Economy

(Reuters) -Beyond Meat Inc forecast annual revenue below estimates on Thursday, hitting its share price, as it faced stiffer competition amid flat demand for plant-based protein.The California-based company said it expects revenue of $560 million to $620 million for 2022, compared with estimates of $637.3 million, according to Refinitiv IBES data.Sales to U.S. grocers, convenience stores and other retailers declined 19.5% in the fourth quarter ended Dec. 31.Rivals including Tyson Foods (NYSE:TSN) and Kellogg (NYSE:K) recently entered the fray with big discounts to get more people to trial their products.U.S. retail sales in the plant-based meat category fell 0.4% last year versus 45% growth in 2020, Beyond Meat (NASDAQ:BYND) Chief Executive Officer Ethan Brown said during an earnings call.”We experienced intense increased competition during the period when the size of the prize did not expand,” he said.Those remarks echoed comments made by rival Maple Leaf Foods Inc, parent of Lightlife Foods, earlier on Thursday.Maple Leaf Chief Operating Officer Curtis Frank said during an earnings call that many consumers tried plant-based proteins early on but did not repeat purchases.Beyond Meat posted a larger than expected loss of $1.27 per share in the fourth quarter, versus estimates for a loss of 71 cents, as it spent heavily on marketing and incurred high manufacturing costs due to supply chain disruptions.Net revenue was $100.7 million in the quarter, compared with $101.9 million a year earlier. Analysts polled by Refinitiv had expected $101.4 million.Brown said growth should resume this year, in part as Beyond Meat executes on partnerships with McDonald’s Corp (NYSE:MCD) and KFC and launches a new product line with PepsiCo (NASDAQ:PEP) Inc in coming weeks – which Brown said he was snacking on during the call. More

WASHINGTON (Reuters) – World Bank President David Malpass said on Thursday the lender stands ready to provide immediate support to Ukraine amid “shocking violence and loss of life,” and is preparing options for fast-disbursing financing.Malpass said in a statement he has mobilized the World Bank Group’s Global Crisis Risk platform to coordinate a response to the invasion among the lender’s various divisions. More

BRASILIA (Reuters) – Brazil’s central bank said it is prepared to act in the exchange market in case of disproportionate contamination on prices, highlighting it is paying close attention to recent developments abroad after Ukraine’s invasion by Russia. The central bank’s Financial Stability Committee, which met on Thursday, also stressed that the national financial system exposure to the effects of current international geopolitical tensions is “low”, given the country’s reduced currency exposure and dependence on external funding.”The Committee is attentive to the recent evolution of the international scenario and remains prepared to act, minimizing any disproportionate contamination on the prices of local assets, in particular through the exchange market channel,” it wrote in a statement.According to the central bank, “loan portfolio continues to perform well, provisions for credit losses are adequate and banks remain liquid and well capitalized.” Earlier on Thursday, Brazilian Treasury Secretary Paulo Valle also said the country is well-positioned to face any international volatility.The Brazilian real fell 1.99% against the dollar in reaction to a surge in global risk aversion. Still, it remains among the world’s best-performing currencies to year-to-date, with financial inflows being attracted by cheap equity valuations and high debt yields amid an aggressive monetary tightening to tame double-digit inflation.Policymakers have hiked the country’s benchmark interest rate to 10.75% from its record-low of 2% last March and already signaled the need for additional increases. More

FRANKFURT (Reuters) -Volkswagen and its top shareholder Porsche SE on Thursday fleshed out details of a possible listing of luxury carmaker Porsche, edging closer to what could become one of the world’s largest stock market debuts.In case of an initial public offering, the share capital of Porsche AG would be equally split into preferred and ordinary shares and up to a quarter of the preferred stock would be placed on the market, Volkswagen (DE:VOWG_p) said, confirming an earlier Reuters story.This implies a potential placement and free float of up to 12.5% of Porsche AG’s total share capital, or more than 10 billion euros ($11.2 billion) when using a valuation of around 90 billion.Ordinary shares, which would solely be owned by Volkswagen and Porsche SE under the plans, would not be publicly listed, a spokesperson said.”The automotive industry is changing fundamentally. Volkswagen is determined to play a leading role in a world of zero-emission and autonomous mobility,” Volkswagen Chief Executive Herbert Diess said.”An IPO of Porsche AG would give us additional flexibility to further accelerate the transformation. Porsche AG would gain more entrepreneurial freedom and at the same time continue to benefit from group synergies.”According to the framework agreement, Porsche SE, which owns a 31.4% equity stake in Volkswagen and 53.3% of the voting rights, would buy 25% plus one share of Porsche AG’s ordinary shares from Volkswagen at a 7.5% premium to the placement price of the preferred shares.The would give the Porsche and Piech families, which control Porsche SE, a blocking minority in the listed carmaker that was founded by their ancestor Ferdinand Porsche in 1931.Volkswagen said it would propose that shareholders, which apart from Porsche SE include Qatar and the German state of Lower Saxony, receive 49% of the gross proceeds the carmaker will generate via the sale of preferred and ordinary shares.Qatar, which owns 14.6% in Volkswagen and 17% of its voting rights, would also become a strategic investor in Porsche AG’s preferred shares in case of an IPO, Volkswagen said.Stephan Weil, state premier of Lower Saxony, Volkswagen’s third-largest shareholder, said the state was supporting the presented framework agreement.($1 = 0.8935 euros) More

