Aurelia Butler

OTTAWA (Reuters) – Canadian Prime Minister Justin Trudeau is pushing ahead with a vaccine mandate for international truckers despite increasing pressure from critics who say it will exacerbate driver shortages and drive up the price of goods imported from the United States.Canada will require all truckers entering from the United States to show proof of vaccination starting on Saturday as part of its fight against COVID-19. That could force some 16,000, or 10%, of cross-border drivers off the roads, the Canadian Trucking Alliance (CTA) estimates. The government estimates 5% of drivers will be impacted, according to a government source.The mandate is the first policy measure taken since the pandemic began that could limit cross-border trucking traffic. Trucks crossed the border freely when the border was closed for 20 months because they were considered essential to keep supply chains flowing.”We don’t anticipate significant disruptions or shortages for Canadians,” the source said. Trudeau has championed a strict inoculation policy for civil servants and federally regulated workers, and the fast-spreading Omicron variant of the coronavirus appears to have strengthened his government’s resolve to stick with the policy.Industry groups and opposition parties say it is a bad idea, especially at a time when the Bank of Canada is eyeing its first interest rate increase since October 2018.Even though the vast majority of Canadian truckers are vaccinated, those who are not “are already starting to quit,” said Stephen Laskowski, president and chief executive of the CTA, adding that the industry is already short some 18,000 drivers.More than two-thirds of the C$650 billion ($511 billion) in goods traded annually between Canada and the United States travels on roads.”Everyone has been talking about inflation. And this is just going to continue to fuel that,” said Steve Bamford, chief executive of Bamford Produce, an importer and exporter of fresh fruit and vegetables based in Ontario.The cost of bringing a truckload of fruit and vegetables from California and Arizona doubled during the pandemic due to the existing driver shortage, Bamford said. Fresh foods are sensitive to freight problems because they expire rapidly.Supply chain disruptions drove Canada’s headline inflation rate to an 18-year high in November, and the Bank of Canada has signaled that it could hike it as soon as April.”We’re going to see prices skyrocket for groceries, for everything, if we see tens of thousands of truckers unemployed,” Conservative Party leader Erin O’Toole said on Thursday, adding there could be “reasonable accommodations” like regular testing.Interprovincial Affairs Minister Dominic LeBlanc attacked O’Toole on Friday for a “lack of leadership” on COVID-19 that “would only force more lockdowns and put Canadians at greater risk.”‘KEEP ON TRUCKING’Canada’s health ministry did not comment when asked if any accommodations might be made for unvaccinated drivers.Canada’s border agency, in response to a Reuters query, said unvaccinated truck drivers who are not Canadian would be turned back at the border starting on Jan. 15, possibly causing delays at the crossing. Canadian drivers will be allowed back into the country, but will be required to quarantine for 14 days.Vaccinated drivers will be allowed in and allowed to skip a pre-arrival molecular coronavirus test, the agency said. The Biden administration wants truck drivers at companies with 100 or more employees to be vaccinated or submit to weekly testing, a policy that has been challenged to the Supreme Court.In November, the price of food bought in Canadian stores increased 4.7% from a year earlier, the largest jump in seven years, and fresh vegetable prices rose even more due to higher shipping costs.”You’re going to see some impact on inflation and on the availability of goods on sale,” said Jimmy Jean, chief economist at Desjardins Group, adding that the mandate could trigger prices rises that prompt the central bank to raise rates quicker than expected.Joseph Sbrocchi, general manager of the Ontario Greenhouse Vegetable Growers association, said “this is not the time to create that zero-sum game for Canadians,” especially in winter months when so much fresh food is imported.Derek Holt, vice president of capital markets economics at Scotiabank, disagrees. “Keep on trucking with the vaccine mandates,” he said, warning there was a “bigger price for the economy and for the health system if you don’t get more people vaccinated now.” More

