TORONTO – Scotiabank’s monthly index of commodity prices has plunged to its lowest since January 2007.
The bank says global economic conditions are better than during the 2008-09 global downturn, but an extended period of sub-par growth has increased competition and pushed down commodity prices.
Scotiabank says a recent spike in the U.S. dollar against most currencies has also contributed to the decline.
The bank’s broadest commodity price index fell to 100.9 points in January, down 8.6 per cent from December and down 27.9 per cent from January 2013.
The oil and gas subindex had the biggest drop, falling by 21.5 per cent of the one-month period. Indexes covering the mining, forestry and agriculture sectors also fell.
Scotiabank says a benchmark price for Canadian heavy oil — which usually trades at a discount to other types of crude — dropped to US$30.49 per barrel, down from US$43.28 in December and a 2014 high of US$86.57 in June.
WINNIPEG – ICE Futures Canada closing prices:Canola: March ’15 $3.40 lower $470.10; May ’15 $1.80 lower $466.10; July ’15 $2.30 lower $459.90; Nov ’15 $2.50 lower $448.60; Jan. ’16 $2.50 lower $450.20; March ’16 $2.50 lower $453.20; May ’16 $2.50 lower…
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MONTREAL – Canada’s largest dairy processors are pressing the federal government to allocate to them the lion’s share of higher cheese import quotas from Europe under the new free trade deal with the European Union, Saputo chief executive Lino Saputo Jr. said Monday.
Those with a vested interest in the dairy industry, rather than just any business startup, should receive the largest allocations of the additional 17 million kilograms of product from Europe that will be allowed into Canada each year under the deal, Saputo said following a speech to the Canadian Club of Montreal.
“We’re saying that perhaps the incumbents, those that are part of the dairy industry, those that have import licences already, those that have a vested interest in the industry, should inherit those new licences,” he told reporters.
An association representing Canada’s dominant dairy processors — Saputo, Agropur and Parmalat — has been pressing its case with Canadian officials. But Saputo says there is little understanding of how the new quotas will be distributed.
Saputo backed rival Agropur’s call for federal action to prevent the domestic market from falling victim to potentially cheaper imports from Europe.
The Canadian producers fear they won’t be as competitive because European rivals receive generous government subsidies.
The new cheese imports will be in addition to more than 20 million kilograms of mainly specialty cheeses that are currently imported annually from Europe.
Saputo, Canada’s largest dairy processor, has the product variety and size to survive the increased imports, but its chief executive said he fears the increased competition could be especially difficult for the country’s small artisinale cheesemakers.
Meanwhile, he said the Montreal-based company (TSX:SAP) could return to Europe through an acquisition under the “right conditions.”
The company closed its operations in Britain and Germany in 2013 after seven years because it didn’t have the scale and product diversity to compete effectively.
Saputo said he wouldn’t describe returning to Europe as “a long shot,” but that the company’s top acquisition priorities are the United States, Latin America and Oceania.
He said Saputo’s entry into Australia with the purchase of that country’s fourth-largest dairy processor has made it “a more serious bidder” for acquisition opportunities in New Zealand, a dairy-producing country that exports 90 per cent of its output — mainly into the growing Asian market.
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ROSE HILL, N.C. – Lawyers for the world’s largest pork producer say it is bad enough being told your product stinks, but it’s going too far to mention that a Chinese company is behind it.
More than 500 neighbours of industrial-scale hog operations across eastern North Carolina have filed 25 lawsuits since last summer. Attorneys contend the residents are forced to tolerate terrible smells and clouds of flies that have been unaddressed since the factory farms moved in during the 1990s.
WHO’S GETTING THE BLAME?
The outdated image of pigs wallowing in farmyard mud before being butchered into hams and hocks is largely the purview of food artisans and hobbyists. Now, the vast majority of pork products come from factory farms, pioneered by Murphy-Brown LLC a generation ago.
Murphy-Brown was bought in 2000 by Virginia-based Smithfield Foods. Smithfield was then purchased by WH Group in 2013 — the largest takeover of a U.S. company by a Chinese corporation.
CHINA’S PORK BELLIES
The WH Group buyout was motivated largely to provide the Communist-led country a steady supply of cheaper, untainted U.S.-grown meat.
“This transaction creates a terrific opportunity through growth in exports for U.S. hog farmers to expand production to meet the growing Chinese demand,” Smithfield Chief Executive Officer C. Larry Pope said at the time.
But the lawsuits contend Chinese demand for more North Carolina-sourced pork will only increase the nuisance for hog-farm neighbours.
Lawyers for Murphy-Brown argue in court documents that litigation over the stink of industrial-scale growing operations should be scrubbed of references to “the Chinese government, Chinese corporations, and Chinese demand for and purchases of pork.”
The references are “scandalous and clearly designed to inflame the jury and the public while taking advantage of xenophobic biases in today’s political landscape,” the company’s lawyers said, adding the lawsuits are a “platform for negative publicity … that will harm Murphy-Brown’s reputation.”
The hog-grower’s lawyers also object to suggestions that the company is subject to influence from Beijing politicians.
The Smithfield Foods takeover was approved after a review by the Committee on Foreign Investment in the United States, a federal interagency group.
Dartmouth University management professor Matthew Slaughter said in 2013 that Shuanghui — as WH Group was called at the time — wasn’t like the state-owned companies commonly found in Communist economies. Slaughter said its shareholders included Goldman Sachs and Singapore’s sovereign wealth fund.
But West Virginia University management professor Usha Haley said at the same U.S. Senate committee hearing that Shuanghui’s decisions wouldn’t be entirely independent, noting pork is so central to the Chinese diet that Beijing controls domestic pork prices with the world’s only strategic stockpile of pork.
“The price of pigs is linked to China’s social and political stability: When pork prices rise, Beijing assumes that discontent will follow,” she wrote in prepared testimony.
Emery Dalesio can be reached at http://twitter.com/emerydalesio