CNH Industrial’s CEO sees lack of growth in China’s construction market

By Bianca Flowers

(Reuters) -Farming and construction manufacturer CNH Industrial’s decision to permanently halt construction sales in China was due to declining market share and competition from local companies, the company’s CEO said on Thursday.

Mounting debt from Chinese property developers has been the catalyst for falling housing prices in the region and an overall real estate downturn that translated to a slump in construction sales for CNH Industrial and its rival Caterpillar.

“We couldn’t see a path of future growth in a market where our brand presence wasn’t strong,” Chief Executive Officer Scott Wine told Reuters in an interview.

The company said on Dec. 1 it would stop selling its construction equipment in China effective Dec. 31.

Last month, automaker Stellantis announced its joint venture that made Jeeps in China would file for bankruptcy, a potential sign of trouble for other global automakers facing competition from domestic players.

While Wine said he is broadly pessimistic about the global economy, he said agriculture remained a bright spot. The company will continue to sell agriculture equipment in China.

CNH Industrial, like other agriculture equipment makers, is expanding offerings of electric-powered tractors and precision agriculture products that the company displayed at its first technology day in Phoenix, Arizona.

Agriculture sales accounted for 80% of third-quarter revenue and the machinery maker is forecasting $900 million in net sales of precision technology for fiscal year 2022.

The company unveiled the industry’s first autonomous dry fertilizer spreader in September and said it plans to roll out the machine in larger volumes over the next couple of years.

(Reporting by Bianca Flowers in Chicago; Editing by Lisa Shumaker)

Russia’s war on Ukraine latest news: Russia attacks in east as recalibrates war aims

(Reuters) – Russian forces attacked settlements in eastern Ukraine from the ground and air, officials said, in support of the Kremlin’s apparently scaled-back ambition of only securing the bulk of Ukrainian lands it has claimed in the war.

FIGHTING

* The Kremlin said it was still set on securing at least the bulk of the territories in east and south Ukraine that Moscow has declared part of Russia, but appeared to give up on seizing other territory.

* Russian soldiers were preparing for fighting in winter conditions by taking part in tactical training exercises in Moscow’s close ally Belarus, the Russian defence ministry said.

* The risk of Russian President Vladimir Putin using nuclear weapons as part of his war in Ukraine has decreased in response to international pressure, German Chancellor Olaf Scholz said in an interview.

BRITTNEY GRINER

* U.S. basketball star Brittney Griner has been released in a prisoner swap with Russia and is on her way back to the United States, President Joe Biden said, ending what he called months of “hell” for her and her wife.

* Paul Whelan, a former U.S. Marine who is serving 16 years in Russia on charges of espionage which he denies, told CNN he was disappointed that more had not been done to secure his freedom following Griner’s release.* The White House said the prisoner swap will not change the U.S. commitment to Ukraine.

ECONOMY

* Ukraine’s central bank kept its main interest rate unchanged at 25%, and said Russian missile strikes on energy facilities were set to have an impact on GDP this year and complicate a quick rebound by the economy.

DIPLOMACY AND POLITICS* The United Nations is examining “available information” about accusations that Iran supplied Russia with drones, U.N. Secretary-General Antonio Guterres said, as he faces Western pressure to inspect downed drones in Ukraine.

* Pope Francis broke down and cried as he mentioned the suffering of Ukrainians during a traditional prayer in central Rome.* The U.S. House of Representatives passed a defence bill that provides Ukraine at least $800 million in additional security assistance next year.

(Compiled by John Stonestreet and Cynthia Osterman)

EU palm oil use and imports seen plummeting by 2032

PARIS (Reuters) – The share of palm oil in biodiesel and in food in the European Union is expected to fall significantly within the next 10 years, leading to a sharp drop in imports, the European Commission said on Thursday.

In its 2022-2032 Agricultural Outlook, the Commission projected palm oil would account for 9% of total biodiesel output by 2032, down from an average 23% for 2019/2021.

Under the EU’s renewable energy directive, palm oil-based fuels, accused to be linked to deforestation, are to be phased out progressively by 2030. The move raised outcry from the world’s two largest palm oil producers Malaysia and Indonesia.

In contrast the share of advanced biodiesels was expected to grow to 42% by 2032 from 29% in 2019/2021. Of this biodiesel from waste oils and fats would account for 26%, up from 23%, and other advanced biodiesels for 16%, up from 6%.

“This increase is mainly driven by specific fuel blending targets for advanced biofuels and the fact that they can be double counted towards the overall mandatory blending targets,” it said.

