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Bunge saw a loss of USD 29 million in the Jan-Mar (Q1) quarter, down from earnings of USD 39 million in the same period last year. However, the company explained that a big part of the losses was due to an increase in forward soybean crushing margins, which means losses should be offset later in the year once the contracts are executed. As a result, it increased the forecast for operating profits this year to between USD 800,000 million and USD 1 billion, compared to USD 550,000-700,000 previously forecast.

On the other hand, losses in the sugar segment increased to USD 24 million mt in Q1, up 40% on year as low sugar prices could not offset the higher ethanol values. Bunge reduced its full-year forecast for operating profits from USD 50-70 million to USD 40-60 million for the sugar division as a result. The company said that it is planning to file for an IPO of its Brazilian sugar mills in May, adding that mills have assured debt financing and can now operate independently. The company had spent over USD 1 billion in its acquisition of the sugar mill operator Moema in 2010.

ADM announced a 16% jump in its profit for Q1 due to better margins and higher soybeans processing volumes in North and South America. However, it is anticipating a USD 30 million negative impact in its Q2 results due to China’s anti-dumping tariffs on sorghum. In combination with DuPont, the group opened a pilot facility in Illinois, US, to make bio-based plastic from corn-based fructose which aims to cut plastic in soda bottles by 25%.

US-based POET dislodged ADM as the world’s top ethanol producer. Previously, both companies had an annual capacity of 1.8 billion gal, which POET expanded to 1.9 billion gal, with a goal of 2 billion gal by 2019, while ADM reduced it to 1.6 billion gal.

The Commodity Futures Trading Commission (CFTC) has fined Glencore Agriculture and Glencore Ltd USD 2 million for breaking trading rules between January 2013 and November 2015. These included breaching speculative position caps and illegal wash deals.

Mondelez International’s profit and sales in Q1 exceeded market expectation due to a strong showing in Europe and emerging markets.

EU members have voted in favour of a near-total ban on the use of neonicotinoids following studies that found its use posed a threat to bees and other pollinators. The sugar beet industry warned this would have a significant impact on yields as there are no alternatives, adding that it threatened the future of the industry.

The head of Unilever said the efforts to source palm oil sustainably were not working well enough, as he noted that deforestation accelerated significantly in 2016. He called on the G7 and G20 to include the topic of food security and sustainability in their agendas. Meanwhile, Greenpeace International has accused Indonesia’s Megakarya Jaya Raya, which supplies palm oil to Nestle, Mars, Pepsi and Unilever, of destroying over 4,000ha of rainforests in the Papua region between May 2015 and April 2017.

UK-based supermarket chain Iceland decided to stop buying products containing palm oil from the end of 2018, saying its production encourages deforestation. The palm oil industry warned, however, that palm cultivation needs less land than other oils.

Leading retailers and food firms such as Walmart, Nestle and Kellogg last week joined a new drive that aims at creating more environmentally and socially responsible global supply chains and ensuring that bonded labour is not used. The Consumer Goods Forum, consisting of around 400 food retailers and manufacturers across 70 countries, is setting up a benchmark auditing and certification system to avoid duplication in audit and promote sustainable sourcing.

Similarly, food industry stakeholders and supermarkets in the UK including Unilever, Nestle and Pepsi will do away with non-essential single-use plastics by 2025 and make sure that the rest of the packaging is recyclable, degradable and reusable as a part of the government’s Plastics Pact. They will also ensure recycling of a minimum of 70% of plastic packaging compared to around 33% now, and use  plastic packaging with an average of 30% recycled content.

In the US, the Illinois House of Representatives passed legislation that seeks to permit farm zones in cities deficient in fresh food items. The bill, which will now go to the Senate, also seeks to create a fund from the sales tax proceeds of such farm produce to finance social programmes.

More and more start-ups are looking at plants to replace animal products, such as eggs, milk, cheese and meat, to lower the carbon impact of agricultural productions. Taste, however, is particularly hard to perfectly reproduce and the race is now moving to finding a cheap way to make lab meat. Following the success of Maastricht University who made the first cultured meat in 2013, Cargill is backing Memphis Meats’ effort to make beef, chicken and duck in labs. Nonetheless, making food in laboratories goes against the move to eat more natural and local ingredients, and a former consultant for Monsanto warned that the burgeoning industry needs to manage its image carefully.

