Cargill’s net income grew to over USD 1 billion in the Jun-Aug (Q1) quarter, up 5% from USD 973 million in the same quarter last year. The company reported good results in the oilseed and beef segments which helped compensate for losses in the sweeteners and starch businesses. The CEO said Cargill would consider making an unusually big acquisition if it allowed the group to grow in the probiotics and prebiotics market. He argued this was a high-value-added segment which was poised to grow with the increasing demand from health-conscious consumers for alternative proteins, especially plant-based meat. With fish consumption also on the rise and limited fishmeal supply, Cargill said it is focusing on improving the quality of feed for fish farming. An aquaculture expert from the group said the quality standard had already improved drastically, adding that “This is our bread and butter.
Cargill is reportedly bidding against Wilmar, among other groups, to buy the assets of Ivory Coast’s bankrupt cocoa exporter SAF-Cacao. In Cameroon, meanwhile, Cargill and Telcar Cocoa paid CFA 2.2 billion (USD 3.8 million) in premiums to cocoa farmers this year based on a CFA 50/kg (USD 0.08/kg) premium for certified cocoa. The companies, which have been conducting training programs to help farmers boost production, said this would go a long way to improving their livelihoods.
Having just secured a USD 1.425 billion revolving credit facility (RCF) to refinance its existing debt, Olam is said to be considering buying North America’s top independent cocoa processor Blommer Chocolate. Olam, which the world’s third-biggest cocoa processor, already supplies cocoa to Blommer and both companies work together on sourcing sustainable cocoa in Ivory Coast and Indonesia. In Gabon, Olam said it had doubled its palm oil production in the first half of 2018 after two plantations were revived. Meanwhile, Cosumar, along with Wilmar, announced it would build Africa’s first vegetable fat factory in Casablanca, Morocco. Expected to be commissioned in 2020, the plant will focus on exporting to the Middle East and the rest of Africa.
September saw the US’ first edition of the National Palm Done Right (PDR) Month, the aim of which was to “Celebrate the Positive Side of Palm Oil.” As part of efforts to reduce deforestation, Nestle will be able to monitor all of its palm oil supply chain by the end of the year thanks to a new satellite technology designed by Airbus and TFT. With this, the group says it will be able to spot deforestation as soon as it starts. Nestle hopes to source all of its palm oil sustainably by 2020, from 58% in 2017. Cargill pointed out that the hardest was traceability all the way to the plantation. As of the end of 2017, the group reached 96% traceability to the mill and 55% to the plantation.
The US-Mexico-Canada Agreement (USMCA) will replace NAFTA following an agreement reached by the three countries on September 30. The updated treaty still has to be approved by each country’s legislature, which could take months, while most provisions are not due to take effect until 2020. An analysis, meanwhile, suggested that the new treaty is a reworked version of the previous administration’s Trans-Pacific Partnership (TPP). And while announcing the new treaty, the US President set his sight on two new targets: the protectionist trade policies of India and Brazil, which he called the “toughest” on earth.
Trade relations with China, on the other hand, have not improved which is worrying US soybean producers who are starting their harvest and expect a huge crop. The head of Bunge said producers will start storing as much soybean as they can, possibly even in ground piles, although the move holds some risk as the trade war could go on for a long time. The USDA confirmed the report and revealed that soybean inventories reached their highest level in 11 years on September 1. The Bunge CEO also echoed the view of other large food processors and warned that trade flows might be permanently altered. The Buenos Aires Grain Exchange, for example, predict that Argentina will quadruple its export of raw oilseed next year.
Meanwhile, the WTO has urged the US and China to resolve their trade issues, as it lowered its global trade growth estimate from 4.4% to 3.9% for 2018, and from 3.7% to 3% for 2019, due to the ongoing trade war. The US is reportedly blocking the appointment of new judges to fill vacancies at the WTO’s Dispute Settlement Body (DSB), while the US ambassador previously described the Appellate Body as a rogue organisation. Of the seven posts at the DSB, three are currently vacant and a fourth vacancy will be created when a Mauritius judge completes his term at the end of the month, leaving the appellate tribunal with the minimum strength of just three judges and potentially crippling the trade body. A former WTO chief trade judge urged countries to unite against the US which he said was acting like a “bully.”