Joe Biden has significantly ratcheted up pressure on Russia’s economy by cutting off the country’s biggest bank, Sberbank, from the US financial system.Sberbank accounts for close to a third of Russia’s banking sector. The lender and four other financial institutions that the US targeted on Thursday oversee about $1tn in assets in total.“The sanctions we imposed exceed anything that’s ever been done,” the US president said on Thursday. “The sanctions we imposed have generated two-thirds of the world joining us. They are profound sanctions.”The sanctions, imposed in response to Russia’s invasion of Ukraine, restrict Sberbank’s access to US dollar transactions. The US also froze assets at four other Russian banks including its second-biggest lender, VTB, as well as three midsize players, Bank Otkritie, Sovcombank OJSC and Novikombank.“What we’re doing is we’re trying to hit the Russian economy where we think it will hurt the most, and where we will limit the impact on the United States and our partners, but we also have the ability to escalate these steps against these institutions going forward,” a senior US administration official said. But the US stopped short of imposing such harsh restrictions on Gazprombank, Russia’s third-largest bank. The state-controlled lender is the main conduit for foreign payments for oil and gas.Cutting off Gazprombank from dealing in US dollars would have had significant repercussions for Europe, which relies on Russia for 40 per cent of its natural gas supply and 26 per cent of oil.Although Russian banks remained on the Swift messaging system, Biden said there was still the option of cutting them from the global payments initiative that lies at the centre of global trade and facilitates trillions of dollars worth of transactions a day.World leaders are divided over whether to cut Russia from Swift, which would deliver a heavy blow to its banks and its ability to trade beyond its borders.Boris Johnson, the UK prime minister, has pushed “very hard” for such a move, although he has faced resistance from Olaf Scholz, the German chancellor, according to officials in both governments. “These sanctions will have a significant impact on Russia’s overall economy, and average Russians will feel the cost,” said Clay Lowery, executive vice-president for the Institute of International Finance.“These sanctions target Russia’s domestic financial system, causing bank runs and forcing Russia’s central bank to continue hiking rates. As a result, we are likely to see negative growth in an economy that has already been hindered by increasing isolationism.”Earlier on Thursday, Johnson added Russia’s second-biggest bank, VTB, to Britain’s sanctions list but stopped short of including Sberbank. VTB accounts for 16.4 per cent of Russia’s banking assets, compared with Sberbank’s 32.6 per cent.

“Sanctioning other retail banks like VTB and Sberbank will cause significant havoc but ordinary Russian citizens will also pay the price,” said Paul Feldberg, a partner in the investigations, compliance and defence group at law firm Jenner & Block.One in two Russians has an account at Sberbank. Cutting the bank’s access to dollar transactions will have a severe impact on the Russian economy’s ability to do business outside its borders.More than half of Russian exports are denominated in US dollars, down from 80 per cent at the end of 2013. That is equivalent to $300bn, or 19 per cent of gross domestic product, according to Fitch. Sberbank’s share price dropped more than 50 per cent on Thursday as the market expected Russia’s economy to suffer following its invasion of Ukraine and for the west to consider sanctions against its biggest banks.Sberbank said on Thursday night that its systems and offices were working as normal and that clients’ funds were wholly available to them.“Sberbank is closely studying new working conditions amid the sanctions related to correspondent accounts. The adopted restrictions do not affect the safety and availability of client funds,” it said. “Sberbank has all necessary resources, managerial experience and expertise for operating in the current environment.”Additional reporting by Aime Williams in Washington

