Aurelia Butler

Spain’s wealthiest supermarket boss said an influx of buyers from Europe and China drove up the cost of Spanish tomatoes and pork — two vital components of national cuisine — as he sought to explain acute price inflation.Juan Roig, the billionaire owner of Mercadona, devoted a large part of his annual press conference to inflation after a year in which soaring prices sapped the purchasing power of global consumers and he was called a “ruthless capitalist” by one Spanish minister.Roig said the Ukraine war had hit tomatoes because the surge it triggered in gas prices prompted the shutdown of tomato-growing greenhouses in northern Europe, which had been heated with the fuel.Instead buyers flocked to Spain’s solar-powered growers, helping to drive up tomato prices from €1.39 in January 2021 to €2.05 per kilogram today. “The cost has gone up by a whopping 66 cents. We’ve raised prices by 50 per cent,” said Roig, whose fortune of more than €3bn makes him Spain’s fourth-richest person.“So we had two options: either buy tomatoes or leave customers without tomatoes. And we believed it was more important to have tomatoes at €2.05 than to not have tomatoes.”Salad shortages are easing in the UK — the biggest buyer of Spanish tomatoes last year after Germany — following supply disruption blamed on unusually cold temperatures in southern Spain, as well as Brexit and poor supermarket planning.On pork, a sensitive product in a country that cherishes its jamón ibérico, Roig said the price had jumped because of demand from China, which counts Spain as its biggest supplier of the meat, according to International Trade Centre data.“There are one billion Chinese people,” he said. “How much did they ask for? . . . I don’t know. What I do know is that pork cost €1.05 [per kilogram in January 2021] and now it costs €1.96.”“And if we want sausages and chorizo and ham, either we raise the prices or we don’t have it. That’s what I try to convey to everybody. It doesn’t depend on our personal decisions. It depends on demand and supply.”While Spain has been exporting significant amounts of pork to China for several years, and Europe’s cross-border salad trade is well established, Roig said “this year we have noticed much more influence” from international buyers.He added: “We’ve had tensions with suppliers like we’ve never had in our lives. We’ve been fighting with them a lot because the price increases are, well, I’ve never experienced anything like them.”He stressed that Mercadona, which has a 25 per cent market share in Spain, was doing what it could to alleviate inflation, noting that it had raised prices by an average of 10 per cent last year while food costs were up 12 per cent. The company reported an 11 per cent rise in 2022 sales to €31bn across Spain and Portugal and net profits up 5 per cent to €718mn. But it said its profit margin of 2.3 per cent was at “one of the lowest levels in its history”.As public discontent over rising prices mounted last year, Ione Belarra, a leftwing minister from the junior partner in Spain’s coalition government, called Roig a “ruthless capitalist”. Asked about the comment, he said: “Everybody has an opinion . . . I respect their opinions even if I don’t share them.”He did not offer an optimistic take on the outlook for prices. “The past two and a half months so far have been pretty bad for inflation,” he said, noting data published on Tuesday that showed food inflation in Spain hit 16.6 per cent year-on-year in February. “We don’t know how the world is going to work, we don’t know when the war in Ukraine is going to end . . . we would like to lower prices.” More