COLOMBO (Reuters) – Sri Lanka’s President Gotabaya Rajapaksa asked China to help restructure debt repayments as part of efforts to help the South Asian country weather a worsening financial crisis, his office said in a statement on Sunday. Rajapaksa made the request during a meeting with Chinese Foreign Minister Wang Yi in Colombo on Sunday.Sri Lanka has benefited from billions of dollars in soft loans from China but the island nation is currently in the midst of a foreign exchange crisis placing it on the verge of default, according to analysts.”The president pointed out that it would be a great relief to the country if attention could be paid on restructuring the debt repayments as a solution to the economic crisis that has arisen in the face of the COVID-19 pandemic,” Rajapaksa’s office said in the statement.China is Sri Lanka’s fourth biggest lender, behind international financial markets, the Asian Development Bank (ADB) and Japan.Over the last decade China has lent Sri Lanka over $5 billion for highways, ports, an airport and a coal power plant. But critics charge the funds were used for white elephant projects with low returns, which China has denied.Rajapaksa also requested China to provide “concessional terms” for its exports to Sri Lanka, which amounted to about $3.5 billion in 2020, the statement said, but did not give more details. Rajapaksa also proposed allowing Chinese tourists to return to Sri Lanka provided they adhere to strict COVID restrictions, including only staying at pre-approved hotels and visiting only certain tourist attractions. Before the pandemic China was Sri Lanka’s main source of tourists and the island imports more goods from China than from any other country.Sri Lanka is a key part of China’s Belt and Road Initiative (BRI), a long-term plan to fund and build infrastructure linking China to the rest of the world, but which others including the United States have labelled a “debt trap” for smaller nations.Sri Lanka has to repay about $4.5 billion in debt this year starting with a $500 million International Sovereign Bond (ISB)maturing on Jan. 18.A $1.5 billion yuan swap from China helped the island boost its reserves to $3.1 billion at the end of December. Debt repayment to China in 2022 is likely to be smaller than its ISB commitments of $1.54 billion, at about $400 million-$500 million, a Sri Lankan finance ministry source told Reuters. Sri Lanka’s central bank has repeatedly assured all debt repayments will be met and said funds for the January ISB has already been allocated. More

As part of a two-day visit to New Delhi, Trevelyan will hold bilateral talks with Indian Minister of Commerce and Industry Piyush Goyal on Thursday on green trade, the removal of market access barriers and other issues.They are also expected to confirm the launch of official negotiations on a new UK-India free trade deal, the trade department said in a statement.”The UK and India are already close friends and trading partners, and building on that strong relationship is a priority for 2022,” Trevelyan said in the statement.”I will be using my visit to drive forward an ambitious trade agenda which represents the UK’s Indo-Pacific tilt in action and shows how we are seizing global opportunities as an independent trading nation.” More

Like many countries, Germany has seen historically high prices of energy and related European carbon emissions permits which were triggered by the lifting of COVID-19 restrictions and resulting demand on depleted gas stocks.”We are working flat out on solutions for households that are now facing difficulties,” said the general secretary of the centre-left Social Democratic Party (SPD), Kevin Kuehnert in remarks authorised for publication on Sunday.”Our promise has always been that we will particularly protect people on a tight budget who find themselves suddenly caught out by social and global developments,” he added.The government would prefer “unbureaucratic and prudent” solutions tailored to individual needs, Kuehnert said.The coalition government was sworn in last month under leadership of SPD chancellor Olaf Scholz, and also includes the pro-spending, environmentalist Greens and the fiscally more conservative, libertarian Free Democrats (FDP).A newly installed Federal Ministry of Building has yet to deliver one-off heating support payments promised in the coalition agreement to help a few hundred thousands households receiving housing benefit.Finance minister Christian Lindner of the FDP on Thursday promised to make relevant finance available.Households depending entirely on income support (Hartz-IV)are paid their heating costs fully.Half of German households heat with gas and a quarter with heating oil.As for electricity and gas, the minister for environment and consumer protection, Steffi Lemke, told Reuters she would clamp down on suppliers who tried to profiteer from contract expiries, competitor insolvencies and people moving house.New contracts for the latter group have doubled in price.”Even if procurement costs rise, such horrific price increases are not justified,” said Lemke. More