The use of other vegetable oils, primarily rapeseed oil, in biodiesel was expected to remain relatively stable at around 50% of biodiesel feedstock.

In food, the use of vegetable oils was expected to rise by 2.9% compared with the 2020/2022 average to 10.6 million tonnes in 2032.

But efforts to cut the use of palm and soybean oil in the EU would lead to a significant change in balance between the different types of vegetable oils, the Commission forecast.

Palm oil use in food would fall by 35.7% and soybean oil by 23.5% while rapeseed oil would gain 12.6% and sunflower oil would rise 27.5%, the Commission said.

This would eventually lead palm oil imports into the bloc to fall to 3.3 million tonnes in 2032 from 6.0 million tonnes in 2020/2022, it said.

(Reporting by Sybille de La Hamaide; Editing by Krishna Chandra Eluri)

BNP Paribas Asset Management heads for the woods with Danish deal

By Virginia Furness

LONDON (Reuters) – BNP Paribas Asset Management said on Thursday it had bought a majority stake in a Danish firm specialising in woodland and agricultural investments.

The purchase of the stake in International Woodland Company, which has more than $5.7 billion in assets under management, means BNP Paribas will for the first time offer its clients direct investment in woodland and agricultural land.

Buying agricultural or woodland for financial returns remains niche but is growing, with the likes of BNP Paribas saying it has the potential to offer investors protection from inflation while also helping safeguard the natural environment.

Climate conscious investors have channelled billions of dollars into clean energy but investment flows into protecting and better managing the world’s ecosystems remain minute by comparison.

The U.N. says investors need to provide $384 billion per year by 2025 to guard against threats of climate change and loss of natural resources. A U.N. summit to halt nature loss begins this week in Montreal.

Asset managers have started to launch biodiversity and nature-focused funds but their size is tiny.

“Private finance clearly has a role to play in addressing the challenges of increasing and protecting natural capital, as well as appealing to institutional investors looking to diversify into uncorrelated assets that can offer an inflation hedge and enhanced risk-adjusted returns,” BNP Paribas Asset Management said in a statement.

It did not disclose the terms of the deal.

(Reporting by Virginia Furness; Editing by Tommy Reggiori Wilkes and David Evans)

Australia proposes to overhaul ‘broken’ environment laws

SYDNEY (Reuters) – Australia will overhaul its environment laws and set up a new nature protection agency which would have powers to make decisions on the approval of development projects, Environment Minister Tanya Plibersek said on Thursday.

The move by the centre-left Labor government comes more than two years after an independent review found Australia’s environment laws were outdated and required fundamental reform. The report was submitted in 2019 to the former conservative government, which did not make any formal recommendations.

The independent Environment Protection Agency (EPA) will be responsible for all project assessments and decisions but the federal environment minister will retain the power to review EPA approvals.

“What exists now isn’t working. Our environmental laws are broken. They don’t work for business, they don’t protect the environment. What we are seeking is a win-win – a win for the environment and a win for business,” Plibersek told reporters.

Plibersek said businesses were waiting “too long” for decisions and that the proposed changes will also cut red tape, streamlining the project assessment process.

The EPA will act as “a tough cop on the beat” that can help reverse the deterioration of Australia’s environment, Plibersek said.

Australia has lost more mammal species than any other continent and has one of the worst rates of species decline among the richest countries due to extreme weather events and human encroachment, a government report out in July found.

The opposition Liberal-National coalition said it supported steps to protect the environment but the government’s plans have “unworkable regulations which will strangle businesses across the country.”

Environment groups welcomed the government’s decision, though WWF-Australia flagged concerns about a lack of urgency.

“On the government’s own timetable, the reform package will be introduced into the parliament before the end of 2023, which means it is unlikely to be implemented until 2024,” Chief Conservation Officer Rachel Lowry said.

“Our wildlife and wild places cannot afford to wait this long for action.”

(Reporting by Renju Jose; Editing by Kim Coghill)

Australia targets EU trade deal in first half of 2023 – minister

By Philip Blenkinsop

BRUSSELS (Reuters) – Australia is pushing to seal a free trade agreement with EU authorities in the first half of 2023, its trade minister said on Wednesday.

The European Union and Australia opened free trade negotiations in 2018 and have held 13 rounds of talks. But a deal has been held up by EU concerns over Australia’s climate change commitments and a bust-up over Canberra’s cancellationof a submarine contract with France last year.

