Commodity Conversations Weekly Press Summary

Cargill has launched the initial phase of its new grain terminal in Ukraine’s Yuzhny port, in partnership with local company MV Cargo. The terminal, which is one of the biggest investments the country has seen in a while, should be handling 1 million mt of grains by this autumn. Techagro also announced a plan to build three grain terminals at the same port that would handle 4.5 million mt by 2021.

In Argentina, Cargill hiked its stake in Glucovil Argentina to 70% by buying 40% of Ledesma’s holdings. The family now holds a 30% stake which Cargill can buy until 2023.

Bunge announced it opened a new wheat mill in Mexico. Located near the port, from where the wheat is imported, the mill will process and re-export the wheat to the rest of Latin America. In Brazil, meanwhile, Bunge announced it had completed the sale of its 49.9% share in the algae business SB Renewable Oils to joint venture partner Corbion.

Wilmar is planning to release the Indonesian version of an online system designed to help its palm oil suppliers become more sustainable. It already launched one in Malaysia ahead of the Malaysian Sustainable Palm Oil national certification becoming compulsory next year. The questionnaire, which results in a score, will give Wilmar an idea of which areas need to be addressed and develop further training or workshops accordingly. The company has also designed a similar system for Latin America.

Danone’s dairy arm, Centrale Danone, is facing losses in Morocco after a boycott from consumers caused its sales to fall by over 50%. To cope, the company has reduced by 30% the amount of milk it buys from farmers and has had to lay people off. The boycott, which also affected fuel stations, was started to protest high prices from foreign brands.

Coca-Cola aims to recycle all of its packaging by 2030. In Zimbabwe, the company is now collecting over 15% of the PET produced, up from just over 7% in 2017. Similarly, in Uganda it invested in Plastics Recycling Initiative which recycles 14mt of plastic every day while providing an income for plastic collectors.

A report from the UN showed that some 50 countries are actively working to fight plastic pollution. Additional taxes and outright bans have been, in some cases, effective, such as in Eritrea, Morocco, China and Ireland but have failed in other areas mainly because of the lack of enforcement. The head of the UN environment argued that plastic in itself was not bad, the problem was what we did with it. As such, the report suggested businesses and plastic producers needed to incentivise recycling more.

In a bid to capture more of the value chain and to control prices, Ivory Coast and Ghana are planning to work together on cocoa production and marketing. Both countries, which represent two-thirds of the global cocoa production but where very little processing happens, want to build warehouses, coordinate production and encourage local consumption. Many analysts are sceptical this will work, however, arguing that previous attempts to coordinate efforts have failed.

Ghana did send a delegation to China to try to convince consumers of the benefits of cocoa and look for a market for its premium cocoa beans, semi-finished and finished cocoa products.

Meanwhile, chocolate maker Barry Callebaut has partnered with growers in Ghana and Ivory Coast to replant trees infected with the swollen-shoot virus disease as part of a wider sustainable farming initiative.

Qatar has become a self-sufficient milk producer just a year after its neighbouring countries cut off diplomatic and trade ties and soon expects to start exporting. Before the blockade, the country imported all its milk from Saudi Arabia and had no dairy herd. The cows were flown in from the US and could reach 20,000 head-count by 2019.

Neighbouring Dubai, meanwhile, could soon be growing paddy in its desert on a commercial scale. A group of Chinese scientists have successfully grown rice in diluted sea-water in a test project which yielded 7,500kg/ha, over twice the world average. Ultimately, the aim would be to cover 10% of the UAE, although some question whether the region has enough fresh water to dilute into the seawater.

Oxford University and Agroscope researchers published a huge database of the environmental impact of 40 food products across the world, using data from 40,000 farms and 1,600 processors. Have a look at the impact of 9 animal and 6 vegetable products here.

This summary was produced by ECRUU

Commodity Conversations Weekly Press Summary

The White House announced on May 29 that it will publish a list of Chinese goods that will fall under new USD 50 billion tariffs on June 15, frustrating US farmers and Chinese trade negotiators who are struggling to keep up with the uncertainty and frequent reversals. Last week, the trade secretary claimed that the two countries had agreed to avoid imposing new tariffs. On the other hand, experts suggest that markets are now ignoring such announcements, while US grain farmers said they actually don’t expect the US to go ahead with the tariffs.

Bayer said it hopes to be able to start integrating Monsanto in two months, after the US antitrust regulators approved a plan for the USD 62.5 billion takeover. The new company would have annual sales of about EUR 20 billion, dwarfing sales of the two other competitors who were also recently engaged in mergers, namely DowDuPont who has EUR 12.4 billion in annual sales and  ChemChina-Syngenta with EUR 11 billion in sales. BASF, the fourth largest agricultural supplier, is also expected to benefit as it plans to purchase assets worth USD 9 billion Bayer agreed to sell as part of the antitrust approval.

Cargill plans to have a 100% transparent and sustainable palm oil supply chain by 2020, according to the group’s supplier’s global sustainability director, who said 96% of the volume was already traceable to mills and 55% traceable to plantations. The company will be using a satellite mapping tool this year to identify and improve issues in the supply chain. The director said they are using lessons learnt from the soy and cocoa supply chain.

