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. 

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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.”

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Commodity Conversations Weekly Press Summary

The Ivory Coast and Ghana – responsible for two-thirds of the global cocoa supply – implemented a USD 400/mt premium called the living income differential (LID) last year in order to avoid environmental and human rights abuse. However, they have been struggling with low sales since amid a drop in demand caused by the coronavirus. Moreover, the countries accused Hershey of bypassing the premium by buying unusually large amounts on the ICE exchange. In response, all of Hershey’s cocoa sustainability schemes in the countries were cancelled. The latest Cocoa Barometer report suggested that voluntary efforts so far have mostly failed at addressing issues in the cocoa industry. They call on governments to make food buyers liable for abuse in their supply chain. 

Voters in Switzerland were presented with a law that would accomplish just that last week. In what became the country’s most expensive voting campaign ever, the initiative proposed to make Swiss firms like Nestle and Glencore liable for abuse committed by suppliers overseas. The proposal won the popular vote, getting a 50.7% approval, but failed on regional grounds as a majority was not reached in most cantons – an unusual occurrence in Switzerland. Activists warned that Switzerland could fall behind the global trend, as France, Britain and Canada already have such laws in place while the EU is working on its own plan. 

In the US, lawyers are still debating whether a 1789 statute used to charge Nestle and Cargill over a forced labour case can be applied to corporations instead of only individuals. The Supreme Court heard arguments this week concerning the 15-year old case brought by former forced labourers in the Ivory Coast. The plaintiffs argued that the companies were complicit because they failed to properly monitor their supply chain and refused to pay a high enough price for cocoa. The court seemed to suggest that Cargill and Nestle could indeed be liable for breaking international law, although the evidence in this particular case was not enough to directly link the corporations with the practice of forced labour. Bloomberg predicted that Cargill and Nestle might get a “narrow victory” in the case.

In India, the government’s attempt to reform the farm sector was met by a wave of protest since three laws were passed in September. The government is looking to remove regulated wholesale markets and the need for middlemen by allowing private corporations to purchase food directly. Farmers, however, fear this will mark the end of the purchase of food crops at guaranteed prices. In addition, middlemen provide an essential service to farmers, often acting as the main source of financing. Officials are due to meet with farmers again this week but protesters threatened to maintain their blockade until the government guarantees to maintain the minimum price scheme. 

Food waste surged in Australia because of the coronavirus, according to the Rabobank 2020 Food Waste Report. Households were less concerned about food waste during lockdowns, while people stockpiled and ordered food through delivery services which led to nearly 13% of all groceries being wasted. 

Oysters producers on the East Coast of the US are left with massive supplies of unsold oysters because restaurants had to close with the pandemic. Household purchases of oysters are much smaller and many producers lack the licenses to sell directly to consumers. Nonetheless, the Nature Conservancy and the Pew Charitable Trusts stepped in and promised to spend USD 2 million to purchase unsold oysters. The organisations then plan to use the oysters to repopulate depleted reefs that have been suffering from overharvesting. 

The WWF has been busy trying to reduce the amount of waste in Singapore’s fish farm sector, where around 30% of the fish is wasted between producer and consumer. This involves improving processing methods and access to cold storage. Other groups noticed that 60% of the fish is often wasted when it is filleted. Activists created the Soup Spoon which uses fish offcuts to make soups, broth or chowder.

Foodstuffs, the owner of several supermarket chains in New Zealand, would call the process “upcycling food”. The group noted that just 17% of the food wasted in its stores was currently redistributed. By partnering with other food firms, Foodstuffs is now working to make its waste into more attractive offerings, such as beer made from old bread. Amazingly, the leftover yeast from the beer can then be used again to make more bread. In San Francisco, a pizzeria hopes to go even further and offer what it calls “trash pies”, pizzas made entirely from food waste. 

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Commodity Conversations Weekly Press Summary

Cargill lost its number one spot on Forbes’ largest private companies list, the first time in 12 years. The group’s revenues rose about 1% last year, falling behind Koch Industries. Cargill’s CEO said that 2020 was a difficult year but that the company was well-equipped to handle the crisis, as shown by the steady revenues. Danone, on the other hand, announced it would have to cut its staff by 2% globally, which should help meet a target to save EUR 1 billion (USD 1.2 billion) by 2023 in response to the coronavirus pandemic. The company will also slash its product range by close to a third. The CEO of Olam forecast that it would take until the end of 2022 for the world economic growth to return to the levels seen before the pandemic. “We’ve come down an escalator, but we’re going to go back up the stairs,” he said. 

