{"id":1322,"date":"2019-04-18T12:31:23","date_gmt":"2019-04-18T12:31:23","guid":{"rendered":"http:\/\/commodityconversations.com\/wordpress2\/?p=1322"},"modified":"2019-04-18T12:31:47","modified_gmt":"2019-04-18T12:31:47","slug":"commodity-conversations-weekly-press-summary-66","status":"publish","type":"post","link":"https:\/\/commodityconversations.com\/wordpress2\/2019\/04\/18\/commodity-conversations-weekly-press-summary-66\/","title":{"rendered":"Commodity Conversations Weekly Press Summary"},"content":{"rendered":"

China is reportedly looking to <\/span>shift anti-dumping tariffs<\/span><\/a> on US agricultural products to non-farm products under a trade deal which would see China buy some USD 30 billion\/year more US farm goods. Sources say that China would only be shifting the tariffs – and not scrapping them – because the US is not planning to remove the duties on their end at all. <\/span><\/p>\r\n

The deal is expected to help the US President gain farmer support but soybean farmers worry that purchases from China under such an agreement<\/span> would still be below<\/span><\/a> those seen before the trade war started. And farmers who grow other crops facing duties, such as cherries, pears and apples, are pushing for a comprehensive trade deal that would remove all duties, instead of just focusing on soybeans and pork. Some major sticking points are slowing down trade negotiations between the two countries, however, including China\u2019s <\/span>reluctance to accelerate the approval of GMO crops<\/span><\/a>. US farmers lost up to <\/span>USD 5 billion over the last five year<\/span><\/a> because of the slow process, although China approved five varieties developed by Bayer and DowDuPont back in January. <\/span><\/p>\r\n

As part of the current negotiations, China and the US are also working to set up a mutual \u201c<\/span>enforcement mechanism<\/span><\/a>\u201d according to which each side could impose trade sanctions unilaterally and <\/span>waive its right to challenge<\/span><\/a> any of these actions at the WTO. A number of experts warned, however, that this was the equivalent of putting each side in charge of assessing whether they had honoured the deal instead of relying on a neutral outside observatory. In fact, this would be the first bilateral trade agreement without any third party arbitrator, according to a <\/span>former WTO judge<\/span><\/a>. She added that this threatened the future of the trade organisation. But the US President, who has also been blocking the appointment of new WTO judges, is said to believe that self-interest will be a much more efficient way of getting both parties to stick to the deal. <\/span><\/p>\r\n

Another one struggling to sort out trade deals is the UK. The delay in Brexit is <\/span>causing further uncertainty<\/span><\/a> for the British food industry. Many export and import orders have been cancelled and are unlikely to be restored given the lack of clarity on the situation. In addition, food companies say they will need to continue stockpiling, which will affect their revenues. <\/span><\/p>\r\n

Talking of stockpiling, Switzerland made a controversial announcement last week as it proposed to <\/span>remove coffee from its emergency stock<\/span><\/a> program. The country has been accumulating stocks of food staples<\/span> since the end of WWI and suggested that coffee should be removed because it \u201cis not essential for life\u201d. Some 15 firms, such as Nestle, are currently stockpiling 15,300mt of coffee and most are reportedly against the proposal. <\/span><\/p>\r\n

Danone reported a <\/span>slow growth in sales<\/span><\/a> during the first quarter, including in Morocco where a boycott continues to lower sales volume. The group said it will continue to focus on local and healthier diets, such as plant-based, probiotic and low-sugar products. In the US, yoghurt consumption has been dropping steadily since 2014 and firms are <\/span>looking for new products<\/span><\/a> that will appeal to consumers. For one, sales of Skyr – an Icelandic yoghurt – grew 24% in the past 12 months. One of the main attractions of Skyr is that it is high in protein and low in sugar. Dairy farmers welcomed their growing popularity as these yoghurts require four times the amount of milk compared to traditional yoghurt. <\/span><\/p>\r\n

The new \u201cadded sugars\u201d labels that will be rolled out in the US in 2020\/21 should lead to a saving of USD 31 billion in healthcare costs and USD 62 billion in societal costs by reducing heart disease. A<\/span> new study<\/span><\/a> suggested that savings could <\/span>be higher still <\/span><\/a>if more companies decided to reformulate their products. However, an official at Mars pointed out that it was <\/span>not easy to remove sugar<\/span><\/a> as it also helped with texture and volume. Reformulating for soft drinks is easier but some companies such as Coca-Cola in the UK have decided to keep the sugar unchanged in their classic soda despite the sugar tax. Pepsi, meanwhile, reported <\/span>strong sales in the first quarter,<\/span><\/a> which it attributed to good demand for sparkling water and low-sugar sodas. <\/span><\/p>\r\n

France\u2019s Carrefour is collaborating with Nestle and IBM to sell a pack of mashed potato with a QR code that consumers can <\/span>scan to see the whole supply chain<\/span><\/a>, including \u201cthe varieties of potato used, the dates and places of manufacture, information on quality control, and places and dates of storage\u201d. The information will be stored and accessed on a blockchain developed by IBM\u2019s Food Trust which was designed to work without a native cryptocurrency.<\/span><\/p>\r\n

Also on the technology front, Olam Cocoa announced that it will start <\/span>using pocket spectrometers<\/span><\/a> developed by Consumer Physics, called a SCiO device, to help local traders and growers instantly assess the moisture content of their cocoa beans. This will help with quality assessment and guarantee growers a fair price, the firm explained. <\/span><\/p>\r\n

Finally, Societe Generale announced that it will <\/span>close its commodities <\/span><\/a>and trading businesses because of the low profitably and growing burden from financial regulations. The bank joins a number of groups which have made similar moves recently, such as BNP Paribas, Koch Supply & Trading, and several hedge funds.<\/span><\/p>\r\n

This summary was produced by ECRUU<\/a><\/p>\r\n\r\n\r\n\r\n

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