India’s Adani Group is likely to take over Shree Renuka Sugar‘s sugar segment from Wilmar Sugar. A board member of Renuka Sugar and a senior executive of Adani group said Adani Wilmar may be interested in adding sugar to its product mix and to leverage the latter’s distribution network. Wilmar International will also launch an open offer for a 25.14% stake from June 4-15 to help its arm Wilmar Sugar increase its stake in Renuka Sugar from the current 39%. Separately, Adani Wilmar reportedly increased its offer to acquire the bankrupt edible oil refiner Ruchi Soya group.

Nestle is downsizing its workforce in Switzerland by 5% and relocating some positions to Spain and Portugal in a bid to reduce costs, in part because of the strength of the Swiss Franc. It will also close its headquarters in Kenya. The CEO said the group will spend USD 706 million in restructuring this year. The Research Centre and the Institute of Health Sciences will be merged into a single entity to speed up the development of new products. Nestle wants to accelerate research efforts amid growing competition from smaller rivals and increasing preference for organic, vegan and gluten-free products.

In Spain, the company launched its first range of organic products which should grow to represent 10-15% of the turnover within 5 years. The regional head said this was in answer to consumer demand and that “Nestle has decided to bet heavily on organic products.” Meanwhile, in China, Nestle has sold its 95% stake in a raw milk powder factory.

And Pepsi bought Bare Foods Co, the maker of healthy chips made from beet or baked apples, to further expand its health-conscious food offering.

French MPs voted down a proposal to ban the use of glyphosate, although a presidential spokesperson clarified that the government was still committed to phasing out the use of the herbicide by 2021. In another twist, the Belgian government said recent scientific research on glyphosate did not conclusively show any health risks.

An investigation by The Guardian and the Bureau of Investigative Journalism found an increasing number of industrial-scale beef fattening units in the UK – an area which is overall unregulated and unacknowledged – causing concern that the country’s agriculture is developing towards the type of industrial-scale farming common in the US. The environment secretary said they would fight against this US-type of farming but producers argue that it’s the only way to be cost competitive.

Organisations in the UK are working hard to redistribute food that would otherwise be thrown away. In 2017, the food bank Trussell Trust distributed 1.3 million parcels of food, up 13% from the previous year. Similarly, Charity FareShare gives food to some 750,000 people every week, an increase of 60% on year. Demand from food charities is increasing with an estimated 1 in 8 people experiencing hunger in the country.

In the first research of its kind, a study found that rice could have as much as 10% less protein, 5% less zinc and 30% less vitamin by the end of the century due to the increasing levels of carbon dioxide in the air. Rice represents half the calorie intake of around 2 billion people, which means the nutrient loss would have a significant impact on health.

This summary was produced by ECRUU

Commodity Conversations Weekly Press Summary

Wilmar has secured a USD 1.5 billion syndicated loan facility to refinance its debt and working capital at a time when its sugar and tropical oils businesses are going through a slump. In Uganda, meanwhile, the group has managed to get the final go-ahead to secure more land to grow palm oil for its local subsidiary Bidco Uganda – a project that had been delayed for over 10 years. The government will also be allocating them land to develop a vegetable oil refinery. In Zimbabwe, Wilmar has made an offer to buy 50% of the Cotton Company of Zimbabwe (Cottco) which also has edible oils operations. Cottco hopes that Wilmar would help revive operations as the fall in cotton output has led to a drop in cotton-derived oil production.

US-based farmer-owned Central Valley Ag Cooperative announced it will buy out of its joint venture with Cargill in Progressive Ag Partners so that it can have full control of the grain storage company. Regardless, Cargill’s North America agriculture supply chain president recently said that “Cargill [now] has an even stronger emphasis on commodity trading and being the leading merchants of grain. The core of what we do is trade grain.” He explained that the company was focusing on providing farmers the best services, including an efficient and fast supply chain. An analyst explained that, in the grains industry, this meant being the fastest at loading at grain elevators when other smaller groups face queues. Looking forward, Cargill plans to continue adding value and serving farmers by using advanced technologies such as blockchain to solve issues like labeling and traceability.

Cargill, as well as Nestle Purina, will be working with the Nature Conservancy on a three-year project designed to reduce water usage in the beef supply chain. The aim is to use technology such as weather apps and sprinklers to help farmers reduce the water use when irrigating the crops that will be fed to beef. Eventually, the technology should be scalable to all US farmers.

Cargill, Richardson International and ADM are among the grain trading firms focusing on plant-based proteins (such as peas) to reap higher margins amid growing demand from China and health-conscious consumers in the US. Cargill has put money in a joint venture with PURIS which owns a Wisconsin plant that makes peas powder. It is also working on developing pea varieties with more protein as it is an ideal food that is plant-based and gluten-free.

Similarly, ADM is setting up a pea plant in North Dakota and getting farmers on board to grow yellow pea. The group said it was still working on solving issues with flavours and functionality, however, so that the protein could be used more in food processing. Ingredients company Roquette also announced last week it was starting a new production unit in France for speciality pea protein.

