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
