Daily Update: April 20, 2022

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Financial institutions call for action to tackle food insecurity

World leaders are seeking to tackle food insecurity, which is worsening around the world due to disruptions in the war on Ukraine, supply chains and commodity flows.

While the international sanctions imposed on Russia and the violent conflict itself have significant consequences for agricultural supply chains, Russia’s attack on Ukraine has increased significant risks to the world’s food supply. major markets in Europe, the Middle East, North Africa, South Asia and beyond. . Both Russia and Ukraine account for a significant share of global production and exports of wheat, corn, sunflower and vegetable oils and fertilizers. Agricultural commodity prices have been subject to extraordinary volatility since the start of the invasion on February 24. Inflationary pressures from the food price conflict and supply disruptions are likely to disproportionately affect emerging markets, which are already suffering from food shortages and could experience the resulting social instability in the longer term. . term,” S&P Global Ratings said in a recent study.

The Food and Agriculture Organization of the United Nations determined that global food inflation in March reached the highest level since data collection began in 1990. Now world leaders seem prepared to tackle the growing food insecurity crisis.

Late last month, the European Commission announced a €1.5 billion aid package, along with additional measures, to support farmers and protect the bloc’s food security from the effects of the conflict. Leaders of the World Bank Group, International Monetary Fund, United Nations World Food Program and World Trade Organization called last week for urgent and coordinated action to ensure food security. Now, as members of the World Bank and IMF gather in Washington this week for their annual meetings, world finance leaders seem focused on finding solutions to food insecurity.

“We are facing growing global food insecurity. This threat hits the most vulnerable the hardest, families who already spend a disproportionate share of their income on food. Moreover, the interconnectedness of the global food system means that people on all continents are affected,” US Treasury Secretary Janet Yellen said yesterday, addressing a cohort of leaders from international financial institutions and Group countries. of the Seven and the Group of 20. “Price and supply shocks are already materializing, adding to global pressures, creating risks for external balances and undermining the post-pandemic recovery.”

More than 800 million people, or 10% of the world’s population, suffered from chronic food insecurity before the start of the Russian-Ukrainian conflict, and at least 10 million more people worldwide could be pushed into poverty due to the food prices alone, Secretary Yellen said, noting that “the war has made an already dire situation worse.”

“Inflation is at the highest levels seen in decades. Soaring food and fertilizer prices are putting pressure on households around the world, especially the poorest. And we know that food crises can trigger social unrest,” IMF Managing Director Kristalina Georgieva said at the April 19 meeting. “For many countries, this food crisis comes on top of a debt crisis. Since 2015, the share of low-income countries in or near debt distress has doubled, from 30% to 60%. For many, debt restructuring is an urgent priority… We know that hunger is the biggest solvable problem in the world. A looming crisis is the time to act decisively and resolve it.

Agricultural multinationals have not followed other global companies in ceasing operations in Russia. Analysts polled by S&P Global Commodity Insights believe that despite mounting pressure, the world’s four largest agribusinesses – Archer Daniels Midland, Bunge, Cargill and Louis Dreyfus – will stay in Russia at least in the short term. Nevertheless, production of agricultural products is expected to remain weak in Russia and Ukraine as the conflict continues. In Ukraine alone, wheat production is expected to fall by 33.3%, corn by 52.3%, sunflower by 42.9% and rapeseed by 25.4% this year, according to IHS forecasts. Markit, which is now part of S&P Global.

Today is Wednesday, April 20, 2022and here is today’s essential intelligence.

Written by Molly Mintz.

Economy


Netflix earnings will brighten growth outlook as Russian sanctions add drag

Netflix Inc.’s service in Russia has been suspended since March, which could complicate the company’s efforts to revive subscriber growth globally. Estimates are somewhat mixed regarding Netflix’s exposure to Russia, but declining Russian member numbers and the inability to add new members in the country could hurt the company’s ability to provide the type growth it has experienced in the past, according to analysts. The company is set to report its first quarter results after the market close on April 19. down about 36% year-over-year.

—Read the full article from S&P Global Market Intelligence

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Capital markets


A long-awaited reversal of fortune for Latin American equities

The Latin American pendulum has moved from negative to positive returns over the past three months. The S&P Latin America 40 ended the quarter up 29.5%, its best first-quarter performance since 1991. This stands in stark contrast to other global equity markets, which ended in the red, with the S&P 500® losing 4, 6%, the S&P Europe 350® down 7.3% and the S&P Emerging BMI down 6.5%. Two years into the COVID-19 pandemic, most of the world seems to be moving on, despite the appearance of different variants. However, the uncertainty of the ups and downs of the virus still leaves many countries in a jumbled state.

—Read the full article from S&P Dow Jones Indices

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International trade


Agriculture Big 4 unlikely to leave Russia despite mounting pressure

Everything can be politicized, except food. This is all the more relevant in the context of widespread protests and collective calls for a boycott against the Russian invasion of Ukraine since February 24. But is that too much to ask? Most likely. The Big 4 in global agriculture – also known as ABCD – namely Archer Daniels Midland (ADM), Bunge, Cargill and Louis Dreyfus are unlikely to leave Russia, at least not in the short term, analysts have told S&P Global Commodity Insights. Speculation about the departure of the Big 4 has been rife in the market since the companies announced a “reduction of operations” in Russia.

—Read the full article from S&P Global Commodities Outlook

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ESG


National Grid is committed to providing fossil fuel-free gas distribution in NY, Mass. by 2050

National Grid PLC has outlined a vision to eliminate standard transmission of natural gas in its Massachusetts and New York distribution network by mid-century. On the supply side, National Grid USA would entirely replace fossil gas with renewable natural gas, or RNG, and low-carbon hydrogen by 2050. The company would reduce gas demand by supporting improvements in energy efficiency, the adoption of hybrid electric-gas heating systems, limited electrification of buildings and the development of geothermal networks. “We have a critical responsibility to lead the clean energy transition for our customers and communities,” National Grid CEO John Pettigrew said in an April 19 press release.

—Read the full article from S&P Global Market Intelligence

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Energy and raw materials


Denmark to increase gas production and quadruple green energy to replace Russian gas

Denmark plans to quadruple green energy production by 2030, boost green gas and temporarily increase domestic natural gas production to replace Russian gas, the energy ministry said on April 19. Plans include removing administrative barriers so the Tyra field in the North Sea can resume gas production as soon as possible as well as up to 4 GW of additional offshore wind capacity by 2030, the ministry said. “We will supply Europe with green energy and replace Russian gas,” said Minister of Climate, Energy and Utilities Dan Jorgensen. The strategy consists of five tracks to accelerate the green transition, boost green heat, phase out natural gas, boost green electricity and green tax reform.

—Read the full article from S&P Global Commodities Outlook

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Technology and media


Listen: Next In Tech | Episode 61: Consumer ESG Perspectives

The focus is on environmental, social and governance issues, but consumers seem to see them as more discrete aspects, rather than an integrated set of concerns. Sheryl Kingstone, Head of Customer Experience and Commerce, joins host Eric Hanselman to review data from a recent study that indicates the challenges and opportunities facing businesses. Reported declines in trust mean better communications are needed, but consumers say they value companies that live and express ESG values.

—Listen and subscribe to Next in Tech, a podcast from S&P Global Market Intelligence

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