“We are very keen to reach agreement in a timely fashion. We’re looking at the first half of next year,” Australian minister Don Farrell told reporters.

Farrell, who is on a two-week trip to Europe, pointed to climate commitment pledges by Anthony Albanese, who became Australia’s prime minister in May, and said he got a “very positive vibe” from his French counterpart in a meeting on Tuesday.

Farrell said both parties needed a deal.

Australia has suffered trade blockages by China on its wine, barley and other products, showing that it had been wrong to rely so heavily on Beijing.

“I think that same realisation has taken place in Europe, that there are risks of just putting all your eggs in one basket. You’ve got to have a diversified source of product and sale,” he said.

Australia has ample supplies of lithium and cobalt, key elements for batteries used in electric vehicles, along with titanium, palladium and rare earth elements.

There are still issues to overcome to seal a deal that Farrell said needed to be “meaningful”.

Australia is eager to export more beef, sugar, dairy and other agricultural products, which has met resistance from France and Ireland.

The EU is keen for Australia to cut its luxury car tax. Farrell said the government could ill afford to forego the A$800 million ($540 million) that that brings in per year.

The EU also wants food and drinks names such as feta or prosecco to be reserved for products made in Europe, but Australian producers oppose this.

($1 = 1.4874 Australian dollars)

(Reporting by Philip Blenkinsop)

EU starts crackdown on commodity firms using derivatives markets

By Huw Jones

LONDON (Reuters) – The European Union flagged tougher requirements on Wednesday for commodity companies using derivatives markets after failing to meet higher collateral calls when gas prices rocketed due to Russia’s invasion of Ukraine.

The EU’s executive European Commission proposed the changes in a draft law updating rules on clearing derivatives to better withstand shocks after governments had to help some energy companies meet higher margins on derivatives.

“To build resilience, the lessons drawn from the recent developments in energy markets, with several energy companies facing liquidity issues when using derivatives, need to be taken into account,” the draft EU law published on Wednesday said.

Energy and other commodity firms use derivatives markets to hedge sales and shield themselves against volatile price moves.

Brussels has already introduced a package of quick fixes, such as widening what can be used as collateral to meet margin calls, but said more structural changes were now needed.

One lesson from recent turmoil in energy markets is to scrap an exemption given to non-financial firms from reporting their off-exchange derivatives trades. The aim is to give regulators more data on markets, the draft law says.

There will also be more emphasis on making sure energy firms are aware of potentially higher margin calls in a market crisis.

The draft law also requires the bloc’s securities watchdog ESMA to compile a report and cost benefit analysis on whether clearing houses should have “segregated” or separate accounts for non-financial and financial sector members to avoid cross-sector contagion in a crisis.

The volume threshold at which mandatory clearing of derivatives contracts kicks in should also be looked at.

“ESMA is encouraged to consider and provide, inter alia, more granularity for commodity derivatives,” the draft law says.

They could also be differentiated in relation to environmental, social and governance criteria, environmentally sustainable investments or crypto-related features, it said.

(Reporting by Huw Jones; editing by David Evans)

Russia’s December wheat exports close to record, experts say

By Polina Devitt

MOSCOW (Reuters) – Wheat exports from Russia, the world’s largest supplier, will be close to record highs in December, if disruptions caused by storms in its main sea route the Black Sea are limited, analysts and an association of exporters said.

Over the entire 2022/23 July-June marketing season, however, Russia is likely to export less than its huge crop would potentially allow because of complications related to Western sanctions imposed on Moscow, some added.

Although the curbs do not target grain, Russian officials have said sanctions imposed on the Russian financial sector over what Moscow calls a special military operation in Ukraine have made it harder for grain exporters to process payments in banks and obtain vessels, trade finance and insurance.

In the first half of the season, according to Russia-focused Sovecon consultancy, wheat exports will be 2% higher than the same year-ago levels, boosted in part by this year’s record crop.

“After much publicity about the hidden sanctions and intervention of the international community, Russian grain exports are slowly returning to normal,” the Russian Union of Grain Exporters trade group said on social media on Wednesday.

Russia’s total grain exports, excluding supplies to Kazakhstan, Armenia and Belarus, are expected to reach 26 million tonnes in July-December, up 10% from a year ago, the association added.

“This is certainly not bad, but the potential of the current season is much higher. Hopefully the [current] drop in global prices will boost demand and the weakening of the rouble will improve sales margins.”

Russia is on track to harvest a record grain crop of 150 million tonnes, including 100 million tonnes of wheat, in 2022.

