Following the group’s decision to close their sugar trading desk, Bunge is in talks with various trade houses to sell all of its Brazilian sugar production this season. The VP for Bunge South America explained that, previously, 70% of its output was marketed by other tradehouses while the remaining 30% went to its own trading desk. The announcement follows news last week that Bunge will delay the initial public offering (IPO) of its Brazilian operations. Some even say that the IPO could be canceled after recent rumours that the Brazilian government was looking into subsidising fuel again, making ethanol less competitive.
Trade houses are having a difficult time with increasing regulations – MiFID II in Europe – and the trade war between US and China which could lead to defaults. An analysis by Bloomberg argues that companies like Cargill and ADM are expected to be hurt given that a major part of US export to China are crops and food products. On the other hand, a consultant argued that the disruptions would create trading opportunities. He added, however, that risks are bigger because of the huge volumes involved as trade houses have had to scale up in order to become more competitive amid thin margins. Cargill has been voicing its support to global trade in Washington DC last week, asking people to fight to protect global trade which it argues helps equality and the environment.
This week, Cargill published its first corporate responsibility report for its ocean transportation business in which it announced a commitment to reduce its CO2 emissions by 15% by 2020. It already reduced emissions by 5.7% in 2017. The company charters some 650 dry bulk and tanker vessels every year, making it one of the biggest bulk vessel operator in the world. The head of Ocean Transportation also explained that food and beverage companies were increasingly looking at the whole agricultural supply chain, and not just production at the farm level. “The biggest driver, in the end, is the consumer,” he said.
In Belgium, Cargill will invest in liquid chocolate production at its chocolate plant. The company said that demand for premium chocolate was growing fast and that consumers wanted non-GMO, organic and sugar-free products.
On the other hand, a judge in the US has allowed six plaintiffs to sue Cargill and Nestle for child labour slavery, a 6-year old case in which six cocoa workers say they were captured from Mali as children and forced to work on Ivory Coast cocoa plantations. Both Nestle and Cargill denied the case, saying they were fighting hard against slave labour in their supply chain.
The Mars company, meanwhile, won against a class action which tried to force them to warn on chocolate product labels that child slave labour may have been used in the cocoa picking process. The California court ruled that disclosure could only be forced if the quality of the product was affected.
Nestle is working with XPO Logistics on a state-of-the-art warehouse in the UK. Referred to as the “digital warehouse of the future,” the distribution centre will use advanced automation, artificial intelligence and predictive data, among other things, to be as fast and efficient in its distribution as possible. It will also have environmentally friendly features such as rainwater harvesting.
McDonald’s has committed to replacing the 1.8 million plastic straws it uses every day in the UK with the paper version. The company said customers had pushed for the change in part after programs such as the BBC’s Blue Planet II series highlighted the situation in oceans. Paper straws cost 50% more than the plastic ones but McDonald’s hopes to more than offset the additional cost through positive public perception, the company said.
This comes at a time when the UK has been looking for other countries to export its plastic waste after China started restricting the import of waste at the beginning of the year. Environmentalists point out that the waste is instead being exported to Malaysia, Vietnam and Thailand which are among the biggest ocean polluters in the world. The investigation, which was carried out by Greenpeace, also warned that these countries too are starting to put curbs on the import of plastic waste which means that the UK will have to reduce waste “at the source.”
Finally, you probably didn’t see it coming but Coca-Cola has tied up with Korean company The Face Shop to launch its first makeup collection. The items are packaged in Coca Cola’s signature red and smell like the drink. You can buy your very own here.
This summary prepared by ECRUU
