Tag Archives: south-korea
China’s Food Demand Grows
China’s food demand grows Dow Jones Newswires 05/30/2013 @ 10:37am China’s rising hunger is driving ever-larger acquisitions of global food assets as the shifting dietary profile of the world’s most populous nation increasingly puts meat, dairy and processed-food producers into play. Underscoring the trend, China’s Shuanghui International Holdings Ltd. on Wednesday said it agreed to acquire Smithfield Foods Inc. (SFD) of the U.S. for $4.7 billion, aiming to secure more pork for Chinese markets. The proposal is the largest in more than a decade of Chinese ventures to snap up food companies abroad. Other purchases have included state-owned Cofco Corp. buying Australian sugar producer Tully Sugar Ltd. last year for about $140 million, and Shanghai-based Bright Food (Group) Co.’s 2011 purchase of Manassen Foods Australia Pty. Ltd. for an estimated $522 million including debt. Bright Food said last year it would acquire control of U.K. cereal maker Weetabix Food Co. The purchases are part of a broader effort by Beijing to secure the raw materials needed to feed its fast-growing economy. Chinese state-controlled companies in recent years have struck big energy and mining deals. But many of the country’s food investments have had lower profiles. Shuanghui’s bid for Smithfield, the world’s largest hog farmer and pork processor, signals that not just any dish will do. As China grows more wealthy, relatively expensive protein is becoming a bigger portion of the domestic diet. China’s meat consumption would still need to rise about 8% from last year’s level just to catch up to South Korea’s, according to the United Nations’ Food and Agriculture Organization. “It is part of the broad Chinese strategy to invest the country’s current-account surplus into strategically important commodities. And going forward, more transnational acquisitions are possible in meat and dairy,” said Paul Deane, the senior agricultural economist at Australia & New Zealand Banking Group Ltd. (ANZBY, ANZ.AU, ANZ.NZ). Cofco Chairman Ning Gaoning told reporters in March that his company is seeking acquisitions and investment opportunities in more consumer brands in the U.S., Australia and Brazil, suggesting that as Chinese palates get more adventurous, the door will open for imports of more premium foods. Australia may be a favored destination given its resources, Mr. Deane said. Chinese investment in Australia and New Zealand food and agribusiness targets has totaled $1.1 billion since 1995, according to research firm Dealogic. Beef may be a prime target for Chinese buyers, said Rabobank analyst Chenjun Pan. Chinese beef consumption has been rising steadily, with domestic prices more than doubling since 2007, she said. The U.S. Department of Agriculture projected that China’s beef imports would rise to a record 175,000 metric tons this year. Industry data show that China imported about 61,000 tons last year. Milk and other dairy products would also make logical Chinese acquisitions, said Li Guoxiang, a researcher at the state-backed Rural Development Institute of the China Academy of Social Sciences. “If we only rely on domestic resources to develop the animal-husbandry industry, China’s grain production will face challenges, and there will be more serious environmental pollution problems,” Mr. Li said. Relying on foreign resources may also assuage government concerns about having enough food, he said. As rising wealth collides with a string of scandals over tainted food in China, prospective acquirers could also shop for premium processed foods abroad, including olive oil and meat and dairy products, such as cheese and yogurt, Ms. Pan said. “The domestic market can’t convince consumers of food safety, so there’s a lot of space for such acquisitions.” -David Winning in Sydney, Sameer Mohindru in Singapore and Zhoudong Shangguan in Beijing contributed to this article. Write to Chuin-Wei Yap at Chuin-Wei.Yap@dowjones.com Subscribe to WSJ: http://online.wsj.com?mod=djnwires (END) Dow Jones Newswires May 30, 2013 10:51 ET (14:51 GMT) Continue reading
World Bank Looks at Global Carbon Pricing Systems
Posted June 3, 2013 It’s ironic considering all the attention on the struggles of the EU Emissions Trading System, but today over 40 national and 20 sub-national government jurisdictions have either implemented or are considering carbon pricing mechanisms. Global emissions trading schemes map via World Bank This wide-ranging assessment comes from no less an authority than the World Bank, which announced their findings this week in a new report “ Mapping Carbon Pricing Initiatives: Developments and Prospects. ” The Bank’s findings once again underling the growing momentum toward an interconnected global carbon market working to fight climate change and spur the transition to a global clean energy economy. Lessons Learned From EU Struggles Despite international failure to establish an international climate deal through the United Nations, the Bank sees individual carbon pricing initiatives developing faster than ever before – and learning lessons from the EU ETS . These markets are taking shape at the same time international prices on carbon are at historic lows and the prospect of coordinated international emissions reduction measures uncertain. “Even as the first generation of the carbon market stutters…it is progress at the country level that gives hope,” said Rachel Kyte , World Bank vice president for sustainable development. “Carbon pricing is emerging and carbon markets have a future.” Multiple systems feature novel system designs like pricing stabilization mechanisms to make them flexible and adjustable to changing economic situations that may have been unforeseen when they were created. The current glut of allowances and low prices in the EU ETS has been attributed to system inflexibility to handle reduced allocation demand after the economic recession. EU ETS allowance price chart 2008-2013 via World Bank Carbon Pricing Covering 20% Total Global Emissions These emerging schemes could make a massive impact on global emissions. As of 2013, the countries with functioning systems or carbon pricing mechanisms scheduled to start within the next few years collectively emit 10 gigatons of CO2 per year – equal to about 20% of global emissions, or the combined annual emissions of the US and EU. The Bank report highlights cap and trade systems in the EU, California, Kazakhstan , New Zealand, Quebec, the Regional Greenhouse Gas Initiative , and regional markets in Japan, as well as South Korea’s developing system . In addition, carbon taxes are cited in Australia , British Columbia, Denmark, Finland, Ireland, Norway, South Africa , Sweden, Switzerland, and the United Kingdom. Even more promising, the Bank’s report does not fully consider China’s fledgling system , which has begun pilot programs in major cities and will roll out nationally in 2020. “If China, Brazil, Chile, and the other emerging economies eyeing these mechanisms are included, carbon pricing initiatives could…cover almost half of total global emissions,” said Niklas Hohne of report co-author Ecofys. Severe Beijing air pollution image via Shutterstock Linkages And Expanded Targets Boost Value The Bank report also recognizes the value of international system linkages in stabilizing individual systems long-term. Linkages between the EU and Australia and California and Quebec , and potentially the EU and China , will create efficiencies and benefits for each system. However, the Bank cautions linkages need to be carefully timed to allow new systems to become established before connecting to other schemes. Bank analysts also note the growing trend of existing or scheduled systems expanding coverage of domestic emissions, with Australia and Korea now targeting 60% coverage, California eyeing 85% coverage , and New Zealand targeting 100% coverage within a few years. “There may not be a one-size-fits-all,” said Alexandre Kossoy , World Bank senior financial specialist. “But it is clear the foundation of the first generation of market-based instruments is informing what will constitute the future landscape of carbon pricing.” Does Hope Spring Eternal? Ultimately, it all comes down to climate, the ability to fund our transition to a sustainable future, and our inability to come to international agreement on climate policy. World Bank President Jim Yong Kim recently said climate change presents “serious consequences to the economic outlook” of international economies, and the Bank’s report acknowledges current emissions put us on the pathway to a devastating 3.5-4 degree Celsius temperature rise by 2100. If enough carbon pricing systems are online or planned by the next United Nations climate meetings, the power of international carbon markets as an economic and environmental stimulus may be too hard to ignore. Continue reading
Carbon Market Challenges & Opportunities
London, 29 May 2013 Short-term intervention in the EU IETA members would overwhelmingly support intervention by the European Commission in the EU Emissions Trading System (ETS) within 12 months to improve the functioning of the market from its current record lows. Almost all (96%) respondents back structural reform of the EU ETS, with almost half (45%) thinking an ambitious emissions target and cap would be the most effective option. The outlook for price recovery remains weak according to members with low carbon prices expected up to 2020. EUAs are currently trading at around €3.50, only 7% of the value needed globally to shift economies onto a low carbon pathway (€47). 56% of respondents expect EUAs to trade at €5-10 between now and 2020, a 47% fall from last year’s expectations for the same time period, and a 68% fall from those in 2011. • Expectations that EUAs will trade below €10 and CERs below €5 to 2020 • Domestic or regional policies will be more important that international negotiations over the next few years Dirk Forrister, President and CEO, IETA said: “The agreement in Doha to extend the cap and trade schemes will emerge elsewhere before 2020 in Brazil (37%), Japan (36%), and Mexico (36%). Four out of five now feel that domestic or regional policy initiatives are likely to be more important than international negotiations over the next five years. Respondents particularly highlighted that linking domestic or regional carbon markets will help stimulate the growth in a global market. 94% expect that the EU and Australian carbon markets will be linked before 2020, as well as 35% for New Zealand and around a25% believe that both California and South Korea will eventually link with the EU. Dirk Forrister, President and CEO, IETA said: “Carbon Markets are the preferred policy tool for addressing greenhouse gas emissions around the world. As new systems emerge, market actors and policymakers need to work together to design these systems in a harmonized way – and to make them “linking-ready.” That way, it will be easier to create a more globally connected system and a commonly traded carbon commodity, which will allow nations to meet emissions targets and preserve economic growth.” Amongst other key findings: The new Californian carbon market, launched at the start of the year, is expected to increase its share of the global market in terms of value, with California Carbon Allowances expected to continue trading at US$10-20 over the first three years of the programme. Only 62% believe that ICAO will propose an approach to global aviation emissions regulation before 2018, and more than one respondent in ten believes that they never will. Only 1% of respondents expect the outcome of COP21 in 2015 to result in legally binding targets for all major economies that are aligned with limiting climate change to 2 degrees above pre-industrial levels. Despite the collapse of carbon prices, all regulated entities surveyed said that the carbon price is still relevant to their capital investment decisions, with four out of five saying it is an important factor. Jonathan Grant, Director, PwC , who performed analysis on the survey said: “The outlook for a global deal is for a mix of binding targets and voluntary pledges; IETA members expect that the global deal in 2015 will look more like Cancun than Kyoto, but at least it won’t be Copenhagen.” “With a sustained period of low prices expected for EU carbon permits, business looks set to face a patchwork of climate regulation over the coming years which may raise concerns about competitiveness and high administrative costs.” Ends — Continue reading