The UK government is planning to eliminate import tariffs on palm oil from Malaysia, a product blamed for widespread deforestation, as the price of joining an Asia-Pacific trade deal, according to people involved in the talks, prompting outrage from green campaigners. Britain is finalising entry terms to the Comprehensive and Progressive Trans-Pacific Partnership (CPTPP), an 11-member regional trade agreement, after two years of negotiations. Malaysia, one of the pact’s members, has successfully demanded Britain cut its palm oil tariffs — which currently range up to 12 per cent — to nil immediately on entering the pact, said people familiar with the talks.Alex Wijeratna, senior director at deforestation campaign group Mighty Earth, said: “The removal of tariffs on palm oil products from Malaysia without any environmental safeguards makes it very hard for the UK to call itself a climate leader committed to tackling deforestation and protecting precious habitats of endangered species.”People close to the matter said that the UK at one point envisaged a multiyear phaseout period for palm oil tariffs, which Malaysia opposed. The UK is expected to finalise broad agreement on the pact over the next couple of weeks before final signing in the summer. Campaigners say that cutting down forests to create palm plantations damages biodiversity © Matthew Lambley/AlamyAlthough the pact is of negligible economic impact to the UK, ministers have strongly promoted it as an example of a post-Brexit independent trade policy. The Department for Business and Trade, which leads the CPTPP talks for the UK, said it could not comment on the negotiations.Palm oil, which is harvested from oil palm trees, is used in a huge range of food and household products. Campaigners say that cutting down forests to create palm plantations damages biodiversity, in particular destroying the habitats of orangutans. Malaysia is the world’s second-biggest producer of palm oil after Indonesia, which is not a member of CPTPP.Compared with the EU, which retains palm oil tariffs and is also planning tough new rules against imports linked to deforestation, the UK has a relatively light regulatory approach, with a law that only addresses deforestation defined as illegal under local laws in producing countries.Clare Oxborrow, senior sustainability analyst at Friends of the Earth, said the plans were deeply concerning and could lead to more devastating loss of forest ecosystems. “This concession is completely at odds with the government’s commitment to curb deforestation from UK supply chains. We need robust legislation that ensures the products we consume in the UK don’t harm forests, communities and wildlife overseas,” she said.Because each of the CPTPP’s members has a veto on new countries joining the pact, the UK has been in a weak position in trying to resist demands for changes to its tariff regime and other policies. The pact also contains controversial investor-state dispute settlement provisions allowing companies to sue governments for violating international public law.Participants in the talks said Canada, another CPTPP member, asked the UK to drop its rules against imports of beef raised with growth hormone, though London has rejected that request and is granting new quotas for hormone-free beef instead.The minimal economic gains to the UK from joining CPTPP reflect both Britain’s geographical distance from the region and its existing bilateral agreements with most of the large economies, including Japan, Singapore, Mexico and Canada, which were rolled over from its membership of the EU. More

BEIJING (Reuters) – China will carefully implement state institutional reforms and ensure orderly operations, state media reported, citing the first cabinet meeting chaired by the new premier Li Qiang on Tuesday.Li, the former Communist Party chief of Shanghai, was installed as premier on Saturday during the annual session of China’s parliament and is tasked with reviving the world’s second-largest economy after three years of COVID-19 curbs.The institutional reforms remain “a major political task at present” and China will make sure that all the work is carried out normally, state media reported, citing comments from the meeting.”The institutional reforms should be taken as an opportunity to adapt to the needs of building a new development pattern and promoting high-quality development.” Last week, China’s parliament approved a plan for a sweeping reform of central government institutions, including the formation of a financial regulatory body and national data bureau and a revamp of its science and technology ministry.Analysts and investors said the new financial watchdog, the National Financial Regulatory Administration, will help bridge regulatory gaps, but it may also consolidate power at the top and could introduce more state and party intervention.The new cabinet chaired by Li faces the challenge of getting the economy back on track after COVID-19 restrictions, weak consumer and business sentiment, slow global growth and geopolitical uncertainties.The National Bureau of Statistics will release the country’s economic activity data for the first two months combined on Wednesday, offering a snapshot to measure the strength of economic revival after the lifting of the anti-virus curbs late last year. (This story has been refiled to say ‘China’ and not ‘Chinese’ in the headline) More