According to the group, the challenge for the second half of the season – January-June – will be difficulties associated with processing payments if Western sanctions are expanded.

Egypt and Turkey are traditionally the biggest buyers of Russian wheat, but no official data is available this year as Moscow suspended publication of its export and import data to avoid “speculation” after it sent troops to Ukraine on Feb. 24.

Since the start of the season on July 1, Russia sold more wheat than in any previous season to Saudi Arabia, Algeria, Pakistan, Brazil and Mexico, analysts at Russian rail operator Rusagrotrans said in a note.

Russia also resumed wheat supplies to Iraq after a 10-year pause, Rusagrotrans added.

SANCTIONS CAUSE SOME LOSSES

Sovecon and another consultancy IKAR see December wheat exports at 4.0-4.2 million tonnes.

That is close to the record of 4.3 million tonnes set in December, 2017, Sovecon said, adding that Russia exported 4.3 million tonnes of wheat in November.

Some traders temporarily stopped purchases from farmers in Russia’s south last week, as storms complicated loading of vessels in ports, it added.

“We could repeat November figures, but bad weather in ports will most likely prevent it,” IKAR said.

“If it is so, half-a-year wheat export will be at about 23.5 million tonnes. It will be still technically possible, but quite difficult to reach our seasonal target of 44 million tonnes.”

Sovecon expects Russia’s July-December wheat exports at 22.9 million tonnes, up 2% year-on-year and equal to the average of the past five years. It estimates Russia’s total 2022/23 grain exports at 56.1 million tonnes, including 43.7 million of wheat.

State-controlled trader United Grain Company expects Russia’s 2022/23 grain exports at 53-54 million tonnes, its deputy head Ksenia Bolomatova said last week, having picked up pace after a sluggish start to the season.

Without sanctions-related curbs, they would be over 60 million tonnes, she added.

(Reporting by Polina Devitt; additional reporting by Olga Popova; editing by David Evans)

India foodgrain subsidy bill to surge 30% to $33 billion this year – source

By Nikunj Ohri

New Delhi (Reuters) – India’s spending on subsidised foodgrain to the poor may rise to 2.7 trillion rupees ($32.74 billion) this fiscal year, as the government continues to provide support to the poor at least until December, according to a government official and a document reviewed by Reuters.

Federal government food subsidies will likely increase by 30% over the 2.07 trillion rupees ($25.14 billion) estimated in the budget, the official said, speaking on condition of anonymity as discussions are confidential.

Increased subsidies on foodgrain and fertiliser are likely to strain the federal budget, even though the government has seen strong tax collections this year. That could prompt it to cut other expenses to meet the budgeted fiscal gap of 6.4% of gross domestic product (GDP), Reuters reported.

As of end November, the Department of Expenditure has already released foodgrain subsidies worth about 1.5 trillion rupees to the state-run Food Corporation of India and states, according to a government document seen by Reuters.

India’s foodgrain subsidy bill has jumped sharply since the government announced a scheme in April 2020 to provide free rice or wheat to about 800 million people to reduce the pressure on household incomes from the COVID-19 pandemic.

The scheme has been slated to run from April 2020 to December 2022, leading to a total expenditure of 3.9 trillion rupees ($47.25 billion).

India’s finance ministry has opposed an extension of the measures, citing pressure on government finances.

But the costs could rise further if the government extends the programme beyond Dec. 31, when it is set to end.

If the scheme is extended until March 2023, the cost will shoot up to nearly 3.1 trillion rupees — the second highest ever , the official added.

India’s foodgrain subsidy bill totalled 2.9 trillion rupees in 2021/22, when the government’s free food grain distribution scheme was operational throughout the year.

For 2020/21, the government had spent about 5.3 trillion rupees on foodgrain subsidies but this was partly because it chose to settle past borrowings of the Food Corporation of India.

The Ministry of Finance and the Ministry of Consumer Affairs, Food and Public Distribution did not immediately respond to emailed queries from Reuters.

India’s total federal government expenditure is estimated at 39.4 trillion for 2022/23.

The government is also staring at a high fertiliser subsidy bill, over the estimated 1.05 trillion rupees in the budget, as the war in Ukraine has led to a surge in prices.

($1 = 82.3490 Indian rupees)

(Reporting by Nikunj Ohri; Editing by Kim Coghill)

Mosaic temporarily curtails potash production at Canadian mine

By Rod Nickel

WINNIPEG, Manitoba (Reuters) – Fertilizer producer Mosaic Co said on Tuesday that it has temporarily curtailed potash production at its Colonsay, Saskatchewan, mine in Canada, citing slower-than-expected demand.