Unilever New Zealand has said that sustainable living products accounted for 70% of company’s revenue growth in 2017, and grew 46% faster than other product categories due to increasing consumer awareness. In India, the company just completed its second round of investment in the grocery delivery service Milkbasket. The startup has developed an “early morning, contactless, micro-delivery model akin to the prevalent newspaper and milk supply chain models.”

Brazil fined five grain trading groups, including Cargill and Bunge, for buying soybean produced in areas linked to deforestation. Farmers were also fined for growing soybeans in these areas. However, Bunge said it had checked databases which had indicated that these areas were in line with their best practices. Reports suggest that the amount of forest land being cleared illegally to grow soybean is increasing rapidly in the Matopiba region.

The European Court of Justice maintained its ban on neonicotinoid after finding that the Commission’s 2013 conclusion that these insecticides harm bees was valid. The ruling will give a leg-up to last month’s decision to limit the use of neonicotinoids to greenhouses, but Syngenta and Bayer said they would weigh future action. Similarly, Dutch sugar beet growers as well as their Belgian counterparts have urged their agriculture ministers to seek exemption from the ban. The Belgium agriculture minister argued that investors will be tempted to go to countries where there are fewer environmental restrictions.

Sales of frozen food witnessed growth for the first time in five years in 2017 driven by demand from millennials.  An analyst with Euromonitor explained growing preference for vegan foods and millennials having less time for cooking a full meal with meat have also spurred demand for frozen food. Another analyst pointed out that the record-high number of single people in the Americas was also contributing to the consumption of frozen food. The plus point is that there tends to be much less wastage than with fresh food.

Finally, illegal gold mining is displacing cocoa plantations in Ghana. Given that the country produces 20% of the world’s cocoa, this is expected to have a significant impact on the price of chocolate. See BBC’s investigation here.

This summary was produced by ECRUU

Commodity Conversations Weekly Press Summary

Cargill is worried that the US strategy to tackle the tariff issue with China will worsen trade tensions between the two countries. The US is considering imposing tariffs worth USD 50 million on Chinese goods in response to Beijing’s threat to impose duties on US soybeans and other commodities. As a result, China’s COFCO plans to buy more soybean from Brazil. A source said the company had expanded its teams that deal with farmers in Brazil. Olam and Wilmar, too, are looking to import from South American nations like Brazil and Argentina to avoid paying high taxes.

ADM and Bunge, on the other hand, expect they will benefit from the trade dispute, combined with the drought in Argentina. The CEOs of both companies said the uncertainty provided volatility and opportunities for arbitrage across origins which would help improve margins. Looking forward, however, ADM’s CFO is confident that China and the US will sort out their differences.

Another trade deal which is not going well is NAFTA. The negotiators from Canada, Mexico and the US are likely to miss the May 17 notice of intent deadline fixed by the House speaker so that the Congress could vote on it in December. The Mexican Economy Minister said the trade treaty was unlikely to be rewritten in 2018.

Olam reported its net profit rose by 10% on year to USD 118 million in Jan-Mar (Q1) due to lower taxation and finance cost. Sales volume soared by 56% boosted by grain trade.

Louis Dreyfus announced it has completed the sale of its metal segment – one of its most profitable – to China-based fund NCCL Natural Resources Investment. Louis Dreyfus had in December announced the sale of its metal segment as it looks to focus on its main agriculture trading business.

Bunge, meanwhile, announced on May 15 that it has filed for an IPO of its Brazilian sugar and ethanol arm Bunge Acucar & Bionergia with the Brazilian security commission. Bunge plans to keep a controlling stake in the unit after the public offer.

Alvean, the joint-venture between Copersucar and Cargill, has renewed its long-term supply contract with Dubai-based sugar refinery Al Khaleej. Al Khaleej already bought 20 million mt of raw sugar from them (and Copersucar prior to the creation of the JV) over the past 20 years.

However, a Saudi Arabia-based investor thinks there is potential for Dubai to grow more of its own food. The group has set up a vertical farm to grow vegetables and crops. The emirate currently imports around 90% of its food requirement.

Nestle will look to reduce the level of sugar by another 5% in its packaged food products amid growing preference for healthier foods across the world. The CEO said they have already reduced sugar content by 34% since 2000 and spent USD 1.7 billion in research and development in 2017. The group launched “Nestle for Healthier Kids” program which aims to make the life of 50 million children healthier by 2030. Nestle will add additional fruits, vegetables, fibre-rich grains and micronutrients to the foods and beverages for children. The company will also continue to cut salt as well as saturated fats. Nestle Bulgaria, meanwhile, announced it would reduce electricity consumption of its mills by another 2% as well as reduce the use of water.

At a time when consumers want to know more about their food, Cargill has launched a new interactive beef guide that explains beef production in the US and Canada. It has an online story map called ‘Raising Beef to Higher Standards’ with gives details about ranchers, stockers, feedlot operators and packing plant and other information that might be useful to cattle rearers. Users can virtually explore cattle ranches and feeder operations using aerial maps while also locating feeder lots and packing plants.