In the US, a new report argued that the food supply system had proven to be particularly vulnerable to coronavirus disruptions because of the high level of consolidation. Looking at the meat processing industry, it pointed out that the major groups were not only unable to supply enough food but also caused high levels of waste with thousands of animals that had to be put down. 

The pandemic is also exacerbating land inequality, according to a report by the International Land Coalition and Oxfam. It found that 1% of farming companies manage 70% of the world’s farmland and that the world’s poorest rural population only controls 3% of the world’s farmland. Similarly, the pandemic is having a disproportionate effect on minority-owned businesses. In the US, the National Bureau of Economic Research found that close to half of Black-owned businesses closed down as of May due to the coronavirus. In an attempt to counteract this trend, the Coca-Cola Company announced that it would be doubling its spending on Black-owned businesses to reach USD 500 million within the next five years. 

Looking forward, Cargill announced it was investing in and getting involved with Seventure Partners’ Health for Life Capital II fund. The fund, whose other investors include the likes of Danone, targets investments in microbiome innovations. Cargill says this will help it develop ingredient solutions with health and nutrition benefits. In the same vein, Singapore’s Temasek is setting up a new platform to fast-track investments in agriculture and food, with a focus on helping startups scale up production. 

An estimated USD 8.37 billion have been invested in the food technology space in 2020 so far, up from USD 7 billion in the whole of 2019, according to Finistere Ventures. Alternative proteins and ingredient refinement are some of the areas seeing an increase in investments, in part because the pandemic caused a surge in demand for premium products and plant-based meat. 

Beyond Meat launched plant-based pork in China this week, a mince meat designed to be used in Asian dishes. The company is also building two production plants in the country. A Bloomberg analyst warned that the plant-based pork market was already quite crowded in China, however. Besides, he argued that the country’s vegetarianism didn’t seem to be rising and that vegetarians were more likely to stick to their current options, such as tofu, rather than the more expensive plant-based meat imitations.

KFC is applying innovation elsewhere and has started delivering meals in China using self-driving vehicles. The company hasn’t made any statements but analysts guess this is the result of a partnership between KFC’s parent company Yum Brands and Neolix. In the US, ADM and InnovaFeed have tied up to build what will be the world’s biggest insect protein processing plant. The factory will be supplied with feedstock and waste by the adjacent ADM corn facilities. They expect the market for insect protein in animal feed will be close to 1 million mt by 2027. 

The US FDA announced that food manufacturers will now have to disclose the presence of sesame on labels with a cautionary warning. The House of Representatives passed a bill that would add the seed to the list of major food allergens. The 1.5 million Americans allergic to sesame will welcome the news, according to The Counter which reports that sesame derivatives can be found in all sorts of unexpected places, including a peach-flavored yogurt. There’s another good news for those who are big on spicy food. New research found that people who eat chilis are likely to live longer, even though they’re not sure why.

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Eight years after negotiations first started, 15 Asian nations signed the world’s biggest trade agreement with the Regional Comprehensive Economic Partnership (RCEP). The treaty is considered by some as somewhat symbolic and excludes most agricultural products, although it does highlight a tilt in Chinese trade towards more regional partners. At the same time, however, China’s western trade partners have expressed frustrations at the claim that China detected coronavirus samples on the packaging of food imports. In response, New Zealand doubted claims that its frozen beef had signs of the virus. And the WHO and FAO repeated their findings that the virus does not appear to spread through food trade. 

The EU is hoping that a new US President would ease the trade tensions built up by the previous administration. Negotiations over the Transatlantic Trade and Investment Partnership (TTIP) have stalled but EU lawmakers said they hoped to resume talks soon. As a sign of goodwill, perhaps, a committee backed a proposal to remove EU duties on US lobsters. US lobster producers have been struggling to compete because of duties from China and the EU’s free trade deal with Canada. 

The situation concerning a potential trade deal between the EU and the UK does not look as promising, however. Tate & Lyle and Associated British Foods suggested that Northern Ireland could face supply issues in January 2021 because of the uncertainty surrounding Brexit negotiations. The current proposal does not outline how British goods will have access to Northern Ireland, as the region is due to remain in the EU’s single customs market. 

Fish and the protection of British fisheries remain one of the main issues blocking an agreement. An expert noted that the issue was relatively unimportant when measured in terms of economic impact as it only represents 0.08% of the UK’s GDP. The UK Prime Minister is not willing to make any concessions, however, because it is highly symbolic as it represents the UK’s ability to regain its territorial sovereignty. France, meanwhile, has a large fishing fleet and the French President promised to block a deal unless its fishermen are granted access to British waters. 

