Russian assaults enhance strain on world meals costs

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Good night.

This morning’s Russian assaults on port amenities and a grain silo in Ukraine have heightened issues about meals safety, significantly within the world south, and threaten to halt the latest easing in meals costs in Europe.

The strikes brought on wheat, maize and soyabean oil costs to leap, additional fuelling will increase began by Moscow’s scrapping of a UN-brokered deal which since final August had allowed Ukrainian grain to be exported throughout the Black Sea.

Russia has been growing bomb and missile assaults on Ukraine’s ports since withdrawing from the accord. It has warned that it could assault civilian service provider ships in what western officers say is an try and cripple the nation’s agricultural trade and disrupt world meals markets.

Ukraine, together with Russia, is among the world’s largest exporters of grain, a degree emphasised by Kyiv because it makes an attempt to rally additional assist from the west. Andriy Yermak, Ukrainian president Volodymyr Zelenskyy’s chief of employees, has stated the assaults are “an try and destroy the flexibility to produce meals to the international locations of the worldwide south”.

The results are prone to be felt in richer international locations too. The British Retail Consortium stated the top of the grain deal and the concentrating on of amenities had been “darkish clouds on the horizon” that threatened to finish the latest moderation in meals costs.

The commerce physique stated yesterday that meals value inflation had slowed for a 3rd consecutive month, with the annual price easing from 14.6 per cent in June to 13.4 per cent in July, the bottom since December 2022, concurring with knowledge from analysis group Kantar and up to date updates from retailers similar to Ocado and Sainsbury’s. The UK competitors watchdog may additionally have helped by warning supermarkets towards profiteering.

One other driver of meals costs flagged by the BRC is rice export restrictions from India. Its authorities banned exports of a number of varieties after intense public anger over excessive costs. The transfer, introduced in the identical week as Russia started concentrating on Ukrainian grain, has despatched shocks across the globe: India is the world’s largest rice exporter, and lots of international locations rely on it for shipments.

If all that weren’t sufficient, excessive climate introduced on by the El Niño phenomenon threatens severe financial harm throughout South America, a area depending on agricultural exports. Results vary from damaging crop yields to inflicting fish emigrate away from what are usually a few of the world’s best fisheries.

“International locations are already coping with back-breaking meals inflation, significantly poor international locations,” stated Arif Husain, chief economist on the UN World Meals Programme. “Once you’re particularly depending on meals imports and your debt burden is extreme, your foreign money is depreciating and rates of interest are rising . . . for those who’re a poor nation who imports your meals or fertiliser, you’re in bother.”

Must know: UK and Europe economic system

The UK ditched plans to introduce a local model of the EU’s CE product mark. The “indefinite” postponement was broadly welcomed by trade and got here after greater than two years of intense lobbying to desert the proposals.

Nationwide reported the largest annual drop in UK home costs since 2009, bringing the typical value of a house in July to £260,828, 3.8 per cent decrease than final yr. NatWest, Halifax and Virgin Cash yesterday turned the newest UK lenders to chop mortgage charges. Builder Taylor Wimpey stated patrons had been taking up longer-term mortgages.

Eurozone unemployment hit an all-time low of 6.4 per cent however economists pointed to falling job vacancies in Germany and France as an indication that the bloc’s labour market would possibly begin to weaken on account of an anticipated financial downturn later this yr.

The FT revealed that the Ukraine struggle and the inexperienced transition have saved EU state support at close to file ranges. Brussels has accredited assist for enterprise of €733bn since March 2022, an quantity surpassed lately solely by subsidies accredited through the pandemic, with Germany accounting for nearly half of the entire.

Italian prime minister Giorgia Meloni is beneath strain after new knowledge confirmed the nation’s post-pandemic restoration was a lot weaker than anticipated. The economic system shrank by 0.3 per cent within the second quarter, whereas the eurozone as an entire grew 0.3 per cent.

Must know: World economic system

China’s metals and mining investments abroad are set to hit a file this yr because the nation races to safe assets to maintain its place because the world’s largest producer of electrical automobiles, batteries, photo voltaic panels and wind generators. Within the first half of the yr the entire has already topped $10bn.

A brand new Large Learn explains the decoupling from China of South Korea, which is extra linked with Beijing than nearly every other nation.

One other Large Learn tells the story of the militarisation of Mexico’s economic system. The military and navy are actually managing airports, customs, ports, prepare strains and probably a passenger airline, with lodges and nature reserves to observe.

Latin America is forward of a lot of the remainder of the world in relation to combating inflation. The area’s central banks have acted quick when prices soared, drawing on hard-fought battles within the Eighties and Nineteen Nineties.

Stress is growing on companies in Iran to compel feminine employees to put on the hijab. The difficulty turned a central theme in latest protests, prompting the return of patrols from the morality police to include the anti-hijab pattern.

Must know: enterprise

The variety of corporations itemizing on European inventory exchanges has slumped to the lowest stage for the reason that world monetary disaster, highlighting the dire state of the area’s marketplace for preliminary public choices and the attraction of going public within the US.

Fb proprietor Meta is ready to launch synthetic intelligence-powered chatbots with completely different personalities because it tries to spice up engagement with its social media platforms. One would possibly converse like Abraham Lincoln whereas one other would possibly advise on journey choices within the model of a surfer.

Within the concluding episode of the Tech Tonic podcast sequence, FT specialists focus on what the way forward for social media will seem like.

China’s producers are affected by slowing world demand and a tentative post-Covid restoration. This story of three factories — spanning footwear and electronics — illustrates how producers are experiencing a slowdown on this planet’s second-biggest economic system. Asia editor Robin Harding says Beijing has ample scope to switch money to households, enhance consumption and get the economic system transferring.

Uber recorded its first working revenue after stacking up $31.5bn in losses in an formidable world enlargement. The ride-hailing firm has proved to be extra resilient to financial uncertainty in contrast with rivals similar to Lyft.

HSBC introduced a $2bn share buyback after rising rates of interest helped the financial institution to bumper quarterly income of $8.8bn.

A scarcity of air visitors controllers on either side of the Atlantic may hit airways’ post-lockdown restoration. The issue has been compounded by the closure of a fifth of Europe’s skies due to the struggle in Ukraine.

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