Aurelia Butler

CHICAGO/EVANSVILLE, Wisconsin (Reuters) – American farmers are worried that President-elect Donald Trump’s sweeping tariff plans will curb their access to top soy buyer China, but tariffs could also lure companies to build more U.S. crushing plants, hungry for domestic supplies.Trump’s plans to roll out blanket import tariffs could slam the door on imported vegetable oil supplies, which renewable energy analysts said could in turn lure the U.S. crush industry to revive lagging plans to build new plants and expand capacity.Such expansion has faltered over the past year, as the U.S. market was flooded with cheaper global supplies of diesel feedstocks like used cooking oil (UCO) from China, tallow from Brazil and canola oil from Canada. Now, these supplies are likely targets for Trump’s tariffs while global supplies of other vegoils are tightening and prices climbing, analysts said. USDA data projects that global rapeseed oil supplies will shrink by 13% over the coming year with sunflower seed oil stocks down 24%. Indonesian palm oil shipments have dropped as that country plans to boost biodiesel production next year.Potential new demand helped send Chicago Board of Trade soyoil futures jumping nearly 6% last week to the highest in seven months, traders said.Analysts cautioned it remained too soon to know how, or if, the Trump Administration will change President Joe Biden’s law providing a decade of lucrative subsidies for clean-energy projects. Building domestic demand for such crops is key for eating through excess stocks, especially without access to the Chinese export market, agricultural economists said. Hefty global competition could dent incomes for farmers who just harvested the second-largest U.S. soybean crop ever at a time when crop prices hover near four-year lows.If tariffs prompt retaliation by global U.S. soybean importers, big soy processors such as Bunge (NYSE:BG) Global and Archer-Daniels-Midland Co could benefit from a larger and likely cheaper supply of beans for them to crush in the U.S., industry analysts said. “If Trump goes the tariff direction, it is friendly for the U.S. crushing industry and capacity,” said Kent Woods, owner of advisory firm CrushTraders. Woods added that U.S. soyoil demand would also rise if Trump blocks imported oils from benefiting from renewable fuel tax credits.Farmers in rural Evansville, Wisconsin, were still waiting for the state’s first commercial-scale soybean crushing plant, which had been slated to break ground last year. For Nancy Kavazanjian and husband Charlie Hammer, the plant would mean an end to the nearly 400-mile round-trip to haul their soybeans to an Illinois buyer. The savings would be huge, Kavazanjian said. “It’s manpower, it’s fuel and it’s time.”PROMISE OF RICHESSoaring vegoil demand from biofuels makers triggered a flood of projects to build new soy processing plants three years ago.A mix of state and federal programs aimed at boosting lower carbon intensity fuels got a lift from Biden’s Inflation Reduction Act (IRA) climate legislation in 2022. Since 2021, U.S. renewable diesel production capacity soared 200%.Six new soybean processing facilities or plant expansions in Iowa, Nebraska and North Dakota opened in less than two years. At least four more projects in Nebraska, Ohio, Indiana and Louisiana are slated to launch through 2026.Yet in about a half-dozen Midwestern towns, the lucrative promise of riches has stalled. Crushers blame the delays on the flood of biofuel feedstock imports, soaring construction costs and the end of cheap financing as interest rates surged to a 23-year high.U.S. farmers looking to boost domestic soyoil demand have unsuccessfully tried to get Biden’s Treasury Department to exclude imported biofuel feedstocks from IRA subsidies known as 45Z. It remains too soon to know if Trump will try to alter the IRA’s clean energy provisions or limit imports of used cooking oil, said Susan Stroud, founding analyst at No Bull Ag consulting. ELECTION RESULTSSome firms slammed on the brakes on oilseeds plant expansions in order to wait and see how the election will impact biofuels policy. Permitting delays have stalled plant expansions by global oilseeds processor Bunge and joint venture partner Chevron (NYSE:CVX) in Destrehan, Louisiana, and Cairo, Illinois, along with slow approvals by the two companies, Bunge told Reuters.Industry sources said Bunge scrapped plans to expand its massive plant in Council Bluffs, Iowa. Bunge declined to comment.Work on United Cooperative’s smaller-scale plant in Waupun, Wisconsin, lagged after construction costs rose and interest rates soared, said Woods of advisory firm CrushTraders.United Coop CEO David Cramer said it will be online within two years; the only delays were in getting equipment.Soy processors also expect higher construction costs next year. Tariffs on imported steel and processing plant equipment could prove unpalatable for crushers that have yet to break ground.Evansville Mayor Dianne Duggan said CHS had spoken about approving construction of the local facility as early as spring of 2023. The plant would be able to crush 70 million bushels of soybeans annually – or about two-thirds of Wisconsin’s total crop production, according to company and government data. Today, it’s an empty field. CHS said the project is still under consideration. More

