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FARMING

Norwegian firm warns high gas prices could impact food production

Soaring prices for natural gas, a key feedstock for producing chemical fertilisers, will weigh on food production and security, a major Norwegian manufacturer warned Wednesday.

Rising gas prices could make food more expensive, Norwegian firm Yara has said. Pictured is the fruit isle on supermarket shelves.
Rising gas prices could make food more expensive, Norwegian firm Yara has said. Pictured is the fruit isle on supermarket shelves.Photo by gemma on Unsplash

Norway-based Yara said that a near fifteenfold rise in European natural gas prices had forced it to reduce its production of ammonia, a key fertiliser component.

“European nitrogen production is essential to global food security, and we are therefore concerned about the impact current European natural gas prices will have, especially for the world’s poorest regions,” chief executive Svein Tore Holsether said in a statement.

As prices for fertilisers rise in the wake of those for natural gas, farmers will be tempted and perhaps forced to cut back on their use. As a consequence, production of food crops could drop.

Holsether pledged Yara will do its utmost to supply farmers and support global food production.

However, he said, “the current situation clearly demonstrates the need for more resilient food supply chains” and called on both government and industry to work together to secure the global food supply.

Rising prices helped Yara’s results overall in the third quarter, with headline sales rising by 46 percent to nearly $4.5 billion.

Operating earnings also improved, but adverse currency effects and writing down the value of a phosphate mining project pushed the firm into a net loss of $143 million.

It earned a net profit of $340 million in the third quarter. Yara shares were up 1.5 percent in afternoon trading, while the main OBX  index was up 1.4 percent.

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FARMING

WTO rules US tariffs on Spanish olives breach rules

A US decision to slap steep import duties on Spanish olives over claims they benefited from subsidies constituted a violation of international trade rules, the World Trade Organisation ruled Friday.

WTO rules US tariffs on Spanish olives breach rules
Farmers had just begun harvesting olives in southern Spain when former US President Donald Trump soured the mood with the tariffs' announcement. Photo: Jorge Guerrero/AFP

Former US president Donald Trump’s administration slapped extra tariffs on Spain’s iconic agricultural export in 2018, considering their olives were subsidised and being dumped on the US market at prices below their real value.

The combined rates of the anti-subsidy and anti-dumping duties go as high as 44 percent.

The European Commission, which handles trade policy for the 27 EU states, said the move was unacceptable and turned to the WTO, where a panel of experts was appointed to examine the case.

In Friday’s ruling, the WTO panel agreed with the EU’s argument that the anti-subsidy duties were illegal.

But it did not support its stance that the US anti-dumping duties violated international trade rules.

The panel said it “recommended that the United States bring its measures into conformity with its obligations”.

EU trade commissioner Valdis Dombrovskis hailed the ruling, pointing out that the US duties “severely hit Spanish olive producers.”

Demonstrators take part in a 2019 protest in Madrid, called by the olive sector
Demonstrators take part in a 2019 protest in Madrid called by the olive sector to denounce low prices of olive oil and the 25 percent tariff that Spanish olives and olive oil faced in the United States. (Photo by PIERRE-PHILIPPE MARCOU / AFP)
 

“We now expect the US to take the appropriate steps to implement the WTO ruling, so that exports of ripe olives from Spain to the US can resume under normal conditions,” he said.

The European Commission charges that Spain’s exports of ripe olives to the United States, which previously raked in €67 million ($75.6 million) annually, have shrunk by nearly 60 percent since the duties were imposed.

The office of the US Trade Representative in Washington did not immediately comment on the ruling.

According to WTO rules, the parties have 60 days to file for an appeal.

If the United States does file an appeal though, it would basically amount to a veto of the ruling.

That is because the WTO Appellate Body — also known as the supreme court of world trade — stopped functioning in late 2019 after Washington blocked the appointment of new judges.

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