Aurelia Butler

Wheat prices are soaring as the Ukraine war sparks a global food crisis. But in Argentina, one of the world’s agriculture powerhouses, farmer Aimar Dimo is cutting back the acreage he devotes to the crop. “As a producer I feel responsible . . . my work should be oriented towards helping the crisis,” said Dimo, who farms 1,500 hectares in Rufino in the north-eastern province of Santa Fe. But “at a time when we should be selling to the world because it needs us more than ever, we have no confidence or incentive”. Argentina produced a record 21.8mn tonnes of wheat last year, compared with 25mn tonnes grown in Ukraine. But despite a pledge by President Alberto Fernández last month that the country would seize the “formidable” opportunity to meet demand, its farmers say they are facing a series of deterrents as the May to August planting season is under way. Chief among them is a strict export quota that Fernández’s leftwing Peronist administration further reduced in March to shore up domestic supplies — a move farmers say runs counter to his pronouncement last month. “Instead of our government stimulating production to make things easier for us, they intervene,” said Hugo Ghio, who farms wheat near the city of Córdoba.The cost of inputs such as fuel and fertiliser has also risen steeply as the war hits supplies and inflation soars in Argentina’s stuttering economy. Meanwhile, the government recently indicated it was considering increasing the 12 per cent tax levied on wheat exports and potentially introducing a new “unexpected profit” tax on companies that analysts say would hit commodity exporters such as farmers.Under Argentina’s export curbs, just 10mn tonnes of the 2022-23 wheat crop can be sent overseas, down from 14.5mn tonnes in 2021-22. Enrique Erize, president of Buenos Aires grain consultancy Nóvitas, said the “disastrous” government decision to reduce the quota meant the world “should not expect anything from Argentina” in terms of helping make up for the big drop in Ukraine’s wheat exports.Farmers in Argentina have in the past been banned from exporting produce to protect domestic supplies and prices. Analysts said such a move was unlikely this year but they had not ruled it out.The country has on average shipped between 12mn and 13mn tonnes annually to Asia, north Africa and other Latin American nations in recent years. Brazil is Argentina’s biggest customer in its home region, buying 6mn tonnes annually. Argentina is also one of the few big producers in the southern hemisphere, so the crop comes to market during the second half of the year, helping to fill the gap once northern countries’ wheat has been sold.

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But like other farmers, Dimo said that this year he was likely to sow “well below” the amount he planted in 2021. Farmers have also been hit by Argentina’s struggling economy. Cut off from most sources of international finance after a record-breaking IMF bailout veered off track in 2019, the government has resorted to printing money to help fund its deficit — fuelling inflation that soared past 65 per cent in April. While the IMF board signed a new $44bn debt refinancing plan with Argentina in March after nearly two years of talks, analysts say it remains to be seen whether the government can deliver on the loan conditions and secure additional financing from other sources.Meanwhile, the poverty rate has risen to nearly 43 per cent of the population this year, up from 35 per cent when Fernández took office, according to a report by the Social Debt Observatory of the Pontifical Catholic University of Argentina. This has prompted a series of official price freezes on basic goods such as bread and flour that have cut the money farmers can get for their grain in the domestic market.Wheat cultivators are already switching to other crops such as sunflowers and barley, according to Agustín Tejeda, chief economist at the Buenos Aires Cereals Exchange (BCBA). Such foods are not as widely consumed in Argentina as wheat so are seen as less at risk of state intervention. They also require less fertiliser and water, making them cheaper to produce, he said. Farmers said the overall costs associated with the upcoming wheat harvest had increased by 40 per cent. Meanwhile, big distortions in the local exchange rate are adding to the pressure on salaries and transport costs.

The price of chemical fertilisers has led Ghio to reconsider how much wheat to plant this month. “It’s our biggest cost,” he said. “We have enough fertiliser for now, but I’m unsure how much to use.” Some farmers are already applying less fertiliser than they should, Tejeda warned, putting the size of the crop at risk. Even if fertiliser prices were to stabilise or restrictions ease, weather conditions would be another challenge as the country emerges from a period of severe drought that ended in February, said Ghio. “There’s not enough humidity in my soil,” he added. “Our autumn was dry, so if I don’t see enough water I don’t plant.”Back in Santa Fe, Dimo said Argentina should do “everything within reach” to help ease the global grain shortage, adding: “It is our duty as a food-producing nation.” More

