Consumers in region ‘becoming aware of environmental issues’

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Updated 11 May 2016
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Consumers in region ‘becoming aware of environmental issues’

STOCKHOLM: More brands are now choosing responsibly sourced Tetra Pak packages with the Forest Stewardship Council's (FSC) label in the greater Mideast and Africa region, according to top executives.
Tetra Pak has reported a rise in the number of companies in the region selling products in Tetra Pak packages that carry the FSC label, they told a group of journalists from Saudi Arabia, Egypt and Turkey visiting Tetra Pak's facilities in Sweden.
The company boosted the deployment rate of FSC-labeled packages in the region from 2.2 percent to 6.7 percent last year as manufacturers start to meet consumer demand for sustainable packaging.
Abdullah Hassan, Tetra Pak's communication manager for Arabia area, said: “Consumers in the region are gradually becoming aware of environmental issues."
He added: "Companies need a clear label on their package to communicate their commitment to the environment in a straight-forward way, and we are happy to support our customers with responsible sourcing and labeling. The FSC logo is widely recognized by consumers, enabling them to choose brands that are driving sustainable forestry."
“Our customers in South Africa, Turkey and Saudi Arabia were among the first in the region to deploy FSC-labeled packages,” the manager said.
He said Tetra Pak's factories and market companies in the Greater Middle East and Africa region are all certified by Forest Stewardship Council (FSC).
By 2015, Tetra Pak had deployed around 1.9 billion packs of FSC certified packages in GME&A.
FSC, founded in 1994 by a group of non-governmental organizations, timber users and traders, is widely recognized as the highest global certification standard for forest management.
For a product to carry the FSC label, there must be an unbroken chain of custody certification for all relevant sites.
Tetra Pak has completed the certification for all converting plants and market companies and can supply FSC-labeled packages from anywhere in the world, including all sites in the Greater Middle East and Africa region.
Driving environment excellence is one of Tetra Pak’s strategic priorities.
As part of this agenda, the long term ambition is to deliver all packages with the FSC label.
The company has delivered 54 billion FSC-labelled packages to its customers globally in 2015 alone.
Tetra Pak is the world's leading food processing and packaging solutions company. Working closely with our customers and suppliers,
Tetra Pak provides safe, innovative and environmentally sound products that each day meet the needs of hundreds of millions of people in more than 170 countries around the world.
With more than 23,000 employees based in over 80 countries, Tetra Pak believes in responsible industry leadership and a sustainable approach to business.


Oil markets jittery over lower demand forecasts

Updated 18 November 2018
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Oil markets jittery over lower demand forecasts

RIYADH: Oil prices continued to nosedive last week over demand concerns amid an outlook of a slowing global economy. The strong US dollar weighed on both oil prices and the global demand outlook. Currencies weakened against the dollar, eroding their purchasing power.
Brent was down to $66.76 per barrel and WTI dropped to $56.46 per barrel by Friday. The former came close to its one-year low as both the International Energy Agency (IEA) and OPEC released monthly reports that articulated a darkening demand outlook in the short term. This increased fears of an oil demand slowdown. Market fundamentals also suggest that price volatility is likely to remain high in the near-term, although the oil market reached a balance in early October.
OPEC’s Monthly Oil Market Report (MOMR) arrived with bearish sentiments, revising downward its oil-demand forecast for this year and next, for the fourth month in a row. It forecast that global oil demand will rise by 1.29 million barrels per day (bpd) in 2019, 70,000 less than what OPEC expected last month. The MOMR also forecast increasing non-OPEC supply growth for 2019, with higher volumes outpacing the annual growth in world oil demand, leading to an excess in supply. The report was welcomed with open arms by the IEA, which had been at least in part responsible for driving sentiment toward a bear market. Surprisingly, OPEC warned that oil demand is falling faster than expected. Necessary action is a must.
Saudi Arabia is not sitting idly by while oil markets look as if they are heading toward instability. Markets were expecting severe US sanctions on Iran, which could have resulted in supply shortages once Iran’s crude exports went to zero. The unexpected introduction of waivers to allow eight countries to continue importing Iranian oil, was however an eye-opener. Now, as the world’s only swing producer, Saudi Arabia will have to take other measures to balance oil markets and drain excess oil from global stockpiles.
Despite what some analysts are claiming, there is currently no strategy to send less oil to the US to help reduce US stockpiles. Yes, some have claimed that Saudi crude shipments to the US are at about 600,000 barrels per day this month, which is a little more than half of what was being shipped in the summer months. But the reasons for this are related to seasonally low demand, the surge in US inventories and refineries heading into their winter maintenance season. Remember that November crude oil shipments were allocated to the US refiners last month before the US waivers on the Iranian sanctions were revealed. Also, keep in mind that Saudi Arabia owns the largest refinery in the US, which has a refining capacity that exceeds 600,000 bpd.

Lurking on the horizon is the massive US budget deficit and increasing rumblings that the US economic boom is over. 

It must be noted that there is a degree of financial manipulation underway in the oil futures markets. At the moment, there are few places where quick profits can be made, so some investors moved from stocks to commodities. Now, there are downward pressures on oil prices as some commodities market traders went long on oil futures, thinking that crude prices would rise. Then these same traders shorted natural gas, assuming that with a warmer winter, prices of that fuel would fall. Unfortunately for the traders, Trump’s sanction waivers on Iranian crude oil exports and cold weather on the US East Coast, caused exactly the reverse to take place. Oil prices fell and natural gas prices rose. Traders were therefore forced to sell their assets to cover margins, pushing oil prices lower. It is expected that some hedge funds and investment funds will also be moving away from going long on oil futures and this will cause further selling.
Lurking on the horizon is the massive US budget deficit and increasing rumbling that the US economic boom is over. The US federal budget deficit rose 17 percent in the 2018 fiscal year. It is now larger than in any year since 2012. Federal spending is up and amidst US President Donald Trump’s tax cuts, and federal revenue is not keeping pace. To make matters worse, the strong US economy and interest rate hikes by the US Federal Reserve have boosted the dollar.
A strong dollar makes commodities such as crude oil more expensive in international markets and reduces demand. Trump wants oil to be priced as low as possible to help bolster the US economy, which is clearly under strain, and to facilitate sales of crude abroad. But with a looming global oil shortage just a few years away due to a lack of upstream investment, it is incumbent on global oil producers to consider the long term in their output decisions.

* Faisal Mrza is an energy and oil market adviser. He was formerly with OPEC and Saudi Aramco. Reach him on Twitter: @faisalmrza