Video: Russia begins invasion of Ukraine More

Federal Reserve officials are turning a wary eye to Russia’s invasion of Ukraine, though several have signaled in recent days that geopolitical tensions are unlikely to keep them from pulling back their support for the U.S. economy when the job market is booming and prices are climbing rapidly.Stock indexes are swooning, and the prices of key commodities — including oil and gas — have risen sharply and could continue to rise as Russia, a major producer, responds to American and European sanctions.That makes the invasion a complicated risk for the Fed: On one hand, its fallout is likely to further push up price inflation, which is already running at its fastest pace in 40 years. On the other, it could weigh on growth if stock prices continue to plummet and nervous consumers in Europe and the United States pull back from spending.The magnitude of the potential economic hit is far from certain, and for now, central bank officials have signaled that they will remain on track to raise interest rates from near zero in a series of increases starting next month, a policy path that will make borrowing money more expensive and cool down the economy.Loretta Mester, president of the Federal Reserve Bank of Cleveland, said during a speech on Thursday that she still expected it “will be appropriate to move the funds rate up in March and follow with further increases in the coming months.”But she noted that the invasion could inform how quickly the Fed moved over a longer time frame.“The implications of the unfolding situation in Ukraine for the medium-run economic outlook in the U.S. will also be a consideration in determining the appropriate pace at which to remove accommodation,” Ms. Mester said.Her comments were in line with those that many of her colleagues have made this week, including on Thursday after the invasion: Central bankers are monitoring the situation, but with inflation rapid and likely to head higher yet, they are not preparing to cancel their plans to pull back economic support.“I see the geopolitical situation, unless it would deteriorate substantially, as part of the larger uncertainty that we face in the United States and our U.S. economy,” Mary C. Daly, president of the Federal Reserve Bank of San Francisco, said Wednesday at an event hosted by the Los Angeles World Affairs Council. “We’ll have to navigate that as we go forward.”But Ms. Daly said she did not “see anything right now” that would disrupt the Fed’s plan to lift interest rates.Thomas Barkin, president of the Federal Reserve Bank of Richmond, said during an appearance Thursday that “time will tell” if the policy path needed to adjust. Raphael Bostic, president of the Federal Reserve Bank of Atlanta, said during a separate speech on Thursday that it was not his baseline expectation that the Ukraine conflict would affect the timing of the central bank’s first rate increase.Even if it is not enough to shake the Fed from its course, some analysts are warning that the fallout of the conflict could be meaningful.“Normally geopolitical crises ultimately turn out to be a fade for financial markets and a buying opportunity for investors willing to look past the headlines,” Krishna Guha at Evercore ISI wrote in a research note Thursday morning. “We are very wary of taking that line today.”Mr. Guha noted that the invasion could disrupt the post-Cold War world order and warned that the jump in energy prices and fallout from sanctions “will complicate the ability of central banks on both sides of the Atlantic to engineer a soft landing from the pandemic inflation surge.”Economists have been warning that a “soft landing” — in which central banks guide the economy onto a sustainable path without causing a recession — might be difficult to achieve when prices have taken off and monetary policies across much of Europe and North America may need to readjust substantially.“The shock of war adds to the enormous challenges facing central banks worldwide,” Isabel Schnabel, an executive board member at the European Central Bank, said during a Bank of England event on Thursday. She added that policymakers were monitoring the situation in Ukraine “very closely.”Inflation is high around much of the world, and though it is slightly less pronounced in Europe, and E.C.B. policymakers are reacting more slowly to it than some of their global counterparts, recent high readings there have prompted some officials to edge toward policy changes.In America, the Fed has sometimes reacted to global problems by cutting borrowing costs, making money cheaper and easier to obtain, rather than by lifting interest rates and making credit conditions tighter. But economists said this time was likely to be different.Russia’s Attack on Ukraine and the Global EconomyCard 1 of 6A rising concern. More