For hundreds of years, since early Maori explorers first landed their waka in the sheltered bays of the Marlborough Sounds, the area’s cool blue waters have provided a seemingly limitless source of fish.So, in April, New Zealanders were stunned to learn that the country’s largest salmon farming operation had, for months, been taking hundreds of truckloads of its prized export-bound Chinook species and dumping them in a nearby landfill — victims of a rapid rise in water temperatures.Grant Rosewarne, chief executive of New Zealand King Salmon, told the national broadcaster that, in terms of global warming, cold-water fish are just the canary in the coal mine.The US president’s top climate envoy, John Kerry, was similarly direct when he told an audience of global leaders in Davos last month that the world was atop a “precipice”. He pointed to the disastrous effects of the planet’s addiction to fossil fuels, including 15mn annual deaths from air pollution and the gathering pace and intensity of natural disasters including droughts, fires, mudslides, floods and storms.“We’re dealing with a crisis here, folks,” Kerry said. “It is a crisis made by human beings.” He was speaking to members of the World Economic Forum high in the Swiss Alps but, on almost every metric, the battle to stop global warming will largely be won or lost far to the east: in Asia-Pacific.Investors and environmental watchdogs worry that the warnings are not getting through to Asia’s factories, energy providers, corporate boardrooms and corridors of power.The region and its businesses, they say, are failing to respond with sufficient urgency to combat climate change.The world’s most populous region and its most important growth engine is responsible for more than half of global greenhouse gas (GHG) emissions. From lossmaking steel mills in China’s northern rustbelt to India’s swelling power sector, from South Korea’s semiconductor fabrication plants to Japan’s automakers, fossil fuels — mainly coal — still underpin the bulk of economic activity.Most governments in the region have made long-term pledges to cut emissions, as have many of Asia’s biggest corporate polluters and energy users, including South Korean electronics group Samsung, Japanese car manufacturer Toyota, and India’s largest conglomerate, Tata.But, at its current rate, environmental groups warn, the transition to renewable energy in Asia is nowhere near fast enough to arrest the rise in temperatures — as the mass fish deaths in the Marlborough Sounds demonstrate.Bernadette Maheandiran, a research and legal analyst with Australia-based shareholder activist group Market Forces, cites the huge gap between Japanese companies’ promises of mitigation and concrete actions by executives in Tokyo.“After the Japanese government made their net zero commitment, you saw a slew of Japanese corporations make similar commitments,” she says. “But what we’re seeing is the absence of an actual pathway to meet those commitments.” The sentiment is echoed loudly and publicly by campaign groups across the region — and more quietly and privately by concerned policymakers and corporate environmental, social and governance (ESG) teams. Many express growing frustration at inaction in the higher echelons of government and business.According to investors and environmentalists, one of the most important keys that will unlock change in the region is simple: data.Rather than paying lip service to the problem, companies could show they are serious about tackling emissions by releasing transparent data that can catalyse change. It would make them attractive to institutional investors and to increasingly environmentally focused consumers.“We don’t have an issue with companies with big emissions [profiles] . . . because that is where there is the biggest scope for change,” says Anders Schelde, chief investment officer at Denmark’s Akademiker Pension, a member-owned pension fund. “The first step to take action is to start measuring. It really is a problem.”The FT’s inaugural Asia-Pacific Climate Leaders list, compiled with Nikkei Asia and data provider Statista, aims to draw together what data there is, and to encourage companies to supply more of it. It identifies the 200 Asia-Pacific businesses that made the biggest cuts to their Scope 1 and 2 GHG emissions — arising respectively from a company’s own operations and from the energy it purchases — relative to revenue between 2015 and 2020.