Mosaic said in a statement that its inventories are adequate to meet demand in the short term. The company had restarted Colonsay in August 2021 after idling it for two years.

Potash prices spiked this year due to sanctions against Russia and Belarus, the world’s second- and third-biggest producers after Canada.

Prices have since declined, however.

Mosaic’s decision to curtail production is short-term and longer-term fundamentals look positive, said Chief Executive Joc O’Rourke. The Florida-based company expects to restart both of Colonsay’s mills in early 2023.

Colonsay was producing at a rate of 1.3 million tonnes annually, and plans an expansion to raise output to between 1.8 million and 2 million tonnes by late next year.

Rival Nutrien Ltd is carrying out a potash expansion of its own in Saskatchewan.

(Reporting by Rod Nickel in Winnipeg; editing by Jonathan Oatis and Sandra Maler)

Chile investigates hepatitis A-tainted raspberries recalled in U.S.

SANTIAGO (Reuters) – Chile’s government launched an investigation on Tuesday after raspberries from a Chilean company were recalled in the United States due to hepatitis A contamination. 

U.S. Food and Drug Administration (FDA) testing found the presence of hepatitis A in James Farm brand frozen raspberries from the South American country, a major exporter of raspberries, blueberries, grapes and cherries.

“The Agricultural and Livestock Service (SAG) has learned of these facts and has ordered an audit of the company,” SAG Director Andrea Collado told Reuters, adding that the investigation could lead to a sanctions.

According to the FDA, Exportadora Copramar was recalling 1,260 boxes of raspberries, which were packed in cardboard boxes branded James Farm and sold exclusively at Restaurant Depot/Jetro locations in New York, New Jersey, Connecticut, Massachusetts, Rhode Island, Pennsylvania, Maryland, Virginia, and Delaware.

The company did not respond to a Reuters request for comment.

The FDA said there have been no reports of illnesses or adverse reactions related to the fruits. Chilean Minister of Agriculture Esteban Valenzuela called for calm while the case is being investigated.

Valenzuela said that the regulations between the two countries would not stop raspberry exports, but that if problems were found with Copromar’s shipments, actions would be “limited to the company …responsible.”

(Reporting by Fabian Andrés Cambero; Editing by Sandra Maler)

Brazil senator Favaro leading candidate to be Lula’s agriculture minister – sources

SAO PAULO (Reuters) – Brazilian senator Carlos Favaro is the leading candidate to be agriculture minister for president-elect Luiz Inacio Lula da Silva, two sources told Reuters on condition of anonymity on Tuesday.

Spokespeople for Favaro, who is senator for the farming state of Mato Grosso, said the senator had not received an official invitation to take up the job, and did not comment further. Favaro is part of the president-elect’s transition team.

(Reporting by Roberto Samora and Lisandra Paraguassu; Writing by Ana Mano; Editing by Andrew Heavens)

Strong sugar prices help Tereos offset high production costs

PARIS (Reuters) -French sugar group Tereos reported strong first-half results on Tuesday, including a net profit and a sharp rise in earnings, as high sugar and ethanol prices helped offset an increase in production costs.

Tereos, the world’s second largest sugar maker by volume, posted a net profit of 133 million euros in the year to Sept. 30, compared with a year-earlier loss of 50 million euros, helped by higher prices that compensated for a sharp rise in energy and raw materials costs.

Over the same period, adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) rose 132% to 464 million euros.

In a presentation to bond holders the group said it expected strong results at its sugar Europe branch to continue in the second half due to higher selling prices reached in its annual fixed-price contracts for B2B sales.

In Brazil, where Tereos is among the largest sugar and ethanol producers, the group should benefit from expected high prices and a higher sugarcane crushing volume, at 17.3 million tonnes, up from 15.6 million tonnes in 2021.

Tereos’s decision to hibernate a plant in Brazil to maximise its margins amid lower yields led to a fall in daily production capacity but full year 2022/23 output and sales volumes were still expected to rise above 2021/22, it said.

Tereos has no direct exposure to the war in Ukraine, it said.

The group’s net debt fell 128 million from a year earlier and 131 million from the end of the first quarter on June 30 to 2.24 billion euros. The leverage ratio fell to 2.4x, an historically low level, it said.

However, Tereos expects its net debt at March 31, 2023 to be higher than at March 31, 2022 as higher costs led to a rise in working capital.