Europe faces a new refugee crisis, and harsh economic penalties to punish Russia are expected to reverberate worldwide.WASHINGTON — Much of the world woke up on Thursday to the specter of an all-out war in Europe after President Vladimir V. Putin of Russia ordered his troops to invade Ukraine. That left millions of people — in Ukraine and Eastern Europe, but also in the United States and elsewhere — wondering how the conflict would affect their lives.At least 40 Ukrainian solders were reported killed in the hours after the invasion, with estimates of tens of thousands of deaths over the course of the conflict. But beyond the anticipated bloodshed, economic penalties to punish Russia will reverberate worldwide.Rising energy costs and potentially slowing supply chains will take their toll on consumers. Russian cyberattacks could cripple electronic infrastructure. A new refugee crisis will require international assistance. And an era of relative calm in the West that has pervaded since the end of the Cold War might be coming to a close.Here is what might happen next on the military, economic and diplomatic fronts.More military forces head to NATO’s eastern borders.Many of the U.S. troops who arrived in Poland this month have been working with Polish forces to set up processing centers to help people fleeing Ukraine.Czarek Sokolowski/Associated PressNATO announced on Thursday that it was sending reinforcements to its eastern flank, joining some 6,500 U.S. troops the Pentagon has already dispatched to Eastern Europe and the Baltics.“We are deploying additional defensive land and air forces to the eastern part of the alliance, as well as additional maritime assets,” NATO said in a statement. “We have increased the readiness of our forces to respond to all contingencies.”The Pentagon is also repositioning about 1,000 troops in Europe. About 800 U.S. troops are moving to the Baltics from Italy; 20 Apache helicopters are heading to the Baltics from Germany, and 12 Apaches are going to Poland from Greece. Eight F-35 strike fighters are heading to Lithuania, Estonia and Romania from Germany, the Pentagon said.In addition, U.S. Army troops, including those from the 82nd and 101st Airborne divisions, are preparing to move closer to Poland’s border with Ukraine to help process people fleeing the country, an Army spokesman said on Thursday.Many of the 5,500 troops from the 18th Airborne Corps who arrived in Poland this month have been working with the State Department and Polish forces to set up three processing centers near the border to help deal with tens of thousands of people, including Americans, who are expected to flee Ukraine.In Jasionka, Poland, an indoor arena has been outfitted with bunk beds and supplies for up to 500 people; U.S. officials say that capacity could be quickly expanded. In Austria, Chancellor Karl Nehammer said on Wednesday that he was prepared to accept refugees. The State Department and the U.S. Agency for International Development are funding relief organizations that are currently providing food, water, shelter and emergency health care to people in the region who have fled to escape the violence.In the days to come, the C.I.A. will assess what kind of assistance it can provide to Ukraine. If a Ukrainian resistance develops in parts of the country that Russia seeks to control, the agency could secretly supply partisan forces with intelligence and, potentially, armaments.“We need to support the resistance to the invasion and the occupation in all ways possible,” said Mick Mulroy, a former C.I.A. paramilitary officer and senior Pentagon official in the Trump administration. “Our special operations and intelligence assets with an extensive knowledge base from 20 years of fighting insurgencies should be put to immediate use.”‘Severe’ sanctions from the U.S. and Europe.The Treasury Department is likely to put one or more Russian state-owned banks on the agency’s list for the harshest sanctions.Natalia Kolesnikova/Agence France-Presse — Getty ImagesPresident Biden on Thursday plans to announce “severe sanctions” against Russia to try to deter Moscow from carrying out further violence in Ukraine and to punish it for its actions, U.S. officials said.The next set of economic sanctions is expected to be much harsher than what U.S. officials had described as a first tranche that was imposed on Monday and Tuesday. Mr. Biden is likely to order the Treasury Department to put one or more large Russian state-owned banks on the agency’s list for the harshest sanctions, known as the S.D.N. list. That would cut off the banks from commerce and exchanges with much of the world and affect many other Russian business operations.The Biden administration said on Tuesday that it was imposing that kind of sanctions on two banks, VEB and PSB, but those are policy banks with no retail operations in Russia.Administration officials have studied how sanctions would affect each of the big banks, including Sberbank and VTB, Russia’s two largest banks. Sberbank has about a third of the assets in the country’s banking sector, and VTB has more than 15 percent. Some experts are skeptical that the administration would put those two banks on the S.D.N. list for fear of the consequences for the Russian and global economies. For now, U.S. officials are not ready to cut off all Russian banks from Swift, the important Belgian money transfer system used by more than 11,000 financial institutions worldwide.The Treasury Department has other sanctions lists that would impose costs while inflicting less widespread suffering. For example, it could put a bank on a list that prevents it from doing any transactions involving dollars. Many international commercial transactions are done in U.S. dollars, the currency that underpins the global economy.The Treasury Department is also expected to put more Russian officials, businesspeople and companies on the sanctions lists.By Thursday afternoon in Russia, the nation’s stock market had fallen nearly 40 percent.The Commerce Department has been making plans to restrict the export of certain American technologies to Russia, a tactic that the Trump administration used to hobble Huawei, the Chinese telecommunications company. The controls would damage the supply chain for some Russian sectors. U.S. officials said their targets included the defense industry and the oil and gas industry.European officials are expected to announce sanctions similar to many of the ones planned by the United States, as they did this week. However, they have been more wary of imposing the harshest sanctions because of the continent’s robust trade with Russia.Although Mr. Biden has said he will contemplate any possible sanctions, U.S. officials for now do not plan big disruptions to Russia’s energy exports, which are the pillar of the country’s economy. Europe relies on the products, and surging oil prices worldwide would cause greater inflation and more problems for politicians. However, Germany announces this week that it would not certify Nord Stream 2, a new natural gas pipeline that connects Russia and Western Europe. On Wednesday Mr. Biden announced sanctions on a subsidiary of Gazprom, the large Russian energy company, which built the pipeline and had planned to operate it.Understand Russia’s Attack on UkraineCard 1 of 7What is at the root of this invasion? More