Speaking of fish, new research identified issues concerning the practice of focusing only on abundant species. Focusing on abundant species can sometimes have a significant impact on other species in what researchers called “indirect extinction cascades”. The fishing world is also unimpressed by China’s campaign to crack down on illegal fishing in the Yangtze River. China’s massive fishing fleet is currently doing a lot more damage to distant fish stocks as far West Africa and the Galapagos. Vessels have to keep going further as the once-abundant Yangtze River, Yellow Sea, Bohai Sea and East China Sea are all effectively considered depleted.

Aquaculture and fish farms have long been promoted as a more sustainable method to produce seafood but a series of dramatic farming disasters has made the practice unpopular with many activists. They point to issues like fish escapes, disease, antibiotic use, and waste as a way to argue that fish farms should be kept out of our oceans. Nevertheless, innovation has made the industry a lot more sustainable over the past few years. The FAO argued that wild fish populations cannot meet the growing demand for seafood and that sustainable aquaculture will have to step in. As of 2018, 46% of the fish eaten globally came from a farm. 

Some aquaculture innovations, like developing a more efficient feed based on microalgae, have been cheerfully accepted, while others remain controversial. In the US, for example, the FDA approved the first genetically modified salmon breeds in 2015 but the product is still not on the market because of legal challenges. The GMO salmon grows twice as fast and has been eaten by Canadians for years. A US court, however, ruled last week that the FDA failed to properly consider the long-term risk of GMO salmon before giving its approval. 

The rush to invest in the plant-based meat sector, meanwhile, continues. Unilever announced a plan to increase sales of meat alternatives five-fold to USD 1.2 billion in 5-7 years, while McDonald’s announced the launch of its own plant-based burger, uninspiringly called the McPlant. At the same time, however, the sale of traditional butter has been steadily rising over the past few years although consumption is not expected to recover to the levels seen before it had to compete with margarine. Nonetheless, butter’s comeback reflects the realisation that plant-based margarine is not necessarily healthier, while an increase in disposable income makes butter a viable option despite its higher price. 

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Commodity Conversations Weekly Press Summary

For the first time in its 169-year history, Louis Dreyfus will receive funds from an outside investor as the chairwoman agreed to sell a 45% stake to ADQ, an Abu Dhabi sovereign wealth fund. The deal included a long-term contract to supply commodities to the UAE which could make Dreyfus “the champion of food and agri-supply in the Middle East”, a consultant noted. Louis Dreyfus has been looking for partners for a while to repay some of its debts and had engaged in negotiations with Glencore and Bunge.

This would not be the first time a government fund invests in a major agricultural trade house, as Singapore’s Temasek Holdings is the majority owner of Olam International while the country’s sovereign wealth fund is the largest shareholder in Bunge. Moreover, the coronavirus pandemic accelerated efforts by countries dependent on food imports looking to be more self-sufficient. Abu Dhabi’s investment in Louis Dreyfus will be accompanied by a series of partnerships to study the production of food in desert climates. NanoRacks announced that it will create a space research center in the desert country to develop agricultural practices in extreme weather conditions. 

Unilever suggested that it was in no hurry to resume advertising on Facebook and Twitter, as the firm left the social media platforms back in July. A director explained that alternatives like Snapchat, Pinterest and YouTube were showing promising results. Unilever is also launching its first pet care products, starting with a launch in Brazil – the second-largest pet market after the US. For its part, Nestle is betting on the rising demand for environmentally-friendly pet food and is launching a line of Purina made with insect proteins

Data published this week confirmed that Brazil’s carbon emissions were up 9.6% on year in 2019, mostly due to the accelerating deforestation. The country was able to reduce emissions in 2004-12 and keep them stable in 2018. Brazil has a great potential to reduce its emissions, although the current government is not expected to push for the right policies. In addition, the new US President is not expected to prioritise trade negotiations with Brazil. The Democratic President-elect is expected to follow the EU’s example and include provisions to protect the environment in any new trade deal which could put Brazil at a disadvantage. The US could also join the list of importers looking to impose tariffs on countries or products linked to deforestation, a Brazilian lawmaker said.

A new study published in the Science Journal estimated that agricultural emissions alone are on track to stop us from meeting the climate goals under the Paris Agreement. The main reason is the increase in consumption, both on the individual and global levels, along with a shift towards more animal-based products. At the same time, a study conducted in Ireland showed that current policies were not effectively addressing rising rates of obesity and other non-communicable diseases. 

