Cargill is looking at investing USD 212 million to build a new river port terminal in Brazil’s Para state which could handle 6 million mt of grains via barges from Mato Grosso. If the project goes ahead, the port could be operational by 2022-25.
The company continues to bank on growing meat demand in Asia and has opened its first animal nutrition premix plant in the Philippines at a cost of USD 12 million. Cargill is also investing USD 15 million to start manufacturing piglet feed products at its premix and nutrition plant in Tianjin, China. The new production line will use a traceable barcode management system as part of the group’s wider sustainability and traceability goals.
Cargill has said it would stop buying palm oil from Guatemalan producer Reforestadora de Palmas del Peten (Repsa) until it meets their sustainable oil policy. Cargill explained it had asked Repsa to make some changes following complaints by environmental NGOs in the middle of 2017, but that these demands had yet to be met. The International Forests Program for Friends of the Earth said the move will send a strong message to the industry, and that other companies which also buy from Repsa, such as Wilmar, could follow suit.
This is not all that surprising given that in the US, a survey by Nielsen showed that 45% of consumers are more inclined towards buying a product from a brand committed to being sustainable and environmentally friendly. Not only that, but 66% of consumers will pay a premium for what they consider to be a sustainable brand, a share of the population which will continue to increase given that 73% of the millennial generation is willing to pay extra.
Similarly, the US meat industry is witnessing a structural shift, with the sales of fresh grass-fed beef rising to USD 272 million in 2016, up from USD 17 million in 2012, while the sales of ‘traditional’ beef are falling. This is because more and more consumers prefer healthier, environment-friendly and grass-fed meat.
Louis Dreyfus – which ships some 81 million mt of agriculture products annually – has joined the Sustainable Shipping Initiative (SSI). Dreyfus’ head of freight said the move was part of the group’s intention to have more sustainable shipping operations.
The newly launched CME Black Sea wheat cash-settled swap contract traded for the first time last week. One of the counter-parties, Swiss-based trading company, Solaris Commodities S.A., welcomed the contract saying it was the best derivative option available for participants involved in the Black Sea market as the correlation is better than futures contracts such as Matif or CBOT
Thai sugar producer Mitr Phol will shell out USD 100 million to buy a 50% stake in Olam’s Indonesia-based Far East Agri. The aim is to set up a sugar mill in East Java by 2020 which will process 1.2 million mt sugarcane in a bid to help reduce the domestic supply deficit.
Still in the sugar market, Brazil’s Centre South could lose between 9 and 20 million mt of sugarcane processing capacity in 2018/19 due to producers idling capacity. Producers are struggling financially, and unable to invest in fields and mill modernisation, making it necessary to reduce operating costs and run more efficiently.
Unilever has agreed to sell its margarine business – which includes brands like Rama, Flora and Blue Band – to the US-based private equity firm KKR for EUR 6.8 billion (USD 8 billion). The deal is expected to be completed by mid-2018 and is a part of efforts to restructure the business.
In the US, Dunn’s River Brands, a drinks portfolio management firm of Texas-based PE Fireman Capital Partners, will buy for an undisclosed amount two of Nestle Waters’ ready-to-drink iced tea brands. One of the founders of Dunn’s River Brands said the company will add more brands to its portfolio in next 90-120 days.
Food companies are increasingly using Blockchain technology to identify fake ingredients and track the cause of contamination in recalled products. The technology will also reduce fraud and eventually lower the costs related to documentation, which currently are estimated at 7% of the USD 16 trillion worth of raw materials traded every year.
Finally, if you are planning to celebrate the New Year with seafood, recent research from Norway found that mussels in the Arctic waters contained even more microplastics that mussels in coastal waters. All the mussels tested had microplastics, a strong indicator of the worsening pollution levels in the sea where an estimated 8 million mt of plastic ends up every year. However, scientists say that our exposure to microplastics is probably higher when wearing a fleece jacket or playing with a toy, than by eating seafood.
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