Global food prices are set to soar still further after Russia’s attack on Ukraine threatened supply chains, pushing up commodities markets that had already hit multiyear highs.Russia and Ukraine together account for a third of the world’s wheat exports, a fifth of its corn trade and almost 80 per cent of sunflower oil production, according to the US Department of Agriculture.The attack has led to a ban on all commercial vessels in the inland sea of Azov — which connects to the Black Sea — and the closure of Ukrainian ports. Some 90 per cent of Ukrainian grain exports are transported by sea and the disruption is expected to wreak havoc on food supply flows, said analysts. Wheat prices have risen by more than a fifth since the start of the year to near 10-year highs, while corn prices have risen 15 per cent. The disruption to supplies and the scramble to find alternative sources of grain will hit supply chains already struggling with high demand and rising prices because of poor harvests in key exporting countries such as Canada. “The food price inflation risk stemming from this conflict appears acute,” said Helima Croft, analyst at RBC.Clive Black, analyst at UK brokers Shore Capital, said: “The current events in Ukraine absolutely lead us to be thinking about the supply chain and inflation outlook with growing concern.”With Ukraine and Russian inventories of wheat and other grains still waiting to be shipped, analysts said prices would rise further. If a substantial share of the Russian and Ukrainian grain fails to be shipped, wheat prices could rise to levels not seen since the crisis in 2007-08 when soaring grain prices triggered riots in some countries, according to Andrey Sizov at Moscow grains research firm Sovecon. Ukraine is known as the “breadbasket of Europe” and many countries in the Middle East and north Africa are also heavily reliant on it for wheat supplies. Any disruption in supply would have a severe impact on food security in a number of countries, according to US think-tank Center for Strategic and International Studies.Lebanon imports 50 per cent of its total wheat consumption from Ukraine, followed by Libya at 43 per cent, Yemen at 22 per cent, and Bangladesh at 21 per cent. “For the 14 countries where Ukrainian wheat is an essential import, almost half already suffer from severe food insecurity,” said Caitlin Welsh, the director of global food security at CSIS.Other countries reliant on Ukraine and Russia for grain supplies include Egypt, the world’s largest wheat importer, where the two countries accounted for 86 per cent of its wheat imports by value in 2020, and Turkey, where 75 per cent of its overseas purchases of wheat came from Ukraine and Russia. Egypt had wheat inventories until November and had also been diversifying its sources, according to the country’s supply ministry.For China, about a third of its corn imports come from Ukraine and are used to feed the world’s largest hog herd. “People have corn cargoes booked out of Ukraine,” said Darin Friedrichs co-founder of agricultural research group Sitonia Consulting in Shanghai. Any disruption to those shipments would force Chinese hog producers to scramble for alternative sources including US farms. The food industry, especially in Europe and the UK, will also be hit by rising energy prices.The further rise in prices for natural gas, the main ingredient of fertiliser, will affect food prices if farmers cannot afford the increase in costs, and could hit crop quality and production if they cut use. Yara, a Norwegian fertiliser company, said in its latest results announcement that high gas prices were a challenge for the industry in Europe, adding to “global food security concerns in a situation with already tight supply across the main nutrients”.Additional reporting by Heba Saleh in Cairo and Harry Dempsey in London More