Tereos said in October it would raise the price at which it will buy sugar beet from its members by 40% from last year.

The group anticipated its sugar processing season by about a week ahead of possible energy restrictions this winter if Russia cuts off gas supplies.

Tereos did not announce the name of a new managing director following the departure of Ludwig de Mot late September, the third chief executive to leave the group in two years. Pending recruitment, Gerard Clay will continue to perform the role in his capacity as Chairman of the Board of Directors, it said.

(Reporting by Sybille de La Hamaide and Sudip Kar-Gupta, Editing by Dominique Vidalon and David Evans)

Indonesia govt to create a mechanism for rollout of B35 biodiesel policy

JAKARTA (Reuters) – Indonesia’s president has asked the government to create a mechanism next year to ensure the rollout of B35 biodiesel, a senior minister said on Tuesday.

B35 is a fuel containing a 35% mix of palm oil-based fuel.

Indonesia, the world’s top palm oil producer, currently has a mandatory 30% mix of palm oil fuel in biodiesel, known as B30.

“With the implementation of B35, it will reduce our dependency on (oil) imports,” Chief Economics Minister Airlangga Hartarto said.

He did not provide further detail on plans for B35 implementation or give any timetable.

Southeast Asia’s biggest economy is currently finalising trials on biodiesel containing 40% palm oil-based fuel known as B40.

Speaking after a cabinet meeting, Airlangga also said that the government expects headline inflation at the end of 2022 to be between 5.34% and 5.5%.

Indonesia’s annual headline inflation last month eased to 5.42% from 5.71% in October.

“We will monitor the global geopolitical environment, extreme weather and the scarring effects on inflation,” Airlangga said.

(Reporting by Stefanno Sulaiman; Editing by Ed Davies)

EU seeks deal on law preventing import of deforestation-linked goods

By Kate Abnett

BRUSSELS (Reuters) – The European Union will attempt to clinch a deal on Monday evening on a law to prevent companies from selling into the EU market soy, beef, coffee and other commodities linked to deforestation around the world.

Negotiators from EU countries and the European Parliament hope to finish the new due diligence rules, which would require companies to prove their supply chains are not contributing to the destruction of forests – or face fines.

“The EU is taking responsibility for its own consumption patterns,” EU environment commissioner Virginijus Sinkevicius told Reuters, adding that the legislation would be “transformative” in helping to curb global deforestation.

“The European Union is responsible for around 10% of this global deforestation via our consumption of certain products,” said Parliament’s lead negotiator Christophe Hansen.

Deforestation is a major source of greenhouse gas emissions that drive climate change. The EU is hoping the law will strengthen its position at the U.N.’s COP15 conference this week, where nearly 200 countries will seek a global deal to protect the natural world.

The proposed law would apply to soy, beef, palm oil, wood, cocoa and coffee, and some derived products including leather, chocolate and furniture. EU lawmakers want to add rubber and maize.

The European Commission, which drafts EU laws, proposed that 12 months after the law enters into force, larger companies that place commodities on the EU market would need to show they were not grown on land deforested after 2020. Smaller firms must comply after 24 months.

Companies would need to produce a due diligence statement showing when and where the commodities were produced and “verifiable” information that they are deforestation-free.

Failure to comply could result in fines of up to 4% of a company’s turnover in an EU country, with EU member nations required to check for compliance.

Some countries have criticised the EU plan, with ambassadors from Brazil, Indonesia, Colombia and Malaysia among those who wrote to EU leaders in July calling the rules “punitive in nature”, and burdensome and costly for developing nations.

Sinkevicius said he had visited or spoken with the governments concerned by the law, and the EU would work with countries before the rules kick in to ensure the rules can be implemented

The EU Parliament and EU countries want a commitment that the EU will also produce a bloc-wide strategy to support producer countries in addressing deforestation. This was not in the Commission’s proposal, and some EU officials said it was not clear if it would be in the final deal.

Julia Christian from campaign group Fern said the law’s success would depend on collaboration with producer countries – as well as stronger protections of indigenous peoples’ rights.

“We’re very happy to see it happen, but we need to… use it as a jumping off point for a bigger conversation,” she said.

(Reporting by Kate Abnett; Editing by Bernadette Baum)

Ukraine and UAE to start talks on bilateral trade deal

By Rachna Uppal

DUBAI (Reuters) -The United Arab Emirates and Ukraine agreed on Monday to begin talks on a bilateral trade deal, expected to conclude by the middle of next year, the UAE’s economy ministry said.