Citing a document, the news service said Lighthizer and his allies have been circulating memos regarding plans to persuade both lawmakers and the US public that higher tariffs will boost economic activity, rather than hinder it.On the campaign trail, Trump proposed rolling out blanket levies of up to 20% on imports coming into the US, as well as a 60% duty on items from China.Although critics have flagged tariffs could ultimately reignite recently waning inflationary pressures, a source close to policy planning told Politico that Lighthizer and his allies will argue that economic models have failed to “accurately predict changes in the economy.”Politico added that the circulated document will point to a study conducted by the US International Trade Commission which showed that tariffs imposed during Trump’s first term in office contributed to an increase in domestic production in “every single industry.”Meanwhile, Lighthizer and Trump’s transition team have also been in talks with Congressional staff regarding Congress potentially backing the incoming administration’s tariff policies through legislation, Politico reported. This action would both break from years of precedent set by both Republicans and Democrats and make it more difficult for future presidents to reverse the tariffs.Congress has not imposed a tariff in almost a century, rather choosing to allow the president to adopt such measures — albeit only under extraordinary circumstances.Lighthizer was also named as a possible candidate for a number of key economic positions in the new Trump White House, including secretary of Commerce, Treasury, or a senior adviser role, Politico said.In a note to clients, analysts at ING said Lighthizer’s return to the forefront of US economic policymaking “shouldn’t have come as a surprise but serves as a reminder that US protectionism is on its way.” More

Ahead of the ribbon-cutting at the Port of Chancay — a Chinese-built megaport on Peru’s Pacific coast that is set to transform regional trade — Chinese-made ZPMC unmanned cranes line the quay.BYD pick-up trucks sit ready to shuttle engineers around, while Huawei 5G internet towers have been freshly constructed to handle the automated operation.“Everything is made in China,” said a beaming Mario de las Casas, public affairs manager of the port for Cosco Shipping, the Chinese state-owned shipping giant that will operate Chancay once it opens on Thursday. “This is a huge opportunity not just for Peru but for the whole region,” he added, as Peruvian and Chinese flags flapped from street lights.Peruvian officials argue the port, built by Cosco with local miner Volcan, will transform Peru — a big producer of copper and fruit — into the Singapore of South America, and will upend maritime trade along the continent’s Pacific coast as it can accommodate larger vessels in its deep waters.Some content could not load. Check your internet connection or browser settings.But analysts and officials raised concerns that the $3.6bn project, which follows a series of other Chinese infrastructure investments, in effect represents a ceding of Peruvian sovereignty over the port.The US, for whom growing Chinese influence in Latin America presents a strategic problem, has warned the port could be used by Chinese warships. And the development may present an area of contention with US president-elect Donald Trump as he takes a tougher line against China. “The risks to Peru are at multiple levels,” said Evan Ellis, professor of Latin American studies at the US Army War College. “Risk number one is the country not reaping the benefits of its abundant resources and geographic position, but rather the Chinese getting those benefits.”Chinese President Xi Jinping, in Peru this week to attend the Apec summit ahead of a state visit, will appear with Peruvian President Dina Boluarte at Chancay’s inauguration on Thursday via video link from Lima, 80km away. US President Joe Biden will also be in town for the Apec summit on his first and last visit to South America as president — with little to offer.In May, amid a dispute with Cosco, Peruvian lawmakers passed legislation granting it exclusive rights to operate Chancay, something Ellis said was “previously unthinkable and against the very essence of Peru’s assertion of sovereignty over its own ports, which are its window to the world”.Mario de las Casas, public affairs manager of the port for Cosco Shipping. He says the port will provide opportunity for the whole region More