The list has limitations. Mainland China is excluded because of the unreliability of some corporate data. And Scope 3 emissions — from those parts of the value chain not covered by Scopes 1 and 2, and typically most of a company’s GHGs — are insufficiently disclosed to be factored in.But the companies included are at least making a start — and some of those not featuring, such as Toyota, are striking. Schelde says across Akademiker Pension’s portfolio, fewer than half the companies provide reliable emissions data. But, in Asia, including more developed markets such as Japan, the world’s third-biggest economy, there remains firm resistance to shareholder engagement and activism over climate change.“My impression is the culture is less mature than in Europe and the US — companies are less used to investors approaching them and being critical,” he says. “In our part of the world, it is part of the way we do business.” Maheandiran adds that companies in Asia must not only improve disclosure of their own emissions and be more transparent about their carbon pricing assumptions, but do so “across their entire supply chains”. These shortcomings appear to be reflected within corporate hierarchies. While companies have hired ESG specialists, they lack the clout of their European and US counterparts.“The whole thing about sustainability and purpose and corporate responsibility, it is much more in the boardrooms in our part of the world,” says Schelde.However, national policies and history are also partly to blame.Governments across the region — including those of China and India, the biggest GHG emitters — have long bristled at being urged by the west to implement costly overhauls of their energy and industry sectors before achieving the levels of development seen in Europe and the US. They point out that the same western countries that are now among the loudest climate campaigners enjoyed growth underpinned since pre-industrial times by coal and oil. The US, for example, is the world’s biggest emitter historically, and still second only to China today. They note, too, that the west has benefited for decades from cheap manufacturing in Asia, while overlooking the fact the region’s industries are powered by coal. Last year, as the international community rallied to make more ambitious national emissions reductions at the COP26 UN climate change conference in Glasgow, Asia’s coal-fired power plants and energy-intensive factories were intensely busy, serving a post-pandemic rebound in industrial demand. Emissions surged.Little wonder that China and India, insisted — successfully — that COP26 water down a proposed commitment to “phase out” coal so that it became one to “phase down” its use.While the amount of coal power plant capacity under development declined in most regions in 2021, advanced economies in East Asia were the exception, according to data from a network of non-governmental organisations, including Global Energy Monitor, Solutions for Our Climate and the Sierra Club.“There is simply no carbon budget left to be building new coal plants,” says Flora Champenois, an analyst at GEM. “We need to stop, now.”Vladimir Putin’s invasion of Ukraine and the disruption to Russian oil and gas supplies have further complicated the outlook, with rocketing inflation and fears of commodity shortages prompting governments to reprioritise energy security over the climate response. Still, environmentalists and investors are holding out hope the transition to renewable energy can be fast tracked in Asia. They say this can be achieved by leaps into low-cost solar and offshore wind generation and adoption of electric transport fleets, along with efficient use of capital and carbon pricing.

Investors, too, are eagerly hunting for opportunities to support the transition to renewables and cleaner fuels — despite their frustration over the distance between countries’ climate commitments and the reality of massive fossil fuel dependency and deforestation in the region.Li Shuo, an energy expert with Greenpeace in Beijing, suggests there is still cause for optimism as Asia could “spearhead the clean tech transition” in energy sectors including solar and electric vehicles.“The solar industry did not exist in China 10 years ago; now it is the dominant player on the world stage,” Li points out. “That demonstrates how Chinese companies are good at leveraging favourable government policies [and] its domestic market, and [at] perfecting complex supply chains to be cost competitive.”“It is not an exaggeration to say companies in Asia hold the key to our climate challenge. If the polluters don’t move, we are doomed. If the innovators accelerate, the world benefits from the solutions they provide.” More

LONDON (Reuters) – Leading UK and U.S. pension investors managing more than $1 trillion have launched a campaign to stop companies using dual-class share structures that concentrate voting power in the hands of certain shareholders at the expense of others.Launched by British railways pensions scheme Railpen and the non-profit Council of Institutional Investors (CII), others backing the Investor Coalition for Equal Votes (ICEV) include the New York City Comptroller’s Office and the Washington State Investment Board. Companies with dual-class structures have two or more types of shares with different voting rights – usually one with greater voting rights for founders or early investors, and another for other shareholders with less voting power.The imbalance means most investors have less control over how the company is run and can make it harder to collectively push back on issues such as executive pay and corporate strategy.Big fund managers have fought with little success against the arrangements for years, arguing such structures – often favoured by high-growth technology firms – erode shareholder rights and undermine long-term corporate performance. Despite this, policymakers in countries including the United States and Britain have warmed to dual-class structures as a way to attract new listings to their markets.The group said it will lobby market participants and policymakers to make clear that proportionate shareholder voting is essential to effective stewardship and long-term corporate performance.”Voting is an important part of the stewardship toolkit, but dual-class share structures without automatic time-based sunset clauses mean long-term investors are trying to influence with one hand tied behind our backs,” Caroline Escott, ICEV Chair and senior investment manager at Railpen, said in the release. “The issue is fundamental to the ability to engage with, and hold companies to account on, material risks and opportunities, and we hope that the work of ICEV will mark a turning point in the dual-class share structure debate,” Escott added.Amy Borrus, executive director of CII, said the campaign would complement efforts by the group to push for legislative change in the United States, where the group’s draft legislation aims to curtail the use of dual share classes. Under the draft legislation, national stock exchanges would be required to bar listings of new dual-class companies unless they have seven-year sunset provisions, or both classes of voters approve the structure within seven years of listing. More