The UAE has tried to remain neutral in the Ukraine conflict despite Western pressure on Gulf oil producers to help isolate Russia, a fellow OPEC+ member.

UAE minister of state for foreign trade Thani Al Zeyoudi and Ukrainian economy minister Yulia Svyrydenko signed a joint statement on negotiations towards a Comprehensive Economic Partnership Agreement (CEPA), the ministry said.

This would “help to drive Ukraine’s economic recovery and create new opportunities for exporters, investors and manufacturers, and facilitate collaboration in high-value sectors such as infrastructure, heavy industry, aviation, IT & food security,” Al Zeyoudi later tweeted.

It would be the UAE’s first such deal with a European country, after more than $3 billion in trade and investment pledges made during Ukrainian President Volodymyr Zelensky’s visit to the Gulf state in February 2021.

Non-oil trade with Ukraine amounted to just over $900 million in 2021, up nearly 29% over the previous year, and 12% more than in 2019, the UAE ministry said.

“Ukraine is a key trade partner. The growth and investment potential was high before the whole geopolitical situation; we think it’s time to push things forward,” Al Zeyoudi earlier told Reuters.

“This is not only going to bring added value to the UAE, but also to Ukraine as well.”

Talks will likely centre on opportunities in the services sector and food security, where the UAE is making a push. Ukraine is a major supplier of grain to the Middle East.

A CEPA with Ukraine would open up access to new markets in Asia, Africa and the Middle East for Ukraine’s agricultural and industrial output, Al Zeyoudi said.

The UAE has signed free trade deals with India, Israel and Indonesia this year, aiming to build its position as a global trade and logistics hub at a time of rising competition from Saudi Arabia.

(Reporting by Rachna Uppal; Editing by Gareth Jones and Alexander Smith)

Ukraine says ship with wheat for Ethiopia arrives, part of anti-famine push

(Reuters) – A ship with Ukrainian wheat destined for Ethiopia arrived in port on Saturday, the first vessel to sail as part of a push to send food to countries most vulnerable to famine and drought, President Volodymyr Zelenskiy said.

Last Saturday, Ukraine and allied nations launched an initiative to export $150 million worth of grain to Ethiopia, Sudan, South Sudan, Somalia, Congo, Kenya, and Yemen.

“We ship food. We ship hope,” Zelenskiy said in a tweet accompanying a short clip of a vessel carrying 25,000 tonnes of wheat for Ethiopia that he said had arrived in the port of Doraleh, in neighboring Djibouti.

Zelenskiy said on Friday that by early next year, a total of around 60 ships would have delivered cargoes.

(Reporting by David Ljunggren; Editing by Sandra Maler)

Mexico, U.S. trade officials discuss energy, corn exports, environment

By Kanishka Singh

WASHINGTON (Reuters) – U.S. Trade Representative Katherine Tai met Mexican Economy Minister Raquel Buenrostro and stressed the need to make progress in talks over Mexico’s energy measures and its fisheries-related environmental laws, the USTR office said.

Tai also stressed the importance of avoiding any disruption in U.S. corn exports to Mexico, the USTR office said in a statement late on Thursday.

The United States and Mexico have been holding talks to resolve a dispute over energy policy. The USTR in July demanded dispute settlement talks on the grounds that Mexican President Andres Manuel Lopez Obrador’s energy policies discriminated against U.S. companies and violated a North American trade pact.

At the heart of the U.S. complaint, which Canada joined, are hold-ups in granting permits, a Mexican electricity law that prioritizes state firms, and other rules that investors feel disadvantage them, industry sources said.

The USTR complaint argued Mexico’s drive to tighten state control of the energy market was unfair to its companies and likely in breach of the United States-Mexico-Canada Agreement (USMCA).

Under that trade deal, if such a disagreement is not resolved in 75 days of consultations, a dispute panel can be requested to review claims. A panel could expose Mexico to the risk of punitive trade tariffs.

The Mexican economy ministry has invited Tai’s team to hold third round of energy consultations in the coming days in Mexico City, according to a ministry statement published separately Thursday. Buenrostro proposed establishing working groups, which would meet during December and early January to discuss the different aspects of the energy consultations.

In October, Mexico’s economy ministry said that dialogue had been “productive” with U.S. and Canadian counterparts, and that they wanted to keep talking to reach a “mutually satisfactory” solution.