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Ownership of a piano has always had a loose connection to wealth and class: they are not cheap; they take up valuable space in a home; and learning to play requires much time and commitment. So, as the economies of the east Asia grew rapidly in the latter half of the 20th century, domestic demand for grands, baby grands and upright pianos surged. Before long, China became the world’s piano factory — buying up European firms and producing decent instruments on a massive scale. Even UK makers of high-quality pianos, such as Edelweiss, based just outside Cambridge, came to rely largely on parts being shipped from the east Asia — simply because the skills required to make them more locally had vanished.“Going back a hundred years or so, the British used to be quite good at it,” says Edelweiss’s creative director Mark Norman, whose father founded the business as a piano restoration firm in the mid 1970s. “But, now, around 80 per cent of the world’s piano parts are sourced in the far east.” Edelweiss, like other piano makers, came to rely on the imports. “If the containers of parts arrived regularly, it was a pretty good system,” Norman says. “We were about to fly out to China with a view to expanding our relationship [with Chinese factories] when Covid hit. Our flights were cancelled. We were quite glad we didn’t go, as we might never have got home again.”This was not just a postponed business meeting, however. China, in effect, stopped exporting during that stage of the pandemic, completely disrupting Edelweiss’s supply chain. “We were in a fortunate position in that we’d just ordered quite a lot of parts and we were stocked up,” recalls Norman. “But if they shut down for two years, or if it happened again, what would we do?”The firm had been worried about this kind of eventuality for a number of years and had pondered the possibility of making a piano entirely sourced and built in the UK. Up until then, Norman had resisted, considering it a near-impossible task. “The prospect was daunting,” he says. “But we had to secure a high-quality supply chain that wasn’t going to give us these problems, and obviously it would be desirable in terms of carbon footprint.”While decades spent restoring and building pianos to high standards had equipped Edelweiss with a wealth of skills, its staff actually had little knowledge of how to make the instrument’s constituent parts. The company therefore hired a respected American piano designer, Delwin Fandrich, to put together drawings for a new model, which the firm envisioned as being the smallest grand piano in the world. “Edelweiss took on a project that few companies — even much larger ones — are willing to consider,” says Fandrich. “Building any piano is a formidable task, but building one in-house to an all-new design even more so.”After the design was established, the firm started sounding out potential suppliers. “Initially, we didn’t tell them what the project was,” says Norman. “We really wanted to see how passionate they were, as we believe that, if you’re working on an instrument, you aren’t just doing a job. You’re making a piano, you have to go the extra mile to make it better.” Enthused by the response, Edelweiss decided to take the plunge, sending out legal non-disclosure agreements to guarantee confidentiality, then revealing their full plan to the preferred firms.One of the most critical elements was the piano’s frame. It is traditionally cast in iron — which requires a lengthy process of mould making, adjustment, and yet more mould making. Edelweiss could not find a foundry able to produce the cast iron it wanted, but was able to find a supplier who could cut it from steel. Then, the makers had to experiment with welding and bolting to produce a frame that could pass stringent stress tests. However, the action (the mechanism that brings the hammers into contact with the strings) proved one challenge too many; it was simply too complex to make from scratch.“You have to do thousands of tests on each key,” explains Norman. “The development process and quality control would be exacting and it would be very, very difficult to make any money. So, for this piano we’re using a carbon fibre composite action from the USA, which is very nice, we’re getting good results from it.” Overall, the process from design to the finished piano took three years; Norman estimates the financial cost as somewhere between £100,000 and £200,000 “which from one point of view isn’t too bad, but from another is rather a lot”.But whatever the precise outlay, it has left Edelweiss with a unique product — much loved by pianists — and in a much stronger position. “I wouldn’t say we were bulletproof,” says Norman. “But my father was always an innovator and, if he was still around, I think he’d be really pleased with what we’ve done.” More

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