Finally, Scandinavia is witnessing a bout of cross border trade as consumers try to evade taxes. After Norway recently hiked its sugar tax by 83%, neighbouring Sweden’s border areas saw a surge in the sale of sugar containing products. A Sweden-based supermarket manager said sales of products affected by the sugar tax had shot up by 10-20% as a result, also aided by the weak Swedish currency.

This news summary has been produced by ECRUU

Commodity Conversations Weekly Press Summary

The World Bank’s International Finance Corporation offered Olam International a USD 120 million unsecured corporate loan, which will go to supporting Olam’s supply chain and improve its market access. The IFC hopes the loan will help some of the 40,000 smallholder farmers who supply Olam.

Nestle reported a 3% organic growth in the first three months of 2018 partly thanks to a good performance in Asia. The group announced a USD 7 billion deal to distribute Starbucks coffee and tea in stores around the world. Sales of premium coffee are reportedly faring much better than traditional roasted coffee with Nespresso grabbing only 1% of the single-serve coffee market in the US. Petcare was among Nestle’s fastest growing segments in the US, particularly natural products. AMD is also expanding its pet business and recently inaugurated a USD 35 million animal nutrition premix factory in Illinois.

Keystone Foods LLC, who supplies chicken nuggets to McDonald’s, is for sale as its Brazilian parent company Marfrig Global Foods is looking to reduce its debt and finance the purchase of a beef packaging firm in the US. Cargill and Tyson Foods Inc are among the interested firms, according to sources who suggested that a USD 3 billion deal could be signed within the next few weeks.

Farmers in the US are worried about China’s unwillingness to discuss the trade deficit. Some Chinese officials reportedly think the economy is strong enough to take the US head-on in a trade-war. On the other hand, an agribusiness expert argued the face-off have created trading opportunities for grain exporters who could benefit from the added volatility.

China is hoping to use new gene editing technologies, like Crispr, to take the lead in gene editing and develop better crops. Syngenta, the Swiss firm recently purchased by ChemChina, is building a research center in Beijing. The CEO said the government was very supportive.

The country spent about twice as much on agricultural research than the US in 2013. Experts think tools like Crispr could disrupt the industry, previously dominated by US firms like Monsanto and DowDuPont because they do not rely on adding foreign DNA, which means regulation could be lighter.

The USDA is still working on the guidelines that will clarify how food firms have to disclose the presence of genetically modified food in their products. The agency published a draft proposal, ahead of the July 29 deadline, although some details are missing, such as whether genome editing will fall under the “GMO” classification. The USDA did suggest that the term “bioengineered” could be used instead of “GMO”.

Still on the topic of GMOs, a US columnist claims that if you are anti-GMO, you’re anti-science, too. He notes that the scientific consensus clearly suggests that directly modifying genes instead of doing it through slow selective breeding has no consequence for our health. Going further, he draws a comparison with climate-change deniers and anti-vaxxers to argue that denying the truth about GMO could have a real human cost. A new book by an early anti-GMO activist, called “Seeds of Science: Why We Got It So Wrong on GMOs” is due in June.

A recent study argued that efforts to reduce the carbon emitted during the production of agricultural goods needed to be complemented by efforts to reduce emission linked to food consumption in large cities. It suggested implementing better solutions to manage distribution, localised production and waste management. Another study by the Changing Markets Foundation argued that the sustainability certification schemes for palm oil and fish did little in terms of protecting the environment and ensuring sustainable agricultural practices. It claimed that the certifications had to lower their standards in order to capture most producers.

Last Friday, the WHO published its recommendation for trans fats and saturated fat consumptions, 15 years after its previous recommendation was published. The agency says the fats should represent less than 10% of total caloric intake to lower the risk of cardiovascular diseases.

Human Reproduction published a study suggesting that women who consumed fast food regularly would take longer to conceive. However, experts noted that like most food studies, researchers had to rely on the subjects remembering what they ate during the month before their pregnancy, which limited results.

Remember last year’s French butter crisis? Well, prices are still going up as supply problems have not been addressed, according to bakers, who are worried about their dwindling profit margins.

This report prepared by ECRUU

Commodity Conversations Weekly Press Summary

Bunge saw a loss of USD 29 million in the Jan-Mar (Q1) quarter, down from earnings of USD 39 million in the same period last year. However, the company explained that a big part of the losses was due to an increase in forward soybean crushing margins, which means losses should be offset later in the year once the contracts are executed. As a result, it increased the forecast for operating profits this year to between USD 800,000 million and USD 1 billion, compared to USD 550,000-700,000 previously forecast.

On the other hand, losses in the sugar segment increased to USD 24 million mt in Q1, up 40% on year as low sugar prices could not offset the higher ethanol values. Bunge reduced its full-year forecast for operating profits from USD 50-70 million to USD 40-60 million for the sugar division as a result. The company said that it is planning to file for an IPO of its Brazilian sugar mills in May, adding that mills have assured debt financing and can now operate independently. The company had spent over USD 1 billion in its acquisition of the sugar mill operator Moema in 2010.

