Coffee prices surge as Brazil frost hits crops

Coffee prices surge as Brazil frost hits crops
Coffee prices were catapulted last week to multiyear peaks, extending stellar gains so far this year after frosts damaged crops in Brazil. (AFP/File)
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Updated 25 July 2021

Coffee prices surge as Brazil frost hits crops

Coffee prices surge as Brazil frost hits crops
  • The commodity has rocketed by a blistering 60 percent since January

LONDON: Coffee prices surged this week to multiyear peaks, extending stellar gains this year after frost damaged crops in the world’s biggest producer Brazil.

The futures price for Arabica coffee, one of the South American nation’s top commodity exports, soared on Friday to just over $2 a pound, the highest level since 2014.

The commodity has rocketed by a blistering 60 percent since January.

Lower quality Robusta coffee, mainly grown in Asia, leapt to an October 2017 peak of $1,993 per ton, capping a near 40 percent gain so far this year. “Several reasons explain the astronomical gains for coffee prices,” Rabobank analyst Carlos Mera told AFP, citing mainly the devastating weather conditions in Brazil.

Mera also blamed soaring transportation costs and political unrest in No.3 producer Colombia.

Brazil suffered a historic drought earlier this year.

That was followed by damaging frosts this week at key plantations in Minas Gerais — a southeastern inland state that produces 70 percent of the nation’s Arabica beans.

Sub-zero temperatures have “sparked defoliation of crops and even kill the youngest plants” that are crucial for future harvests, Mera said.

Arabica has also been heavily impacted because the crop has a biennial plant cycle, whereby low-yield production one year is followed by bumper output the following year.

The market rallied “on freezing temperatures in Brazil growing areas last night,” added Price Futures Group analyst Jack Scoville on Friday.

“Freezing temperatures were reported in much of Minas Gerais and Parana and also in Sao Paulo.

“It is not yet known how extensive the damage was but ... a significant part of the cop got hurt.

“It is flowering time for the next crop and the flowers were frozen and will drop off the trees,” he added, noting, however, that the weather was now turning warmer.

At the same time, world coffee demand is picking up this year as global economies reopen from the deadly coronavirus turmoil.

That has stimulated demand for Arabica, which tends to be used in coffee shops and restaurants, unlike the lower grade Robusta favored for making instant
coffee granules.

While conditions are ripe for high prices, commodity economist Philippe Chalmin explained that the cost of coffee has been particularly low in recent years, pointing out that a pound of Arabica cost more than $3 in May 2011.

“Coffee producers have experienced a very long price crisis,” Valeria Rodriguez, Head of Advocacy & Public Engagement at the fair trade association Max Havelaar, told AFP.

“In the last four or five years, most of them have been working at a loss,” she told AFP.

“If the crop is smaller, it means that there are coffee producers somewhere in Brazil who will have no coffee to sell, and therefore no income,” she warned.

The rising prices are being passed on to consumers, “but slowly,” according to Mera.

“Roasters use the futures market to hedge themselves against short price increases, so it usually takes three to nine months to see the effects at retail level,” he explained.

“Even then, the increases at retail level are much more moderate,” he said with other components such as transport, packaging and marketing contributing to the retail price.

The current rise in coffee prices is also part of a wider context of inflation in the cost of raw materials, whether agricultural or industrial — with copper and tin both breaking records in recent weeks.


PIF first sovereign wealth fund to issue green bonds, Al-Rumayyan says

PIF first sovereign wealth fund to issue green bonds, Al-Rumayyan says
Updated 59 min 36 sec ago

PIF first sovereign wealth fund to issue green bonds, Al-Rumayyan says

PIF first sovereign wealth fund to issue green bonds, Al-Rumayyan says
  • The PIF has been given the mandate to develop nearly 70 percent of renewable projects in Saudi Arabia

RIYADH: Saudi Arabia’s Public Investment Fund will be the first sovereign wealth fund to issue green bonds, PIF Gov. Yasir Al-Rumayyan said at an event organized by the Future Investment Initiative Institute on Tuesday.

The issuance is part of the fund’s plan of shifting toward green investments.

“The Kingdom aims to deploy 50 percent of its investments in renewable and sustainable power sources,” Al-Rumayyan said.

The PIF has been given the mandate to develop nearly 70 percent of renewable projects in Saudi Arabia through its portfolio companies, the organization’s chief said.

Utilities and renewables are among the 13 sectors identified by the fund as part of its Vision 2030 strategy.

Saudi Arabia has seen a surge of interest in initiatives related to environmental, social, and governance amid growing awareness among global investors about ESG risks.

Al-Rumayyan said PIF was working with BlackRock on the ESG framework.

“We’re working with many partners from all over the world, domestically and internationally, to have better ESG compliance (in) all the things that we do,” Al-Rumayyan said.

One of the companies PIF owns, the Red Sea Development Co. which is building a new beach resort in the kingdom, secured a $3.8 billion green loan earlier this year for new hotels powered by renewable energy.

Saudi Arabia will announce its “Green Initiative” next month, followed by the “Middle East Initiative,” which includes planting 50 billion trees, Al-Rumayyan said.

“We have long-term views. We don’t want to exploit all of our resources overnight,” he said.

The PIF governor said Saudi oil has the lowest emission in the world. “Our oil is the best when it comes to emission,” Al-Rumayyan added.

Saudi Arabia is now more interested to invest in lower impacting energies toward the environment.

“We are one of the most efficient when it comes to sustainability and renewable energy. So today, as I said, our solar power production is costing us only 1.2 cents per kWh versus some other pretty restrictions, it’s over $0.15,” Al-Rumayyan said.