LONDON (Reuters) – Britain’s economy faces stagnation next year and could easily fall into recession, the Confederation of British Industry (CBI) warned on Monday after it slashed its outlook for growth due to surging inflation.The CBI is the third major body to cut its growth forecasts for Britain in the past week, following a downgrade from the British Chambers of Commerce and a warning from the OECD that Britain had the weakest outlook of any major economy bar Russia.”Let me be clear – we’re expecting the economy to be pretty much stagnant. It won’t take much to tip us into a recession. And even if we don’t, it will feel like one for too many people,” CBI director-general Tony Danker said.Households’ real disposable incomes are on track to fall 2.2% this year, the largest decline since records began in the 1950s, the CBI predicted, despite 37 billion pounds ($46 billion) of cost-of-living support measures from Britain’s government.The CBI predicts Britain’s economy will grow 1.0% next year, down from a previous forecast of 3.0%. The growth of 3.7% forecast by the CBI for 2022 largely reflects a favourable comparison with depressed output in 2021, when businesses faced COVID-19 restrictions for much of the year.The CBI urged the government to commit to replacing a generous tax break on business investment that is due to expire, and to avoid unilateral action in a dispute with the European Union over post-Brexit trade rules for Northern Ireland.”This is a tough set of statistics to stomach. War in Ukraine, a global pandemic, continued strains on supply chains – all preceded by Brexit – has proven to be a toxic recipe for UK growth,” CBI chief economist Rain Newton-Smith said.($1 = 0.8118 pounds) More

SEOUL (Reuters) – A strike by South Korean truckers entered its seventh day on Monday, posing a test for the country’s new president and deepening stress on Asia’s fourth-largest economy, already facing stagflationary pressures.The strike by unionised truckers seeking higher pay has crippled ports like Busan in the export-dynamo economy, snarling the shipment of components and finished products for the automobile, steel, cement and liquor industries.Steelmaker POSCO (NYSE:PKX) plans to halt some plants from Monday due to a lack of space to store unshipped products. Automaker Hyundai Motor has cut production at some lines.Prolonged labour strife could test President Yoon Suk-yeol, a political novice who took office five weeks ago, potentially distracting from his conservative agenda and raising the risk of long-term antagonism with powerful trade unions. Hundreds of strikers were expected on Monday to join the 100 or so who had gathered on Sunday at the main gate of an enormous Hyundai Motor factory complex in the southern city of Ulsan near Busan, a union official said.Dozens have been detained by police, local media said, but their protest has so far been mostly peaceful. The union and Yoon’s government have met four times but failed to reach an agreement.Protesting against soaring fuel prices and demanding minimum pay guarantees, about a quarter of the Cargo Truckers Solidarity union’s 22,000 members were estimated to be participating in industrial action on Sunday, the land ministry said.The ministry has urged the truckers to return to work but said it would seek to reflect their demands in the legislative process and keep trying to end the strife through dialogue with the union.The truckers demand an extension of subsidies, set to expire this year, that guarantee minimum wages as fuel prices rise. The government says it is up to parliament whether to change the legislation.As the global economy struggles with supply bottlenecks, any prolonged slowdown in the production and shipments of chips, petrochemicals and autos could add to concerns of rising inflation and slowing growth.South Korea’s inflation is set to hit a 24-year high 4.8% this year, the Organisation for Economic Cooperation and Development said last week, while cutting its growth forecast to 2.7% from a December projection of 3.0% More

