As the US-China trade war continues to escalate, the US farm sector is increasingly worried that global trade patterns are dramatically evolving in a way that will not be reversible in the short term. Cost is only one factor behind the trade landscape, as relationships and reliability also play a major role, according to the Farmers for Free Trade group. The uncertainty around US policy is allowing competitors from Brazil, Ukraine, or Argentina, to dismantle some of long term partnership the US industry spent years building, they added.
In Europe, farmers are focusing on the bad weather, as the UK is set to witness a 5% increase in food prices because of damaged crops – this would translate to an increase of USD 8 per month for each household. The farm price of vegetables and dairy has already shot up, with meat and wheat expected to follow suit. Similarly, hailstorms in France have destroyed a significant amount of wine.
On the other hand, global food prices are likely to be stable over the next decade due to the tepid growth in demand, according to a report by the UN and OECD. Agribusinesses will take a hit, the report warns, as Chinese food consumption decreases because of an ageing population and a contracting economy. While regions like India and Africa will provide the volumes, the US and other developed markets will look for quality. Africa will help balance the consumption of processed foods and sugar as developed nations move towards healthier options.
Meanwhile, Cargill is trialling genetically-modified (GM) canola in Montana which it hopes will dramatically change the salmon and fish protein industry. Designed to yield more oil rich omega-3 fatty acid, this GM canola could replace the wild fish which is fed to salmon farms amid a falling ocean population. This is part of the group’s efforts to become the leader in aquaculture feed, according to a company official who said: “This is very much the new Cargill.”
In Brazil, Cargill announced a plan to build a USD 150 million plant to manufacture a food texturizer called HM pectin made from citrus fruit. The pectin, which is used in things like juices and jams, would add a high-margin product to the company’s portfolio at a time of low crop prices. Cargill is also reportedly looking at buying two struggling grains processing plants.
Bunge, the Santander Bank and The Nature Conservancy got together to design a program which gives loans to soybean farmers who commit not to clear forest or native vegetation in the Brazilian Cerrado. Most of the 9.6 million ha of land which came under soybean cultivation in the 2001-17 period in the Cerrado was previously native. Bunge also helped launch Agroideal.org last year which to help grow soybean in a sustainable way.
Olam is planning to increase its cocoa beans output in Ghana as well as to go further downstream into tertiary processing. Olam has become the country’s third biggest buyer of cocoa beans, having purchased 22% of the whole production in 2016/17.
Going from cocoa to coffee, Nestle and Starbucks have signed a USD 7.15 billion licensing deal which allows Nestle to sell Starbucks products all over the world. Both companies will work together and use their complementary advantages – coffee retailing on one side and single-serve home-based coffee machines on the other – to strengthen their position in the coffee market.
In Japan, meanwhile, Nestle is planning to turn its nutritional drinks and supplements segment into – literally – a billion dollar business after it witnessed the growing popularity of its subscription-based nutrition program. The program uses artificial intelligence to analyse people’s meals, DNA and blood sample to work out which supplements they need. Both moves are part of the company’s intention to move towards healthier products.
In Malaysia, the research centre Crops for the Future (CFF) has been promoting some of the 7,000 indigenous crops, such as spindly moringa trees, bambara groundnuts and the kedondong berry, as alternatives to wheat, maize, rice and soybean which provide two-thirds of the world’s food supply. The company is trying to change the approach towards food by diversifying diets while enabling farmers to measure crops in terms of nutrition rather than yield.
Wired’s cover story this week dives into how Maersk, who controls one-fifth of the world’s shipping capacity, was completely paralysed by a Russian-made virus originally made to destabilise Ukraine in June 2017. The virus ended up costing Maersk USD 300 million, and was only fixed thanks to a power cut in Ghana which shielded a single computer from the infection.
This summary was produced by ECRUU
