never delivered. One restaurateur said a customer bought USD 730 worth of food in one go via a third-party app. The customer picked up the food and then disputed the charges. Delivery services mostly take the side of customers, leaving the restaurants to foot the bill, the report said. And if that wasn’t bad enough for restaurants that have been reeling under the pandemic, there has also been a surge in the theft of outdoor heating lamps. With more restaurants forced to offer outdoor seating areas, heating lamps are worth a lot on the secondary market. 

This summary was produced by ECRUU

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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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