US grocery prices may finally be falling. The March CPI showed seasonally adjusted prices for food consumed at home dropped 0.3 per cent compared to February – the first drop since September 2020.
The news from the UK is less encouraging. UK food and drink inflation reached 19.1 per cent in March. The Guardian, predictably, blames it on corporate greed.
The Black Sea
Russia says it will not renew the Black Sea grain export corridor beyond 18th May unless the West agrees to lift restrictions that hinder its agricultural exports. Russia’s foreign minister says that, so far, practically nothing has been done.
Analysts expect exports through the corridor to wind down gradually before the end date. Meanwhile, Ukraine is looking to bolster exports through the three ports in the Danube cluster.
Russia had already suspended inspections of vessels waiting to exit or enter the Ukrainian Black Sea for two days last week, blaming the UN and Ukraine for failing to register ships correctly.
The UN said it was talking intensively to the parties involved. “It is in everyone’s interests to keep the initiative going,” it stressed, saying it benefited “millions of vulnerable and low-income households”. Russia’s invasion of Ukraine is already causing a global shift in the trading of grains and causing hunger in importing countries.
In an attempt to regularise trade policy after Poland, Hungary, Bulgaria, and Slovakia announced bans on food products from Ukraine, the European Commission announced emergency preventative measures, including €100 million in compensation for affected farmers. Until the end of June, Ukrainian wheat, maize, rapeseed, and sunseed entering Bulgaria, Hungary, Poland, Romania, and Slovakia will only be allowed for re-export.
Russia will harvest about 123 million mt of grain this year, including 78 million mt of wheat. It compares to a record grain harvest of 153.8 million mt in 2022, with over 100 million mt of wheat. This year’s figures include Ukrainian territories claimed by Russia.
Cargill has warned that Russia’s increased control of its wheat exports threatens to obscure prices and curb efficiency in the global grains market. With international grain traders pulling out of Russia, the Russian farming conglomerate Ros Agro looks to expand.
Other market news
Southern Europe’s farmers face a crisis following months of drought. Some Spanish ecologists warn the country may soon be unable to sustain cereal crops such as wheat and barley.
The return of the El Nino weather phenomenon, fuelled by climate change, could result in record temperatures in 2023 or 2024.
Following a record drought, Argentina has met with the IMF to reschedule its $44 billion loan programme.
Australia will suspend their WTO complaint against China after Beijing agreed to review its tariffs on Australian barley.
With climate change threatening Arabica coffee production, producers are experimenting with liberica, another coffee species.
EU beekeepers have called for stricter rules against honey laundering - the imports of honey laced with sugar syrup.
Company news
After posting a record net income of $6.7 billion in the year ended 31st May 2022, Cargill’s earnings over the following nine months were $3.2 billion. Revenue for the period was $133.5 billion, compared with $165 billion for the preceding full year.
Institutional investors in Nestlé are pressuring the company to become less reliant on unhealthy products, warning that consumers’ overconsumption of packaged goods with limited nutritional value poses “systemic risks” to financial returns.
Private-equity funds bought a record 786 food and beverage manufacturers worth $32 billion in 2021, believing they would be profitable no matter how the economy fared. Higher labour costs, supply-chain disruptions, and surging inflation have upset those predictions.
Sustainability
The European Parliament has approved legislation to ensure that imports of various products, including palm oil, coffee, soy, wood, cattle, cocoa, and rubber, are deforestation-free. Critics argue it will be almost impossible to implement the law.
The Dutch government has paused work on its programme to shut down farms to reduce GHG emissions after the Farmer Citizen Movement (BBB) performed well in provincial elections. The Dutch minister for nature and nitrogen policy said there are no easy paths to cleaning the environment of excess nitrogen, and farmers’ suffering was unavoidable.
The FT warns that the EU’s pledge to hit net zero emissions by 2050 may be at risk unless Brussels brings farmers on board.
US President Biden has pledged $500 million over five years to fight deforestation in Brazil, making the US one of the largest donors to the global Amazon Fund. Congress is unlikely to approve the measure.
A new study argues that the world’s agricultural systems could feed 20 billion people but could wreck the planet. The FAO argues that there are too few women in agriculture, and they still occupy only a marginal place.
Unilever says that the procurement profession is going through a midlife crisis as sustainability and procurement become more integrated into the regulatory landscape.
Biofuels
Scientists have found a way to break down the tough lignin in plant material using anaerobic fungi, potentially providing a new path for cellulosic ethanol.
Germany’s biggest biofuels producer says that if we want to save the planet, we should give up meat before we give up biofuels.
Finally, Maersk is celebrating the launch of the world’s first green methanol-powered containership.
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Editor’s Note: I am sad to say that this is my last news summary. From now on, I will concentrate on interviews and books. Thank you for your continued support.
A pitty that you stop, after reading one of your books i started to use your newsletter and interview rich insight source, particular for me as an industry starter. At least you keep continuing the latter one.
Thanks