This summary produced by ECRUU

Louis Dreyfus announced it has reorganised its top management team to include eight new members, including the head of finance, a Group COO and a strategy chief. It said the new team will focus on its Brazilian sugar company Biosev, which underwent a USD 1.45 billion recapitalisation in 2017, and on China’s soybeans market, which is exhibiting a higher feed demand. It also clustered its grains and oilseeds segments with its finance and freight divisions.

Cargill has leased its port-based sunflower processing unit in Quequen, on Argentina’s Atlantic Coast, to Renova, the joint venture between Glencore and Vicentin, for a year. Cargill has been struggling with workers protests which have affected soybean crushing and exports from Argentina. The situation has created concern that the company may not be able to export as much soybean as a result.

In the US, meanwhile, Cargill has donated USD 150,000 to set up a poultry research centre at the University of Arkansas. The facility will focus on developing alternatives to antibiotics, including probiotics, prebiotics and other nutraceutical-type products. Similarly, ADM is tying up with a Chinese group to open a lab in California that will focus on developing feed and enzymes to improve animal health and nutrition. ADM explained that adding enzymes to swine and poultry diets, for instance, helped their digestion, improved their wellbeing and reduced their carbon footprint.

Canada’s Walmart has officially committed to being waste free by 2025 by becoming more efficient, discounting food about to go off as well as by donating through local food banks. The group will also give USD 15 million to help find solutions to reduce wastage along the supply chain.

UK-based company AB Sugar has pledged to use all recyclable and biodegradable plastic packaging and reduce its carbon footprint by 30% by 2030, according to its first sustainability report. The company will also cut down water usage by 30% in association with its 25,000 producers.

In China, Nestle will sell 67 more items on Alibaba’s Tmall in an effort to grab a larger share of online sales. A company official forecast the Chinese online market will become bigger than Europe and the US combined in 2018. Meanwhile, Nestle is set to lose its KitKat four fingers patent case to Mondelez which would open the gates for other European candy producers to make similarly shaped items. Sources say the European Court is likely to agree with the attorney general’s findings that the shape is not distinctive enough to give Nestle its sole ownership.

US citizens throw away a total of 150,000mt of food per day. The USDA study found that the Americans with healthier diets consuming fruits and vegetables wasted the most followed by dairy and meat consumers. Discarded food translates into an annual waste of 30 million acres of land, 354,000mt of pesticide and 4.2 trillion gal of irrigated water, besides choking landfills and increasing methane release.

A campaign by the Eating Better coalition, consisting of 50 civil society groups, has drafted eight principles to guide consumers on making healthier choices on meat and dairy products and lessen the damage they inflict on the environment. The group recommends buying meat in smaller quantities to reduce waste and improve health. It advises lowering consumption of intensively reared animals like chickens and pigs in which there is antibiotic overuse. The coalition also demanded better labelling of foods.

In an era when 10 companies own 75% of global seeds trade and 94% of the vegetable seed varieties have been lost, Open Source Seeds (OSS) is trying to promote the common ownership of seeds. So far, however, it is struggling to win over plant breeders and has licensed only 3 varieties each of tomato and wheat. The group argues that having diverse crop varieties will come in handy at a time when climate change is a challenge. It added that having an open-source market will ensure continued development and breeding of multiple varieties of each seed.

On a more artistic note, click here to see the best contendants for the Food Photographer of the Year.

This report was prepared by ECRUU

Cargill is planning to invest USD 118 million in Brazil in 2018 in developing waterways and rail transport as an alternative to trucks, and its Santos Port terminal. Cargill already acquired the remaining stake in the Cevasa sugar and ethanol mill and, with SJC Bioenergia, is banking on the booming corn-to-ethanol business. The head of the Brazilian operations said that regardless of the uncertainties brought by the elections Brazil will continue to be a major global food producer, adding that the challenge lies in bringing these crops to port.