Experts argue that a lower food consumption overall, along with a lower consumption of meat, would address both climate and health problems. This is increasing the appeal of a meat tax. The UK Health Alliance on Climate Change (UKHACC) argued that if food producers were unable to voluntarily act to reduce the consumption of meat by 2025, the government should step in with a tax. A professor said such a tax would highlight the link between planetary and human health. 

Another popular idea is to implement labels outlining the carbon impact of food products. Restaurant chains in the US are experimenting with the solution, while food producers are also looking at the idea. Some suggested this could create a whole new type of diet, possibly called “climatarians”. The concept is not so straightforward though, as Tesco found out when it shelved its plan back in 2012. Measuring the carbon impact of food has become simpler since, but nuances remain that will be hard to convey on a label. For one, the seasonality of ingredients used is key to measure the carbon impact. 

With Thanksgiving approaching in the US, restaurants are preparing to honour to new President by focusing on what he has called “the best sandwich in America”: Capriotti’s Bobbie sandwich with turkey, stuffing, and cranberry sauce. It almost sounds as delicious as the famous “moist-maker”: Monica Gellar’s Thanksgiving left-over sandwich. 

This summary was produced by ECRUU

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Commodity Conversations Weekly Press Summary

Meat packers in the US are investing millions to accelerate the automation of plants. The CEO of JBS, the world’s biggest meat processor, explained that labour shortages have been an ongoing issue for the industry even before the pandemic, but current health and safety issues have been an accelerator. A food scientist told Deep Dive that some of the challenges, however, include the need for robots to be able to distinguish colours. Besides, animals have significant “biological variations,” meaning that two chicken can have different wing sizes, something which is very difficult for robots to handle. To make sure they don’t miss out on any new technology, Cargill’s Protein and Animal Health said they are working closely with innovators in Silicon Valley. 

Taking it a step further, Tyson obtained a waiver from the USDA allowing it to use its own staff and a system of cameras and computers to partially replace federal inspectors at its beef plant in Kansas. The USDA already eased inspections in the poultry and pork sectors over the past few years, with an analyst telling Reuters that this would allow inspectors to focus on more complicated issues like animal welfare and food safety. Some activists warn, however, that data from the Centers for Disease Control and Prevention show foodborne diseases are on the rise.

Tyson also rolled out infrared body temperature scanners at all of its plants to slow the coronavirus spread. On the other hand, two whistleblowers have accused JBS of making employees without health insurance pay USD 100 for a COVID-19 test. A legal expert argued that the company should have covered the costs.  

A failed trial by Walmart suggests that not all automation is useful. The company announced it would stop using the autonomous shelf-scanning robots it had been trying out for the past 3 years to monitor inventory.  Walmart said that the robots were awkward for shoppers and that they were not adapted to the massive shift to online shopping. While this may be good news in terms of jobs, the CEO of Unilever warned that the worst of the economic impact of the pandemic is yet to be felt. He urged companies to invest in upgrading the skills of their workers to anticipate massive job losses. 

Nestle bought the remaining stake in meal delivery company Freshly last week for USD 950 million and a potential USD 550 million earnout. Freshly is currently delivering over 1 million meals every week, which should increase threefold following the acquisition. An analyst said that Freshly will allow Nestle to deliver more of its products directly to consumers, a growing trend across the industry. 

ADM, meanwhile, identified five major food trends as the world adjusts to the pandemic. It found that consumers are increasingly looking for nutrition which is good for both “the body and mind,” notably with a focus on nutrients that are good for digestion. Sustainability and transparency are also a growing concern, ADM noted. 

Major beverage companies are in a race to design a paper bottle that can replace the existing plastic bottles. Coca-Cola announced its first paper bottle prototype, although it still contains a liner and closure made from recycled plastic. It is now working on a prototype that doesn’t have the plastic liner. The company, as well as competitors like Pepsi, hope to roll out paper bottles next year. The timing is right: scientists in Australia estimate that there is 14.4 million mt of microplastics at the bottom of the seas, twice as much plastic as there is on the oceans’ surface. One researcher explained that “The deep ocean is a sink for microplastics,” all of which risked showing up further down in our food chain. 

The Michelin Guide, too, recognised the importance of a sustainable food supply chain when it launched the Michelin Green Star back in June. Some seven chefs have already been awarded for their “sustainable gastronomy.” In France, however, chefs are warning that the new lockdown measures could drastically transform the country’s culinary landscape as standalone establishments struggle to cope and threaten to close. France’s gastronomic heritage needs to be protected by UNESCO, one of the chefs argued.

This summary was produced by ECRUU

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