Stocks rebound as Evergrande jitters ease: Reuters

Stocks rebound as Evergrande jitters ease: Reuters
Updated 22 September 2021

Stocks rebound as Evergrande jitters ease: Reuters

Stocks rebound as Evergrande jitters ease: Reuters

U.S. and European stocks churned higher on Wednesday as market jitters around property developer China Evergrande eased, while the dollar index edged lower ahead of a U.S. Federal Reserve meeting, Reuters has reported.

MSCI's gauge of stocks across the globe gained 0.62 percent, bouncing back for a second day after it logged its biggest one-day percentage drop in two months on Monday.

Wall Street's main indexes moved higher in early Wednesday trade following solid gains for markets in Europe.

China Evergrande agreed to settle interest payments on a domestic bond, while the Chinese central bank injected cash into the banking system, soothing investors' fears of imminent contagion from the debt-laden property developer that had pressured equities and other riskier assets at the start of the week.

"Right or wrong, people I think are starting to show signs that they think maybe this pullback has reached its worst point," said Randy Frederick, vice president of trading and derivatives for Charles Schwab in Austin, Texas. "It wasn't entirely the Evergrande situation, but it seems like that was one of the biggest pieces of it."

On Wall Street, the Dow Jones Industrial Average rose 361.36 points, or 1.07 percent, to 34,281.2, the S&P 500 gained 37.02 points, or 0.85 percent, to 4,391.21 and the Nasdaq Composite added 88.66 points, or 0.6 percent, to 14,835.06.

The pan-European STOXX 600 index rose 0.93 percent, with bank stocks surging.

With a number of central banks around the world meeting this week, the Bank of Japan (BOJ) offered a bleaker view on exports and output as Asian factory shutdowns caused supply bottlenecks, but maintained its optimism that robust global growth would keep the economic recovery on track. BOJ Governor Haruhiko Kuroda also brushed aside fears that the debt problems of Evergrande could disrupt the global financial system.

Investors were closely watching the Fed, with the U.S. central bank expected to clear the way on Wednesday for reductions to its monthly asset purchases later this year.

The dollar index fell 0.102 percent, with the euro up 0.16 percent to $1.1742. The Japanese yen weakened 0.32 percent versus the greenback at 109.56 per dollar.

Benchmark U.S. 10-year notes last rose 1/32 in price to yield 1.3209 percent, from 1.324 percent late on Tuesday.

Oil prices climbed after industry data showed U.S. crude stocks fell more than expected last week after two hurricanes, highlighting tight supply as demand improves.

U.S. crude rose 1.93 percent to $71.85 per barrel and Brent was at $75.77, up 1.9 perncet on the day.

Spot gold dropped 0.1 percent to $1,773.31 an ounce, after three sessions of gains.

 


Burgerizzr pays $2.1m in cash dividends in H1

Burgerizzr pays $2.1m in cash dividends in H1
Updated 22 September 2021

Burgerizzr pays $2.1m in cash dividends in H1

Burgerizzr pays $2.1m in cash dividends in H1

Burgerizzr board of directors have signed off on SR8 million ($2.1 million) in cash dividends for the first half of 2021, according to a filing.

The pay-out — worth SR 3.2 per share - come as the restaurant chain’s profits increased by 16 percent to SR6.49 million ($1.73 million) during the first half of this year.

Burgerizzr, run by Shatirah House Restaurant Company, saw its net profits rise thanks to the opening of 13 new branches in the period to the end of June 2021.

Financing costs and losses on the disposal of property and equipment also decreased, according to Tadawul.

The total income of the company amounted to SR24.4 million in the first half of this year, up 28 percent compared to SR19 million during the same period in 2020.

The operating profit amounted to SR7 million, up 5 percent, compared to SR6.8 million for H1 last year.

Earnings per share during the period amounted to SR2.6, compared to SR2.25 during the first six months of last year.


Kuwait National Petroleum Co. completes multi-billion Clean Fuels project 

Kuwait National Petroleum Co. completes multi-billion Clean Fuels project 
The Mina Al-Ahmadi oil refinery
Updated 22 September 2021

Kuwait National Petroleum Co. completes multi-billion Clean Fuels project 

Kuwait National Petroleum Co. completes multi-billion Clean Fuels project 

RIYADH: The Kuwait National Petroleum Company (KNPC) has reached a “historic milestone” in clean fuel production, its CEO told KUNA on Tuesday.

Waleed Al-Bader claims KNPC’s Clean Fuels Project will cut carbon emissions and pollution through the use of products that meet strict environment standards.

The project works to reduce emissions and environmental pollutants by producing high-quality oil derivatives that comply with international environmental requirements, he said.

Measures undertaken include cutting nitrogen oxides, sulfur oxides and other pollutants, and increasing the capacity KNPC's two refineries to 454,000 barrels per day and 346,000 barrels per day respectively of eco-friendly oil by-products.

“This is a historic milestone," Al-Bader said, adding that the ambitious project is a source of pride not only for the KNPC but also for the whole Kuwaiti oil sector.

 


ROSHN pledges to create 170k jobs by 2030

ROSHN pledges to create 170k jobs by 2030
Updated 22 September 2021

ROSHN pledges to create 170k jobs by 2030

ROSHN pledges to create 170k jobs by 2030

RIYADH: ROSHN, a real estate company owned by the Public Investment Fund, launched a leadership program Himam as part of its plans to create 170,000 jobs by 2030.

The new jobs will be created in the company’s different projects across the Kingdom. 

The leadership program aims to hone the leadership skills of fresh graduates to transform them into future business leaders, the Riyadh-based company said in a statement.

The program will provide training of up to 24 months, following which the trainees will be accommodated in the company.

“We believe that the basic pillar for improving business performance lies in training a new generation that possesses innovative skills and solutions to realize the Kingdom’s future objectives,” said ROSHN Group CEO David Grover.