ADM announced a 16% jump in its profit for Q1 due to better margins and higher soybeans processing volumes in North and South America. However, it is anticipating a USD 30 million negative impact in its Q2 results due to China’s anti-dumping tariffs on sorghum. In combination with DuPont, the group opened a pilot facility in Illinois, US, to make bio-based plastic from corn-based fructose which aims to cut plastic in soda bottles by 25%.

US-based POET dislodged ADM as the world’s top ethanol producer. Previously, both companies had an annual capacity of 1.8 billion gal, which POET expanded to 1.9 billion gal, with a goal of 2 billion gal by 2019, while ADM reduced it to 1.6 billion gal.

The Commodity Futures Trading Commission (CFTC) has fined Glencore Agriculture and Glencore Ltd USD 2 million for breaking trading rules between January 2013 and November 2015. These included breaching speculative position caps and illegal wash deals.

Mondelez International’s profit and sales in Q1 exceeded market expectation due to a strong showing in Europe and emerging markets.

EU members have voted in favour of a near-total ban on the use of neonicotinoids following studies that found its use posed a threat to bees and other pollinators. The sugar beet industry warned this would have a significant impact on yields as there are no alternatives, adding that it threatened the future of the industry.

The head of Unilever said the efforts to source palm oil sustainably were not working well enough, as he noted that deforestation accelerated significantly in 2016. He called on the G7 and G20 to include the topic of food security and sustainability in their agendas. Meanwhile, Greenpeace International has accused Indonesia’s Megakarya Jaya Raya, which supplies palm oil to Nestle, Mars, Pepsi and Unilever, of destroying over 4,000ha of rainforests in the Papua region between May 2015 and April 2017.

UK-based supermarket chain Iceland decided to stop buying products containing palm oil from the end of 2018, saying its production encourages deforestation. The palm oil industry warned, however, that palm cultivation needs less land than other oils.

Leading retailers and food firms such as Walmart, Nestle and Kellogg last week joined a new drive that aims at creating more environmentally and socially responsible global supply chains and ensuring that bonded labour is not used. The Consumer Goods Forum, consisting of around 400 food retailers and manufacturers across 70 countries, is setting up a benchmark auditing and certification system to avoid duplication in audit and promote sustainable sourcing.

Similarly, food industry stakeholders and supermarkets in the UK including Unilever, Nestle and Pepsi will do away with non-essential single-use plastics by 2025 and make sure that the rest of the packaging is recyclable, degradable and reusable as a part of the government’s Plastics Pact. They will also ensure recycling of a minimum of 70% of plastic packaging compared to around 33% now, and use  plastic packaging with an average of 30% recycled content.

In the US, the Illinois House of Representatives passed legislation that seeks to permit farm zones in cities deficient in fresh food items. The bill, which will now go to the Senate, also seeks to create a fund from the sales tax proceeds of such farm produce to finance social programmes.

More and more start-ups are looking at plants to replace animal products, such as eggs, milk, cheese and meat, to lower the carbon impact of agricultural productions. Taste, however, is particularly hard to perfectly reproduce and the race is now moving to finding a cheap way to make lab meat. Following the success of Maastricht University who made the first cultured meat in 2013, Cargill is backing Memphis Meats’ effort to make beef, chicken and duck in labs. Nonetheless, making food in laboratories goes against the move to eat more natural and local ingredients, and a former consultant for Monsanto warned that the burgeoning industry needs to manage its image carefully.

This summary produced by ECRUU

Commodity Conversations Weekly Press Summary

Louis Dreyfus announced it has reorganised its top management team to include eight new members, including the head of finance, a Group COO and a strategy chief. It said the new team will focus on its Brazilian sugar company Biosev, which underwent a USD 1.45 billion recapitalisation in 2017, and on China’s soybeans market, which is exhibiting a higher feed demand. It also clustered its grains and oilseeds segments with its finance and freight divisions.

Cargill has leased its port-based sunflower processing unit in Quequen, on Argentina’s Atlantic Coast, to Renova, the joint venture between Glencore and Vicentin, for a year. Cargill has been struggling with workers protests which have affected soybean crushing and exports from Argentina. The situation has created concern that the company may not be able to export as much soybean as a result.

In the US, meanwhile, Cargill has donated USD 150,000 to set up a poultry research centre at the University of Arkansas. The facility will focus on developing alternatives to antibiotics, including probiotics, prebiotics and other nutraceutical-type products. Similarly, ADM is tying up with a Chinese group to open a lab in California that will focus on developing feed and enzymes to improve animal health and nutrition. ADM explained that adding enzymes to swine and poultry diets, for instance, helped their digestion, improved their wellbeing and reduced their carbon footprint.

Canada’s Walmart has officially committed to being waste free by 2025 by becoming more efficient, discounting food about to go off as well as by donating through local food banks. The group will also give USD 15 million to help find solutions to reduce wastage along the supply chain.

UK-based company AB Sugar has pledged to use all recyclable and biodegradable plastic packaging and reduce its carbon footprint by 30% by 2030, according to its first sustainability report. The company will also cut down water usage by 30% in association with its 25,000 producers.