(Reporting by Kanishka Singh; Editing by Sandra Maler and Grant McCool)

Global equity funds post biggest weekly outflow in six weeks

(Reuters) – Global equity funds recorded enormous outflows in the week ended on Nov. 30 as investors booked profits – after a rally in the last month – amid concerns about global economic growth due to China’s strict zero-COVID curbs.

According to Refinitiv Lipper data, investors withdrew a net $5.44 billion out of global equity funds, the highest since the week ended Oct. 19. MSCI’s gauge of stocks across the globe gained about 6.8% in the last month.

Graphic: Fund flows: Global equities, bonds and money market https://fingfx.thomsonreuters.com/gfx/mkt/egpbykxnzvq/Fund%20flows-%20Global%20equities%20bonds%20and%20money%20market.jpg

The U.S. and Asian equity funds had outflows of $17.37 billion and about $170 million, respectively, although investors were net buyers in European funds with purchases worth $3.02 billion. Among equity sector funds, tech and financials booked outflows of $484 million and $308 million respectively. Still, healthcare funds remained in demand for a seventh week, obtaining a net of $823 million in inflows.

Graphic: Fund flows: Global equity sector funds https://fingfx.thomsonreuters.com/gfx/mkt/zjpqjkzkjvx/Fund%20flows-%20Global%20equity%20sector%20funds.jpg

Meanwhile, global bond funds also remained out of favour for a fourth consecutive week, recording outflows worth a net $14.14 billion. Global short- and mid-term bond funds lost $3.51 billion in a 15th straight week of outflow, while investors exited $1.09 billion worth of high-yield funds after two weeks in a row of purchases.

However, safer money market funds and government bond funds remained in demand, obtaining a net of $29.07 billion, the biggest in four weeks, and $1.86 billion respectively.

Graphic: Global bond fund flows in the week ended Nov 30 https://fingfx.thomsonreuters.com/gfx/mkt/gkplwgyglvb/Global%20bond%20fund%20flows%20in%20the%20week%20ended%20Nov%2030.jpg

Data for commodity funds showed energy funds received about $59 million, marking the sixth week of inflows, but precious metal funds had small outflows. According to data available for 24,756 emerging market (EM) funds, equity funds secured $656 million in a second straight week of inflows. Bond funds obtained $105 million after witnessing outflows in the previous week.

Graphic: Fund flows: EM equities and bonds https://fingfx.thomsonreuters.com/gfx/mkt/mypmonlnkpr/Fund%20flows-%20EM%20equities%20and%20bonds.jpg

(Reporting by Gaurav Dogra and Patturaja Murugaboopathy in Bengaluru; editing by Mark Heinrich)

World food prices ease further in November, says FAO

PARIS (Reuters) -The United Nations food agency’s world price index fell marginally in November, marking an eighth straight monthly fall since a record high in March after Russia’s invasion of Ukraine.

The Food and Agriculture Organization’s (FAO) price index, which tracks the most globally traded food commodities, averaged 135.7 points last month, down from 135.9 for October, the agency said on Friday.

The October figure was unchanged from the FAO’s previous estimate.

Lower readings for cereals, meat and dairy products in November offset higher prices for vegetable oils and sugar, the FAO said.

Last month’s agreement to prolong a U.N.-backed grain export channel from Ukraine for another 120 days has tempered worries about war disruption to massive Black Sea trade.

The slight decrease in November meant that the FAO food index is now only 0.3% above its level a year earlier, the agency said.

The indicator, however, remains at historically high levels after reaching a 10-year peak in 2021 owing to harvest setbacks and brisk demand led by China.

The FAO warned last month that expected record food import costs in 2022 would lead the poorest countries to cut back on shipped volumes.

In separate cereal supply and demand estimates, the FAO lowered its forecast for global cereal production in 2022 to 2.756 billion tonnes from 2.764 billion estimated last month.

The forecast was 2% below the estimated output for 2021 and would mark a three-year low, the FAO said.

The downward revision to the global cereal crop projection mainly reflected weak maize (corn) prospects in Ukraine, with the war making post-harvest operations prohibitively expensive, it said.

Projected world cereal stocks by the end of the 2022/23 season were revised down by 1.1 million tonnes to 839 million tonnes, 2.2% below the previous season and the lowest level for three years.

The 2022/23 global cereal stock-to-use ratio, often used as a supply indicator, would drop to its lowest since 2013/14, but at a forecast 29.3% it would still represent a relatively comfortable level, the FAO added.

(Reporting by Gus TrompizEditing by David Goodman)