Wilmar and the India-based group Adani via their joint venture Bangladesh Edible Oil Ltd (BEOL) are planning to spend USD 350 million to build an agro-based foods and allied products industrial park in Bangladesh. BEOL said the popularity of its edible oil was encouraging the investment.

Olam has announced the launch of AtSource, a technological solution for a sustainable agricultural supply chain which allows customers to see the social and environmental footprint of a commodity. The dashboard will start by showing the supply chain for West African cocoa and cashew, as well as Brazilian and Vietnamese coffee, among others. It’s target is for all of its products to be on AtSource by 2025.

Similarly, Hershey has launched Cocoa For Good, a USD 500 million initiative to help cocoa farmers improve their livelihoods as well as promote sustainable farming practices as the company aims for all of its cocoa to come from certified sustainable sources by 2020. The company is working with Sourcemap to make its supply chain more transparent.

The exiting head of Sucden’s cocoa trading desk, who has been in the business for 50 years, is arguing that the drive to grow sustainable cocoa is keeping farmers poor. He explained that the system allowed the various companies involved – including NGOs – to cash in on sustainability practices but that West African cocoa farmers are probably poorer today than they were before.

In Brazil, conservation groups have offered USD 5 million in grants to help turn deforested and degraded Amazon land into 1,700sq km of cocoa tree plantations. Cocoa trees are financially more interesting than using the land for cattle ranching, which faces additional rules designed to curb further expansion into the forest. Brazil’s Cocoa Processing Industry expects production to double to 400,000mt/year by 2028, which would increase global production by 5%.

China’s high birth rate and rising middle class allowed Danone to increase its sale of baby formula, dairy products and water brands in the country. In Europe, on the other hand, sales of dairy products during the first three months of the year were 0.3% lower than last year as the firm is trying to adapt to changing tastes and slow demand growth.

Nestle reportedly made some progress over a dispute with AgeCore, which represents six retailers in Europe, which started in September last year over supply terms. AgeCore, whose membership includes Switzerland’s Coop and Germany’s Edeka, has been encouraging its retailers to boycott Nestle products. And in the US, Nestle Waters has abandoned a plan to build a bottling plant in Pennsylvania, although it might look for alternative sites. Food & Water Watch welcomed the news and highlighted the strong opposition the project had faced.

In the UK, the dairy and meat industries – with the support of NGOs such as the animal rights group RSPCA – are trying to change the name of “veal” to “rosé beef” in an attempt to convince more people to eat veal; this could give an outlet for male calves that are otherwise killed at birth. The Guardian found that as many as 95,000 calves are killed at birth as it is cheaper to kill them than to keep them alive.

In the US, cell-cultured meat – so-called clean meat – is causing regulatory confusion. The US beef industry is divided between those who say it should count as meat as it comes from a stem cell and those who argue that it is technically a food additive. Whether it is the former or the latter could impact the definition of “meat” as we know it. It is also unclear which government body should take the call. Some say it falls under the US Department of Agriculture (USDA), others argue it’s in the Food and Drug Administration (FDA) department and others still say that only Congress can take the call.

A recent study looking at – and grading – how supermarkets in the US work to reduce food waste found that none of the major groups managed to score an A. The company that fared best was Walmart thanks to policies like clearer labeling which distinguish between “Best if Used By” and “Use By” dates, among others. The study found that part of the problem was that the supermarkets are not disclosing data, making it hard to assess how much is actually being wasted, and therefore making it harder to find solutions.

The European Commission has allowed member states to declare dual standard food as illegal, after Central and Eastern European countries complained that multinational firms were selling lower quality food in their countries despite identical packaging. For example, eastern countries complained that animal fat was often substituted with vegetable fat and sugar was substituted with artificial sweeteners or corn syrup. In response, food producers had argued that these differences were designed to suit local tastes.

Finally this week, a new book, called The Food Explorer, tells the unusual tale of an American botanist and explorer, who at the age of 22 founded the USDA’s Section of Foreign Seed and Plant Introduction. Over 37 years of travel, David Fairchild travelled to more than 50 countries to bring back new or better fruits and vegetables, such as mangos, quinoa, dates, cotton or soybeans. He even befriended Bavarian beer makers to bring back some of their high quality hops. Kazakhstan gave him apples, New Guinea gave him bananas and China oranges and lemons: The food we eat is indeed the product of a globalised world.