In China, Nestle will sell 67 more items on Alibaba’s Tmall in an effort to grab a larger share of online sales. A company official forecast the Chinese online market will become bigger than Europe and the US combined in 2018. Meanwhile, Nestle is set to lose its KitKat four fingers patent case to Mondelez which would open the gates for other European candy producers to make similarly shaped items. Sources say the European Court is likely to agree with the attorney general’s findings that the shape is not distinctive enough to give Nestle its sole ownership.

US citizens throw away a total of 150,000mt of food per day. The USDA study found that the Americans with healthier diets consuming fruits and vegetables wasted the most followed by dairy and meat consumers. Discarded food translates into an annual waste of 30 million acres of land, 354,000mt of pesticide and 4.2 trillion gal of irrigated water, besides choking landfills and increasing methane release.

A campaign by the Eating Better coalition, consisting of 50 civil society groups, has drafted eight principles to guide consumers on making healthier choices on meat and dairy products and lessen the damage they inflict on the environment. The group recommends buying meat in smaller quantities to reduce waste and improve health. It advises lowering consumption of intensively reared animals like chickens and pigs in which there is antibiotic overuse. The coalition also demanded better labelling of foods.

In an era when 10 companies own 75% of global seeds trade and 94% of the vegetable seed varieties have been lost, Open Source Seeds (OSS) is trying to promote the common ownership of seeds. So far, however, it is struggling to win over plant breeders and has licensed only 3 varieties each of tomato and wheat. The group argues that having diverse crop varieties will come in handy at a time when climate change is a challenge. It added that having an open-source market will ensure continued development and breeding of multiple varieties of each seed.

On a more artistic note, click here to see the best contendants for the Food Photographer of the Year.

This report was prepared by ECRUU

Commodity Conversations Weekly Press Summary

Cargill is planning to invest USD 118 million in Brazil in 2018 in developing waterways and rail transport as an alternative to trucks, and its Santos Port terminal. Cargill already acquired the remaining stake in the Cevasa sugar and ethanol mill and, with SJC Bioenergia, is banking on the booming corn-to-ethanol business. The head of the Brazilian operations said that regardless of the uncertainties brought by the elections Brazil will continue to be a major global food producer, adding that the challenge lies in bringing these crops to port.

Wilmar and the India-based group Adani via their joint venture Bangladesh Edible Oil Ltd (BEOL) are planning to spend USD 350 million to build an agro-based foods and allied products industrial park in Bangladesh. BEOL said the popularity of its edible oil was encouraging the investment.

Olam has announced the launch of AtSource, a technological solution for a sustainable agricultural supply chain which allows customers to see the social and environmental footprint of a commodity. The dashboard will start by showing the supply chain for West African cocoa and cashew, as well as Brazilian and Vietnamese coffee, among others. It’s target is for all of its products to be on AtSource by 2025.

Similarly, Hershey has launched Cocoa For Good, a USD 500 million initiative to help cocoa farmers improve their livelihoods as well as promote sustainable farming practices as the company aims for all of its cocoa to come from certified sustainable sources by 2020. The company is working with Sourcemap to make its supply chain more transparent.

The exiting head of Sucden’s cocoa trading desk, who has been in the business for 50 years, is arguing that the drive to grow sustainable cocoa is keeping farmers poor. He explained that the system allowed the various companies involved – including NGOs – to cash in on sustainability practices but that West African cocoa farmers are probably poorer today than they were before.

In Brazil, conservation groups have offered USD 5 million in grants to help turn deforested and degraded Amazon land into 1,700sq km of cocoa tree plantations. Cocoa trees are financially more interesting than using the land for cattle ranching, which faces additional rules designed to curb further expansion into the forest. Brazil’s Cocoa Processing Industry expects production to double to 400,000mt/year by 2028, which would increase global production by 5%.

China’s high birth rate and rising middle class allowed Danone to increase its sale of baby formula, dairy products and water brands in the country. In Europe, on the other hand, sales of dairy products during the first three months of the year were 0.3% lower than last year as the firm is trying to adapt to changing tastes and slow demand growth.

Nestle reportedly made some progress over a dispute with AgeCore, which represents six retailers in Europe, which started in September last year over supply terms. AgeCore, whose membership includes Switzerland’s Coop and Germany’s Edeka, has been encouraging its retailers to boycott Nestle products. And in the US, Nestle Waters has abandoned a plan to build a bottling plant in Pennsylvania, although it might look for alternative sites. Food & Water Watch welcomed the news and highlighted the strong opposition the project had faced.

In the UK, the dairy and meat industries – with the support of NGOs such as the animal rights group RSPCA – are trying to change the name of “veal” to “rosé beef” in an attempt to convince more people to eat veal; this could give an outlet for male calves that are otherwise killed at birth. The Guardian found that as many as 95,000 calves are killed at birth as it is cheaper to kill them than to keep them alive.