“We expect to reduce our team size by around 10,000 people and to close around 5,000 additional open roles that we haven’t yet hired,” Chief Executive Officer Mark Zuckerberg said in a message to staff. The layoffs are part of a wider restructuring at Meta that will see the company flatten its organizational structure, cancel lower priority projects and reduce its hiring rates as part of the move. The news sent Meta’s shares up 2% in premarket trading.The move underscores Zuckerberg’s push to turn 2023 into the “Year of Efficiency” with promised cost cuts of $5 billion in expenses to between $89 billion and $95 billion.A deteriorating economy has brought about a series of mass job cuts across corporate America: from Wall Street banks such as Goldman Sachs (NYSE:GS) and Morgan Stanley (NYSE:MS) to Big Tech firms including Amazon.com (NASDAQ:AMZN) and Microsoft (NASDAQ:MSFT). The tech industry has laid off more than 280,000 workers since the start of 2022, with about 40% of them coming this year, according to layoffs tracking site . Meta, which is pouring billions of dollars to build the futuristic metaverse, has struggled with a post-pandemic slump in advertising spending from companies facing high inflation and rising interest rates. Meta’s move in November to slash headcount by 13% marked the first mass layoffs in its 18-year history. Its headcount stood at 86,482 at 2022-end, up 20% from a year ago. More

US inflation remained hot enough to further complicate the path forward for the Federal Reserve as it contends with three bank failures and broader concerns about financial stability.The consumer price index rose 6 per cent year on year in February, following a 0.4 per cent increase from the prior month. That is a step down from the annual 6.4 per cent pace registered during January, though still elevated.Stripping out volatile food and energy prices, “core” CPI climbed another 0.5 per cent in February, matching the previous month’s increase and slightly higher than the 0.4 per cent monthly increase economists had expected. On an annual basis, it rose 5.5 per cent, only 0.1 percentage points less than January’s year on year pace.The data, released by the Bureau of Labor Statistics on Tuesday, comes at a tricky moment for the Fed, which on Sunday evening was forced to step in to contain the fallout from the abrupt failure of Silicon Valley Bank on Friday. Days before, crypto-bank Silvergate had shut down. After a frenzied weekend during which no buyer emerged to absorb the beleaguered tech lender — which at that point had been taken over by the Federal Deposit Insurance Corporation — government authorities rushed to pull together a rescue package before Asian markets opened on Monday.Not only were deposits guaranteed in full for account holders at SVB and Signature Bank, another lender that was shuttered by regulators on Sunday, but the central bank unveiled a new lending facility to ensure that “banks have the ability to meet the needs of all their depositors”.The so-called Bank Term Funding Program, which is backstopped by $25bn from the Treasury department, offers loans of up to one year to lenders that pledge collateral, including US Treasuries and other “qualifying assets”, which will be valued at par. Despite these measures, shares of First Republic and other regional banks perceived as vulnerable in the wake of SVB’s collapse fell sharply on Monday.Against this backdrop, investors and economists have rapidly altered their outlooks on the path forward for the Fed, which just last week was toying with the idea of accelerating the pace of its interest rate increases and opting for a half-point rate rise at its meeting on March 21-22. Speaking before Congress earlier this month, prior to the banking blow-up, chair Jay Powell said the Fed would respond more aggressively to raise rates if the data suggested a sustained rebound in economic momentum. He also warned at the time that the end point of the Fed’s monetary- tightening campaign, known as the terminal rate, would likely need to be higher than the 5.1 per cent level most officials pencilled in at the end of 2022.

The inflation report is the latest in a series of important data releases Powell said he would be watching to determine the size of the next rate rise. Another was the February jobs report, which showed employers had added 311,000 jobs last month, a slower pace than the previous blowout figures but still well above what officials indicate is in line with easing price pressures.The Fed had already scaled back the scale of its tightening to a more traditional quarter-point pace in February, after multiple half-point and three-quarter-point moves last year. But in the aftermath of the bank failures — which also included the voluntary liquidation of crypto-focused lender Silvergate last week — Wall Street is divided as to whether the Fed will proceed with another quarter-point rate rise or forgo an increase altogether. Expectations for the terminal rate, which at one point topped 5.5 per cent, have also been revised lower.In just one year, the central bank has lifted its benchmark policy rate from near zero to nearly 4.75 per cent — a historically aggressive pace that some believe also contributed in part to SVB’s demise given its holdings of long-term fixed-rate bonds and lack of protection against rising rates. More