This report was produced by ECRUU

Cargill reported a 24% decline in net profit to USD 495 million for the Dec-Feb (Q3) quarter, mostly due to a USD 161 million adjustment cost to comply with the new US tax law. The firm said profit would have been up 1% without the tax change, while sales increased by 2% on year to USD 28 billion. The biggest growth contributor was its animal nutrition and protein segment, followed by the food ingredients unit, although it was impacted by low ethanol prices in North America and high manufacturing costs in its European sweetener and starch business.

Cargill is investing USD 20 million to double egg processing capacity at its Minnesota plant. The company explained that Americans seemed to increasingly prefer eating out for breakfast, instead of lunch or dinner as it used to be the case. The company already spent USD 900 million in its North American protein business in the last two years to meet the growing demand for animal protein which it attributed to a growing middle class.

Cargill said India  was an important growth market for the group and hopes to turn the country into an export base for products like corn. However, the company’s CEO for the Asia-Pacific region said India must first promote free trade and adopt technology such as GM seeds to meet its target of doubling the income of farmers.

Olam reported a post-tax profit of USD 551.65 million in 2017, up from USD 339.10 million in 2016. The COO attributed the increase to improved efficiency as it invested to make its supply chain more digital. The company foresees important changes in people’s eating habits, including a move towards ethical eating which requires increasing traceability. With this goal in mind, it will be implementing a Living Landscapes Policy at its farms and its network of third-party suppliers, which include around 4 million small and big farmers. The policy is designed to attend to ecological and social problems which affect its agricultural supply chain.

Louis Dreyfus announced a USD 50,000 grant to World Coffee Research to work on areas such as low yields, impediments in improving quality and impact of climate change on the commodity. An LDC official said the grant is part of its sustainability efforts to achieve positive and long-term impacts on the coffee value chain.

Meanwhile, Netafim Mercosul, a Brazilian irrigation company that allows farmers to buy their irrigation systems against some of their production, has seen an 116% increase in coffee irrigation projects in 2017. The company also saw revenues grow by 109% as more farmers, struggling to get bank financing, turn to this barter system.

ADM Arkady, ADM’s UK feed distribution arm, has entered into a long-term deal with the Peel Ports Group which will develop its Glasgow port facilities with a view to improving the handling of animal feed shipments. The managing director said the deal was aimed at combining regional feed shipments and improving supplies to the north of England and Scotland markets.

The UK’s grain trading market is likely to see consolidation soon as small and regional grain traders struggle to stay profitable amid falling margins. Several groups have already exited grain trading in the past year. A Dalmark group director argued that the entry cost was too low while high volatility and reduced crop volumes have pushed up expenses and lowered margins.

Brazil-based Marfrig Global Foods will acquire 51% stake in Kansas-based National Beef Packing Company for USD 969 million to become the world’s second-largest meat producer. The Kansas-based National Beef is the fourth largest beef processor in the US.

The UK launched its sugar tax last week. The government is apparently already considering bringing other products, such as added-sugar flavoured milk drinks under the tax to tackle obesity. Food manufacturers and bakers have voluntarily agreed to lower sugar content in cakes, biscuits and cereals by 20% in the next four years. On the other hand, Coca-Cola launched a marketing campaign for its original Coke highlighting the fact that the recipe hasn’t changed – which means the price has gone up due to the tax.  

Coca-Cola India will launch its first sugar-free drink in India to meet changing consumer tastes. An official explained that people in cities were increasingly concerned about their health, adding that the sugar-free beverage segment was growing fast. In the same vein, Nestle will spend USD 27 million on modernising its prepared foods and noodle-based soups plant in Ukraine. The modernisation plan, which would be completed by 2021, aims at reformulating recipes to reduce fat content in line with WHO’s dietary recommendations.