In the US, cell-cultured meat – so-called clean meat – is causing regulatory confusion. The US beef industry is divided between those who say it should count as meat as it comes from a stem cell and those who argue that it is technically a food additive. Whether it is the former or the latter could impact the definition of “meat” as we know it. It is also unclear which government body should take the call. Some say it falls under the US Department of Agriculture (USDA), others argue it’s in the Food and Drug Administration (FDA) department and others still say that only Congress can take the call.

A recent study looking at – and grading – how supermarkets in the US work to reduce food waste found that none of the major groups managed to score an A. The company that fared best was Walmart thanks to policies like clearer labeling which distinguish between “Best if Used By” and “Use By” dates, among others. The study found that part of the problem was that the supermarkets are not disclosing data, making it hard to assess how much is actually being wasted, and therefore making it harder to find solutions.

The European Commission has allowed member states to declare dual standard food as illegal, after Central and Eastern European countries complained that multinational firms were selling lower quality food in their countries despite identical packaging. For example, eastern countries complained that animal fat was often substituted with vegetable fat and sugar was substituted with artificial sweeteners or corn syrup. In response, food producers had argued that these differences were designed to suit local tastes.

Finally this week, a new book, called The Food Explorer, tells the unusual tale of an American botanist and explorer, who at the age of 22 founded the USDA’s Section of Foreign Seed and Plant Introduction. Over 37 years of travel, David Fairchild travelled to more than 50 countries to bring back new or better fruits and vegetables, such as mangos, quinoa, dates, cotton or soybeans. He even befriended Bavarian beer makers to bring back some of their high quality hops. Kazakhstan gave him apples, New Guinea gave him bananas and China oranges and lemons: The food we eat is indeed the product of a globalised world.

This report was produced by ECRUU

Commodity Conversations Weekly Press Summary

Cargill reported a 24% decline in net profit to USD 495 million for the Dec-Feb (Q3) quarter, mostly due to a USD 161 million adjustment cost to comply with the new US tax law. The firm said profit would have been up 1% without the tax change, while sales increased by 2% on year to USD 28 billion. The biggest growth contributor was its animal nutrition and protein segment, followed by the food ingredients unit, although it was impacted by low ethanol prices in North America and high manufacturing costs in its European sweetener and starch business.

Cargill is investing USD 20 million to double egg processing capacity at its Minnesota plant. The company explained that Americans seemed to increasingly prefer eating out for breakfast, instead of lunch or dinner as it used to be the case. The company already spent USD 900 million in its North American protein business in the last two years to meet the growing demand for animal protein which it attributed to a growing middle class.

Cargill said India  was an important growth market for the group and hopes to turn the country into an export base for products like corn. However, the company’s CEO for the Asia-Pacific region said India must first promote free trade and adopt technology such as GM seeds to meet its target of doubling the income of farmers.

Olam reported a post-tax profit of USD 551.65 million in 2017, up from USD 339.10 million in 2016. The COO attributed the increase to improved efficiency as it invested to make its supply chain more digital. The company foresees important changes in people’s eating habits, including a move towards ethical eating which requires increasing traceability. With this goal in mind, it will be implementing a Living Landscapes Policy at its farms and its network of third-party suppliers, which include around 4 million small and big farmers. The policy is designed to attend to ecological and social problems which affect its agricultural supply chain.

Louis Dreyfus announced a USD 50,000 grant to World Coffee Research to work on areas such as low yields, impediments in improving quality and impact of climate change on the commodity. An LDC official said the grant is part of its sustainability efforts to achieve positive and long-term impacts on the coffee value chain.

Meanwhile, Netafim Mercosul, a Brazilian irrigation company that allows farmers to buy their irrigation systems against some of their production, has seen an 116% increase in coffee irrigation projects in 2017. The company also saw revenues grow by 109% as more farmers, struggling to get bank financing, turn to this barter system.

ADM Arkady, ADM’s UK feed distribution arm, has entered into a long-term deal with the Peel Ports Group which will develop its Glasgow port facilities with a view to improving the handling of animal feed shipments. The managing director said the deal was aimed at combining regional feed shipments and improving supplies to the north of England and Scotland markets.

The UK’s grain trading market is likely to see consolidation soon as small and regional grain traders struggle to stay profitable amid falling margins. Several groups have already exited grain trading in the past year. A Dalmark group director argued that the entry cost was too low while high volatility and reduced crop volumes have pushed up expenses and lowered margins.

Brazil-based Marfrig Global Foods will acquire 51% stake in Kansas-based National Beef Packing Company for USD 969 million to become the world’s second-largest meat producer. The Kansas-based National Beef is the fourth largest beef processor in the US.

The UK launched its sugar tax last week. The government is apparently already considering bringing other products, such as added-sugar flavoured milk drinks under the tax to tackle obesity. Food manufacturers and bakers have voluntarily agreed to lower sugar content in cakes, biscuits and cereals by 20% in the next four years. On the other hand, Coca-Cola launched a marketing campaign for its original Coke highlighting the fact that the recipe hasn’t changed – which means the price has gone up due to the tax.  