When Britain left the EU, Prime Minister Boris Johnson agreed a deal that effectively kept Northern Ireland in the EU single market and customs union to preserve the open border with Ireland specified in the Good Friday peace agreement.It imposes customs checks between the province and the rest of the United Kingdom, which pro-British communities in Northern Ireland say erodes their place within the UK.Johnson has said the protocol’s implementation has damaged trade within the United Kingdom and has threatened political stability in Northern Ireland.The legislation will be presented to parliament by British Foreign Secretary Liz Truss.Brussels believes any unilateral change could breach international law. It could respond by launching legal action and by imposing countermeasures, such as tariffs.Britain’s Northern Ireland Secretary Brandon Lewis insisted on Sunday that the legislation complied with the law.He declined to say how the protocol would be changed, but said the government would set out the legal basis for the bill.It is expected to propose a “green channel” for goods moving from Britain to Northern Ireland, as well as scrapping rules that prevent the province from benefiting from tax assistance and ending the role of the European Court of Justice as sole arbiter, according to reports.The plan will be a test of Prime Minister Boris Johnson’s authority after he was almost removed from office last week when four in ten of his lawmakers opposed him in a confidence vote. However, it will be seen by the EU as an inflammatory move that violates an international treaty.European Commission vice-president Maros Sefcovic said in May that Brussels would respond with all measures at its disposal. U.S. House of Representatives Speaker Nancy Pelosi has said there will be no U.S.-UK trade deal if London scraps the protocol.Ireland’s Sinn Fein, the nationalist party that won a historic victory in an election in Northern Ireland last month, said Britain would “undoubtedly” break the law by imposing unilateral changes to the protocol.”(Britain) has sought a destructive path, and is now proposing to introduce legislation that will undoubtedly breach international law,” Sinn Fein president Mary Lou McDonald told Sky News. More

TOKYO/LOS ANGELES (Reuters) – The Japanese creator of one of the longest-running online role-playing titles, whose most popular video game has attracted nearly a billion registered users, is gearing up for global expansion and setting its sights on the West. Nexon Co Ltd – little known outside Asia – is one of the world’s 10 largest video game companies by market capitalization; its $22 billion valuation is larger than Take-Two (NASDAQ:TTWO) Interactive, the company behind “Grand Theft Auto,” or Roblox.Last year it completed the acquisition of Stockholm-based Embark Studios, whose founder led development of the hit “Battlefield” franchise. In 2022 it invested $400 million for a minority stake in AGBO, the independent studio founded by Anthony and Joe Russo, the creative duo who directed Marvel’s “Avengers: Endgame” and “Avengers: Infinity War.””The idea overall with that is to combine what we’re really good at – making a virtual world last and grow forever – with what they’re really good at,” Nexon’s chief executive, Owen Mahoney, told Reuters. Nexon is working with AGBO to explore ways to extend its game franchises to film or television and develop virtual worlds or video games inspired by AGBO’s movies. “Our vision, which aligns well with Nexon’s, recognizes that audiences have come to expect real immersion in the IP they care most about,” said AGBO CEO Jason Bergsman.The two companies are in early talks on adapting Nexon franchises such as “MapleStory” and “Dungeon and Fighter,” which have rich lore and passionate fan bases. These talks are still in preliminary stages, cautions one source with direct knowledge of the situation.They are also discussing a game or virtual world inspired by “Battle of the Planets,” an iconic Japanese anime show from the 1970s that AGBO is developing as a feature film.Mahoney hopes to leverage Nexon’s experience in operating “live games” – updating titles while they are running – to launch big budget titles with a Western sensibility, such as the free-to-play shooter game “ARC Raiders,” from Embark Studios. Embark’s founder, Patrick Soderlund, once led Dice, the company that developed the “Battlefield” franchise and was acquired by Electronic Arts (NASDAQ:EA) when Mahoney was head of mergers and acquisitions there. VIRTUAL WORLD PIONEER Nexon has assiduously avoided the frenzy around the “metaverse” that has gripped tech giants Microsoft (NASDAQ:MSFT) and Facebook (NASDAQ:META). “Nobody can define it and most importantly they can’t define why it’s so darn great,” Mahoney said. “It’s a big nothingburger.”Nexon was an early adopter of features that have become common in the industry including in-game virtual currencies and the free-to-play business model.These features were rolled out in games such as Nexon’s “KartRider” racing game, which has been running for almost two decades – one of what the company calls its “forever franchises.” Its most popular franchise, the arcade-style fighting game “Dungeon and Fighter,” has earned more than $20 billion since 2005 – more than the combined box office proceeds of the “Star Wars” or “Harry Potter” film franchises. One big new challenge as part of Nexon’s expansion will to generate returns from higher-budget Western games. “Nexon does not have much of a track record in operating photorealistic games for hardcore gamers,” Citigroup (NYSE:C) analysts wrote in March, initiating coverage of the stock at “neutral”.Nexon wants to control the cost of developing titles in an era when budgets top $100 million. For instance, it uses machine learning technology to animate some character actions instead of relying on workers. “I don’t really care what happens in the first one or two quarters,” Mahoney said. “What I care about is what happens from years two to 20.” More