Will US consumer price inflation hit another 40-year high?The rise in US consumer prices is likely to have reached another four-decade high in December, capping a year of rampant inflation fuelled by supply chain logjams, labour shortages and strong spending.Economists polled by FactSet anticipate a 0.5 per cent month-to-month increase in the consumer price index when the Bureau of Labor Statistics releases its report on Wednesday. That would leave CPI inflation up 7.1 per cent year on year, which would represent the biggest annual increase since February 1982. In November, consumer prices were up 6.8 per cent on an annual basis and 0.8 per cent against the previous month.Price increases accelerated for much of 2021, prompting officials at the Federal Reserve to ponder earlier and faster interest rate increases as the central bank unwinds the economic support it implemented at the beginning of the coronavirus crisis.Minutes from the Fed’s most recent policy meeting noted that supply chain disruptions and labour shortages are likely to last longer than officials initially predicted, adding to signs that elevated consumer prices may be here to stay even if inflation cools off in 2022.“Inflation looks close to peaking, as the collision of large demand driven by federal stimulus fades and supply chain problems moderate,” said Brad McMillan, chief investment officer for the Commonwealth Financial Network. “With lower demand and greater supply, we should see price changes start to normalise in 2022.”Analysts at the Wells Fargo Investment Institute recently forecast that annual CPI inflation will average 5.3 per cent this year alongside two interest rate increases by the Fed. Matthew RoccoDid monthly UK GDP growth pick up before Omicron took hold?The UK’s economic recovery is expected to have accelerated in November before the spread of the Omicron coronavirus variant hit the country, possibly reaching pre-pandemic levels for the first time since the onset of the crisis.Bethany Beckett, economist at Capital Economics and Ellie Henderson, economist at Investec, both expect the country’s gross domestic product to have expanded by 0.5 per cent between October and November, when data is released on Friday, marking gathering momentum from near stagnation in October.Supply-chain disruptions that held back manufacturing production in October “remained rife in November, easing only a tad”, said Henderson. However, she thinks “there should have been some rebound in mining and quarrying and utilities”, and construction output “may have recovered partially after its October fall”.With people returning to workplaces and city centres, and with Christmas shopping taking place earlier, output in the services sector is also expected to have accelerated to 0.5 per cent growth in November.If such projections are confirmed, the monthly measure of UK GDP could have returned to levels not seen since February 2020.But momentum looks poised to slow temporarily for December, as the spread of Omicron discouraged or interrupted certain areas of economic activity even without legal restrictions in place. With surging Covid infections, output may have shrunk about 0.8 per cent in December, according to Beckett.“Not only does demand appear to have been affected by mounting Omicron cases, but staff shortages are also disrupting production in certain areas,” said Henderson. Valentina RomeiWhat next for European gas prices after December’s wild ride?Even in a year in which a rebounding global economy and constrained supply drove an unprecedented rally in global gas prices, December stood out.In the week before Christmas, futures contracts linked to Europe’s wholesale gas price, already at a record high, soared to more than €180 per megawatt hour as weak confidence in Russian supply got even weaker.Such was the strength of the rally that ships carrying liquefied natural gas originally destined for Asia changed course mid-voyage. In total, an estimated 7.3m tonnes of LNG was delivered to Europe in December, according to consultancy Rystad Energy.The imports, aided by warmer than expected weather forecasts, worked. By January 4, European prices had stabilised at about €90 per megawatt hour, though still up about 350 per cent from the same time last year.The volatility is unlikely to be over soon. Rystad predicts that weak gas flows from Russia into western Europe will continue while the confrontation over Ukraine persists, leading to “continued elevated prices”.European storage levels, meanwhile, remain low, leaving the continent with little room to manoeuvre as it watches the weather forecasts for any signs of colder temperatures.In Asia, the outlook is less concerning, with large LNG inventories in place in several countries and current forecasts for temperatures at or above normal in the coming weeks. Tom Wilson More