Nestle also announced a target to only have recyclable or reusable packaging by 2025. Some NGOs complained, however, that the announcement amounted to “greenwashing” given the lack of clear quantitative targets. The company CEO admitted that “plastic waste is one of the biggest sustainability issues the world is facing today” but that the company’s ability to deal with that problem also depended on each country’s recycling infrastructure.

Similarly, Unilever has joined hands with the world’s top PET resin maker Indorama Ventures and a Dutch start-up Ioniqa to develop a technology that transforms PET waste into new food packaging material – a technology that could revolutionise food packaging and reduce waste. The technology has cleared the pilot testing phase and will now be tested at an industrial scale.

Finally, the not-for-profit advisory firm Ceres has said that not enough food companies are committed to end deforestation. It found that less than 50% of the 469 food manufacturers that have deforestation commitments in 2018 have made official plans to improve traceability across their palm oil supply chain, and less than 20% plan to make it completely transparent – the way Nestle and Unilever have done.

This report was produced by ECRUU

Louis Dreyfus has finalised the acquisition of Chinese oilseed crushing business Sinarmas Natural Resources Foodstuff Technology and its plant in the port of Tianjin. The CEO said it was part of the strategy to focus on China and its growing domestic demand. 

ADM has been going through several waves of restructuring – the latest announced last month – as it tries to cope with a changing and more competitive environment. Meanwhile ADM’s office in Germany is facing a routine audit which may force the company to pay higher taxes. 

Bunge is having difficulty in selling its sugar trading unit with potential buyers finding the USD 75 million targeted value too high. Nordzucker and Wilmar have reportedly looked at the business. This lack of interest may make it harder for Bunge to sell its sugar milling segment, which could be valued at USD 1-2 billion.

Cargill will switch to a controlled-atmospheric stunning (CAS) system at its chicken processing facility in Ontario instead of electric stunning. The company explained this was part of the efforts to meet growing consumer concern for animal welfare and a more humane way of slaughtering animals, adding that the less stress the chicken experience the better the meat tastes.

Cargill is also helping McDonald’s find a way to feed chicken with insects and seaweed instead of soy, as part of the restaurant’s pledge to support forests. They found that chickens digest the insects better than vegetable protein which also makes them healthier.

The Parma Ham Consortium in Italy has denied allegations of poor animal welfare at several breeding farms after videos were made public by activists. The director of the organisation added that they were working on improving traceability and had put together guidelines with the Research Centre on Animal Production. A UK-based animal welfare organisation pointed out, however, that animal processing companies had the challenge of finding the right balance between taking care of animals but providing cheap meat.

Nestle has won the right to increase the groundwater extraction rate in Michigan from 250 gal per minute to 400 gal for its Ice Mountain Natural Spring Water plant which was recently expanded. The move angered environmentalists but the Michigan Department of Environmental Quality said it had reviewed the case carefully before granting the permit. Environmentalists argued that Nestle was able to get the water for free and only paid a USD 200 annual permit. In Brazil, meanwhile, Nestle decided to sell its water business – which includes the Sao Lourenço and Petropolis brands and three factories – to local company Grupo Edson Queiroz.

The soaring price of vanilla, which we mentioned in last week’s report, is leading to crop theft and deforestation in Madagascar – the world’s main vanilla producer. An investigation by The Guardian found that protected forest land was being cleared to plant vanilla as locals try to take advantage of the sky-high prices. The investigation also found that while vanilla prices have risen after a cyclone destroyed a big part of the crop last year, the price has also been inflated by speculators who are using vanilla sales to launder money made from logging and illegally exporting rosewood to China.

After much deliberation, a court in Los Angeles ruled that coffee sellers in California will have to put a cancer warning label on the coffee. The whole thing started after an organisation sued several coffee companies – including giant Starbuck – accusing them of not warning consumers about the presence of a chemical considered carcinogenic. Although the ruling only applies to California the label may eventually appear on a national level because it would cost too much to tailor packaging to one state only.

A report by NAFTA’s Commission for Environmental Cooperation found that food wastage in Canada is among the highest in the world. The estimated 396kg of food wasted per capita could cost as much as CAD 30 billion and create 21 million mt of greenhouse gas emissions. While a big part is lost before it reaches the consumer, people throw away around 170kg/year. The organisation called on consumers, as well as food industry stakeholders to intervene to reduce the waste.