Coca-Cola India will launch its first sugar-free drink in India to meet changing consumer tastes. An official explained that people in cities were increasingly concerned about their health, adding that the sugar-free beverage segment was growing fast. In the same vein, Nestle will spend USD 27 million on modernising its prepared foods and noodle-based soups plant in Ukraine. The modernisation plan, which would be completed by 2021, aims at reformulating recipes to reduce fat content in line with WHO’s dietary recommendations.

Nestle also announced a target to only have recyclable or reusable packaging by 2025. Some NGOs complained, however, that the announcement amounted to “greenwashing” given the lack of clear quantitative targets. The company CEO admitted that “plastic waste is one of the biggest sustainability issues the world is facing today” but that the company’s ability to deal with that problem also depended on each country’s recycling infrastructure.

Similarly, Unilever has joined hands with the world’s top PET resin maker Indorama Ventures and a Dutch start-up Ioniqa to develop a technology that transforms PET waste into new food packaging material – a technology that could revolutionise food packaging and reduce waste. The technology has cleared the pilot testing phase and will now be tested at an industrial scale.

Finally, the not-for-profit advisory firm Ceres has said that not enough food companies are committed to end deforestation. It found that less than 50% of the 469 food manufacturers that have deforestation commitments in 2018 have made official plans to improve traceability across their palm oil supply chain, and less than 20% plan to make it completely transparent – the way Nestle and Unilever have done.

This report was produced by ECRUU

Commodity Conversations Weekly Press Summary

Louis Dreyfus has finalised the acquisition of Chinese oilseed crushing business Sinarmas Natural Resources Foodstuff Technology and its plant in the port of Tianjin. The CEO said it was part of the strategy to focus on China and its growing domestic demand. 

ADM has been going through several waves of restructuring – the latest announced last month – as it tries to cope with a changing and more competitive environment. Meanwhile ADM’s office in Germany is facing a routine audit which may force the company to pay higher taxes. 

Bunge is having difficulty in selling its sugar trading unit with potential buyers finding the USD 75 million targeted value too high. Nordzucker and Wilmar have reportedly looked at the business. This lack of interest may make it harder for Bunge to sell its sugar milling segment, which could be valued at USD 1-2 billion.

Cargill will switch to a controlled-atmospheric stunning (CAS) system at its chicken processing facility in Ontario instead of electric stunning. The company explained this was part of the efforts to meet growing consumer concern for animal welfare and a more humane way of slaughtering animals, adding that the less stress the chicken experience the better the meat tastes.

Cargill is also helping McDonald’s find a way to feed chicken with insects and seaweed instead of soy, as part of the restaurant’s pledge to support forests. They found that chickens digest the insects better than vegetable protein which also makes them healthier.

The Parma Ham Consortium in Italy has denied allegations of poor animal welfare at several breeding farms after videos were made public by activists. The director of the organisation added that they were working on improving traceability and had put together guidelines with the Research Centre on Animal Production. A UK-based animal welfare organisation pointed out, however, that animal processing companies had the challenge of finding the right balance between taking care of animals but providing cheap meat.

Nestle has won the right to increase the groundwater extraction rate in Michigan from 250 gal per minute to 400 gal for its Ice Mountain Natural Spring Water plant which was recently expanded. The move angered environmentalists but the Michigan Department of Environmental Quality said it had reviewed the case carefully before granting the permit. Environmentalists argued that Nestle was able to get the water for free and only paid a USD 200 annual permit. In Brazil, meanwhile, Nestle decided to sell its water business – which includes the Sao Lourenço and Petropolis brands and three factories – to local company Grupo Edson Queiroz.

The soaring price of vanilla, which we mentioned in last week’s report, is leading to crop theft and deforestation in Madagascar – the world’s main vanilla producer. An investigation by The Guardian found that protected forest land was being cleared to plant vanilla as locals try to take advantage of the sky-high prices. The investigation also found that while vanilla prices have risen after a cyclone destroyed a big part of the crop last year, the price has also been inflated by speculators who are using vanilla sales to launder money made from logging and illegally exporting rosewood to China.

After much deliberation, a court in Los Angeles ruled that coffee sellers in California will have to put a cancer warning label on the coffee. The whole thing started after an organisation sued several coffee companies – including giant Starbuck – accusing them of not warning consumers about the presence of a chemical considered carcinogenic. Although the ruling only applies to California the label may eventually appear on a national level because it would cost too much to tailor packaging to one state only.

A report by NAFTA’s Commission for Environmental Cooperation found that food wastage in Canada is among the highest in the world. The estimated 396kg of food wasted per capita could cost as much as CAD 30 billion and create 21 million mt of greenhouse gas emissions. While a big part is lost before it reaches the consumer, people throw away around 170kg/year. The organisation called on consumers, as well as food industry stakeholders to intervene to reduce the waste.

In the UK, FareShare is asking people to sign a petition that would request the government to set up a GBP 15 million fund to help reduce waste by redistributing it to the hungry. The charity said this would help remove the burden from farmers and producers who currently have to bear the cost of moving the surplus around. An estimated 270,00mt of edible food is in surplus every year, out of which only 17,000mt is redistributed.

Report produced by ECRUU