Commodity Conversations Weekly Press Summary

Wilmar announced it stopped sourcing palm oil from Indonesia’s Gama. Greenpeace had earlier called on the tradehouse to break ties with the producer saying that it was clearing rainforest and violating Wilmar’s No Deforestation, No Peat, No Exploitation policy. Greenpeace had pointed out that Gama was started by members of the family which owns Wilmar. The latter said, however, that it did not have any decision making power on Gama. In Nigeria, Wilmar entered into a joint venture with palm oil plantation PZ Cusson to set up a mill and oil palm plantations. The group also launched a Pilot Out growers Scheme to help farmers grow sustainable oil palm.

A recent report by the International Union for Conservation of Nature found that, in terms of deforestation, there was little difference between the oil palm plantations there were sustainably certified and those that were not. One expert admitted that the concept was still new and therefore would take longer to make a significant impact. He argued, however, that it needed more support from consumers. The report also warned that replacing palm oil with another source of vegetable oil would not help. Palm is the most efficient oil-producing plant. Any alternative would require much more land – and therefore potential deforestation – to produce the same amount of oil.

In a bid to reduce the waste of fresh fruit and vegetables – which make up 40% of all wasted food in the US – a startup called Apeel has found a way to double the shelf life of avocados with a plant-based film that strengthens the fruit’s skin. The technology could replace the wax that producers currently use. It won’t even cost more because the shops will save by reducing waste.

After testing blockchain for a year, a group of 11 companies including Walmart and Nestle have launched the Food Trust consortium. Using the technology across their supply chain, Food Trust should help them identify issues with food and be more efficient at recalling contaminated foods. Walmart’s vice president called it the “FedEx tracking for food.”

Danone’s investment fund plans to invest in 20 to 25 food startups by 2020 with a focus on the health sector and alternatives to animal protein. The managing director explained that the new companies would help them capture the fast changing consumer tastes – something difficult to do for a group their size. The fund will also look to invest in subscription-based business models and home delivery. The announcement comes at a time when France Danone is facing issues with its Moroccan operations where it lost over half of its fresh milk market share following a consumer boycott. To change consumer perception the company said it was considering selling milk at the cost of production without making a profit.

In the US, Cargill has been facing protests from animal activists demonstrating in front of its plant in High River asking the company not to kill cattle. Similarly, butchers in France have had to ask for the government’s help against militant vegans who have attacked meat shops and caused a slump in meat sales. Food companies are also thinking about changing the terminology on packages and getting rid of words like “steak”, “fillet” and “sausage” for non-meat products even though less than 3% of the population is vegetarian.

The UK is facing a CO2 shortage which is affecting the delivery of frozen foods, the meat industry (animals are killed with carbon dioxide guns) and the supply of the fizz in carbonated drinks. Coca-Cola even had to stop one of its production lines as a result. The shortage is mainly due to seasonal factory maintenance. However, increasing natural gas prices and falling world ammonia prices have encouraged the local fertiliser industry to import ammonia, in turn affecting the output of CO2 which is a by-product of the fertiliser industry.

At a time when there is increasing pressure to curb pesticides use – with the EU recently banning neonicotinoids use and granting glyphosate a shorter renewal period – Syngenta‘s CEO warned that the world was running the risk of facing food shortages within 20 years if pesticides and GM crops were banned. He argued that agricultural technologies were essential to increasing food output from less land and to tackle climate change. However, last year the UN argued it was a myth that the world needed pesticides to be fed.

Finally, a shared-production model called Community Supported Agriculture in which local residents fund organic farmers and give inputs in food production is becoming increasingly popular in Brazil. Consumers pay a farmer on a monthly basis to produce seasonal vegetables and fruits and in the event of a crop failure, they share the costs.

This summary was produced by ECRUU

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