In the UK, FareShare is asking people to sign a petition that would request the government to set up a GBP 15 million fund to help reduce waste by redistributing it to the hungry. The charity said this would help remove the burden from farmers and producers who currently have to bear the cost of moving the surplus around. An estimated 270,00mt of edible food is in surplus every year, out of which only 17,000mt is redistributed.

Report produced by ECRUU

Olam has secured a three-year green loan facility of USD 500 million from a consortium of 15 lenders led by ING Bank. Olam will pay a lower interest on the credit line, which is Asia’s first green consortium loan, if it achieves targets of improvement in over 50 environmental, social and governance parameters every year. 

Nestle launched new Milkybar Wowsomes chocolate in the UK and Ireland which has 30% less sugar thanks to a new technology that reduces the sugar content without altering the sweetness level.

Talking of sweetness, in Brazil, a bill in the Senate proposes to allow cane cultivation in Amazon to produce ethanol. Green groups and UNICA, which represents the country’s cane sector, opposed the move, arguing that it would make Brazil’s ability to meet the Paris pact goals harder.  UNICA added that it would hurt the image of the sugar and ethanol industry in the global market.

The price of vanilla has skyrocketed to a high of USD 600/kg, making it more expensive than silver, after a cyclone last year hit Madagascar – which produces 80% of the world’s vanilla. Bakeries and ice cream makers the world over have had to increase their prices  or resort to using substitutes. Only 1% of vanilla extract which is used in food comes from the real plant, however, the rest is made from vanillin molecules found in coal tar, petroleum and wood.

Several NGOs have called on investors, consumers, supermarkets and the meat processing industry to put pressure on soy traders to improve the traceability of their soy supply chain. This follows the release of a new report which shows massive deforestation of the Gran Chaco region in Argentina and Paraguay, deforestation which is blamed on soybean demand. The NGOs conceded that some trade houses had implemented the Brazilian Soy Moratorium to improve sustainability but argued this was limited to the Brazilian Amazon.

Environmental groups in the EU are concerned that the common agriculture policy (CAP) which is up for renewal next year will continue to subsidise large industrial farms and practices that are leading to the decimation of wildlife. Recent studies showed that the population of farmland birds dropped by over half in the past 30 years in Europe, while the number of insects is also dropping because of pesticides.

Leading conservation BirdLife Europe, however, said that the EU was in a “state of denial” regarding the effect of farming on wildlife. There is also talk that EU subsidies for wildlife-friendly farming would be cut after the European Court of Auditors published a report saying they were ineffective.

But there are efforts which show that well managed commercial farming is not necessarily destructive. BirdLife Netherlands has been working with Dutch dairy farmers to develop products that are friendly to the birds, as well as make some changes – such as cutting the fields later in the year – to avoid affecting the wildlife.

The loss of fertile soil as a result of unsustainable farming is putting some 3.2 billion people at risk, the equivalent of 2/5th of the global population, according to a report by IPBES. The study warns that 50-700 million people could be displaced by 2050 due to pollution and climate change as land degradation increases. 

Using blockchain technology in agriculture is expected to help improve traceability within the supply chain. It could help crack down on the amount of fake organic food as well as speed up payments. The head of JPMorgan has said he regretted saying earlier that Bitcoin was a “fraud,” admitting that cryptocurrency was going to change the business. The bank is building its own blockchain solution – Quorum.

Another way of solving degrading land would be to eat more plant-based foods instead of using them to feed animals we then eat. Scientists have called this “opportunity food loss” or the cost of choosing a particular alternative over better options. Looking at the US, they found that growing plant-based food for human’s direct consumption could feed an additional 350 million people.

Over ¾ of ads in sports sponsorships promote unhealthy food in the US, according to a new study. In the UK only 1.2% of food advertising promotes vegetables. Celebrity chef Jamie Oliver is working with ad agencies to start a campaign to change how people perceive vegetables.  This has worked in the past. The Popeye cartoon, which encouraged eating spinach, reportedly pushed sales up by 30% in the 1930s.

This report was produced by ECRUU