Commodity Conversations Weekly Press Summary

The UK’s Food and Drink Federation (FDF) said exports to the EU dropped by 75% in January, when compared to December, because of Brexit. Nonetheless, a UK minister claimed that trade flows had returned to normal levels in early February. A House of Lords sub-committee seemed to disagree, however, as it noted that non-tariff barriers would continue to slow trade for a while. Exporters now have to deal with more paperwork which increases costs. Moreover, the UK delayed the implementation of customs checks for EU imports until October. As a result, the FDF warned that the “full impacts of the end of the transition on imports from the EU will not be seen until 2022.”

In China, meanwhile, COFCO is working on merging its domestic units with COFCO International ahead of a potential Initial Public Offering (IPO), sources suggested. The IPO, estimated at USD 5 billion, could happen later in 2021 or at the start of 2022. The new entity would be key to China’s food security, while the unit handled over 100 million mt of commodities in 2018, generating USD 31 billion in revenue.

The global availability of containers remains tight following the surge of imports from China, but Moller-Maersk suggested that the situation should return to normal in the first half of the year. The lack of containers is already leading to supply issues, however, as coffee stocks in the US are reportedly running dry. The shortage might also be due to a fall in output in Brazil, while a broker commented that the coffee market could be entering into a structural deficit. 

The blockage of the Suez Canal caused by the Ever Given container ship could potentially add even more delays to global shipments. Some 12% of global trade passes through the canal and hundreds of ships are currently waiting for the vessel to be moved. Tug boats could free the ship within the next few days which would minimise the impact, although a delay of a week or more would have major implications. 

As if the situation wasn’t complicated enough, the number of containers that fell off cargo ships surged since November 2020, with 2,980 containers lost, more than twice the annual average. Shipping firms blamed the bad weather and storms. Experts, however, explained that the container shortage pushed companies to use older vessels and to pack them as much as they can which increased the risk of losses. A company that lost containers mentioned that “if anybody has investments in deep-sea salvage, there’s some beautiful product down there”.

A new study published by the FAO this week estimated that global food production was responsible for 34% of total greenhouse gas emissions in 2015, down from 44% in 1990 but much higher in absolute terms. Out of the total, 71% of emissions came from the farm and land use, while the other 29% came from distribution. Researchers hope the study will help design mitigation measures to make our food more sustainable. Danone already acknowledged the report and highlighted its own efforts to reduce its environmental impact. 

Danone’s former chair and CEO was focused on purpose-driven capitalism but a small investor was able to push for his removal based on his governance and financial performance. Bluebell Capital was able to form a consensus among large shareholders to replace him. Activists investors are reportedly ready to push for changes again after a pause during the pandemic. For one, Robeco Institutional Asset Management, which manages USD 2.4 trillion in assets, is pushing for changes to the EU’s CAP. The revised program needs to account for climate targets when calculating payments, the group argued. 

Another report published this week suggested that Europe and North America will reach peak meat consumption by 2025. Alternatives, such as plant proteins or cultured meat, will continue to improve while consumers’ preference will keep shifting towards healthier and more sustainable products, the paper suggested. The alternative meat market should reach USD 290 billion by 2035. 

Investors certainly believe in the future of alternative meat products, as Eat Just just raised a further USD 200 million, bringing total investments to USD 650 million. The group makes egg alternatives using plants and cultivated meat. Similarly, Meatable raised USD 47 million this week. The group cultivates meat without using the controversial fetal bovine serum, although the process currently costs USD 10,000/lb. 

Being stuck at home has changed the eating habits of many people but this journalist discovered that eating three meals a day is not actually based on nutritional or biological science. Eating three meals a day is a recent consequence of industrialisation and nutritionists suggest that eating when you are hungry instead of at meal times can be just as healthy, as long as the total quantity of food remains more or less constant. The journalist took this to heart to continue having his one Big Meal per day. 

This summary was produced by ECRUU

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Commodity Conversations Weekly Press Summary

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

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

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

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

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

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

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

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

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

This summary was produced by ECRUU

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Commodity Conversations Weekly Press Summary

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

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

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

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

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

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

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

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

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

This summary was produced by ECRUU

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Commodity Conversations Weekly Press Summary

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

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

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

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

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

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

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

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

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

This summary was produced by ECRUU

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Commodity Conversations Weekly Press Summary

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

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

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

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

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

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

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

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

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

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

This summary was produced by ECRUU

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Commodity Conversations Weekly Press Summary

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

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

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

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

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

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

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

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

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

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

This summary was produced by ECRUU

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Commodity Conversations Weekly Press Summary

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

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

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

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

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

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

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

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

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

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

This summary was produced by ECRUU

 

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Commodity Conversations Weekly Press Summary

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

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

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

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

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

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

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

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

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

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

This summary was produced by ECRUU

 

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Commodity Conversations Weekly Press Summary

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

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

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

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

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

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

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

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

This summary was produced by ECRUU

 

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Commodity Conversations Weekly Press Summary

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

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

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

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

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

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

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

This summary was produced by ECRUU

 

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