The Presidents of Brazil and the US met this week to discuss the possibility of signing new trade deals, although experts noted that the trade between the two countries was already well-balanced. The US wants to expand ethanol exports but Brazil said it would only consider the move if it can export more sugar to the US, and few expect either side will make significant concessions.
The Brazilian President did mention the possibility of expanding trade relations with China. Having already invested USD 2 billion in Brazil’s agriculture, China is now interested in investing in the ethanol sector as the country prepares to meet its 2020 ethanol mandate. China absorbed 36% of Brazil’s agricultural exports and spent some USD 35 billion to buy Brazilian agricultural products in 2018, up 33% on year.
The EU and the US hit a roadblock during talks on a new trade agreement as the EU does not want to include agriculture. The EU did offer concessions, such as giving the US a share of its duty-free import quota of hormone-free beef, in an attempt to convince the White House to remove anti-dumping duties. Previous concessions included buying more soybean or classifying US soy as a sustainable biofuel feedstock. Australia and Uruguay – who took advantage of the beef quota when it was first opened in 2009 – could challenge this latest move at the WTO.
The US-China trade war was expected to have a long term impact on global agricultural tradeflows but the spread of the African swine fever outbreak in China could now counteract some of these changes. The crisis is helping US pig farmers as China imported huge amounts of pork over the past two weeks despite the 62% tariff recently imposed. However, the US is being very careful to protect its pig population from the virus and the USDA recently seized 450mt of contraband pork products from China, the largest seizure of contraband food in US history.
An expert suggested that the outbreak will continue to lower Chinese demand for soybean for years as feed demand will drop, although US soybean could be diverted to feed the pigs exported to China. Nonetheless, US soybean area will stay almost constant this year as farmers have no viable alternative – other grains such as sorghum and corn are also subject to Chinese duties. Farmers also hope the government will resolve the trade dispute or offer another aid package.
In Japan, Nestle announced that it will expand its range of KitKat ruby chocolates after a successful launch in 2018. Ruby chocolate was developed by Barry Callebaut and is supposed to be the fourth kind of chocolate – after dark, milk and white chocolate. The firm said it had been surprised by the speed and scale of social media reactions, which was more efficient than any marketing campaign. It added that chocolate trends were now made in Asia, as Asian tends to be more open to new foods. In the US, the biggest chocolate market, ruby chocolate still has not received government approval. Specialty ingredients makers, such as Denmark’s probiotic and enzyme maker Chr Hansen Holding and England’s Tate & Lyle, which makes non-sugar sweeteners and texturizers, are also expected to benefit from these new consumer trends.
ADM announced that it has agreed to purchase one of the biggest citrus ingredient maker in Europe, Ziegler Group. The firm recently purchased another citrus firm, Florida Chemicals, and highlighted that it was positioning itself to be a leader in the fast-growing citrus flavour sector.
Euromonitor warned that image recognition might start to drop as consumers switch to healthier food. For the moment, however, packaged foods remain very popular. Some 41 out of Euromonitor’s Top 100 Megabrands in 2019 were packaged food items, with Coca-Cola, Pepsi, Nescafe and Lay’s taking the first four positions of most valuable brands. An unexpected brand, Google, is making a foray into the food world by promoting Refresh, a working group it founded to promote artificial intelligence and machine learning in agriculture.
We know that the food we eat has a huge influence on our lives, but researchers are now saying that food might even change the way we speak. The birth of agriculture meant farmers could make softer food – think cheese and porridge – which affected the shape of our teeth and jaws, according to this new paper. As a result, people were better able to make the ‘f’ and ‘v’ sounds which started to spread along with agriculture.
This summary was produced by ECRUU
