Commercial Metals Company (CMC) Q1 2021 Earnings Call Transcript

Commercial Metals Company (NYSE:CMC)
Q1 2021 Earnings Call
Jan 11, 2021, 11:00 a.m. ET

Contents:

• Prepared Remarks
• Questions and Answers
• Call Participants

Prepared Remarks:

Operator

Hello and welcome, everyone, to the first-quarter fiscal 2021’s earnings call for Commercial Metals Company. Today’s call is being recorded. [Operator instructions] I would like to remind all participants that during the course of this conference call, the company will make statements that provide information other than historical information and will include expectations regarding economic conditions and the impact of COVID-19, effects of legislation, U.S. steel import levels, U.S.

construction activity, demand for finished steel products, the company’s future operations, the company’s future results of operations, and capital spending. These and other similar statements are considered forward-looking statements and may include — involve forecasts and are subject to risks and uncertainties that could cause actual results to differ materially from these expectations. These statements reflect the company’s beliefs based on current conditions but are subject to certain risks and uncertainties including those that are described in the risk factors and forward-looking statements disclaimer section of the company’s latest annual report on Form 10-K and subsequent quarterly reports on Form 10-Q. Although these statements are based on managing expectations and beliefs, CMC offers no assurance that these expectations or beliefs will prove to be correct and actual results may vary materially.

All statements are made only as of this date. Except as required by law, CMC does not assume any obligation to update, amend, or clarify these statements in connection with future events, changes in assumptions, the occurrence of anticipated or unanticipated events, new information or circumstances, or otherwise. Some numbers presented are historical non-GAAP financial measures and reconciliation for such numbers can be found in the company’s earnings release or on the company’s website. Some numbers presented or forward-looking non-GAAP financial measures and reconciliations are not provided due to the unavailability of forward-looking reconciling information.

Unless stated otherwise, all references made to year or quarter-end are references to the company’s fiscal year or fiscal quarter. And now for the opening remarks and introduction, I will turn the call over to the chairman of the board, president, and chief executive officer of Commercial Metals Company, Miss Barbara Smith.

Barbara Smith — Chairman of the Board, President, and Chief Executive Officer

Good morning and welcome to our first-quarter earnings conference call. I’d like to wish everyone on the line a Happy New Year and extend my thanks to CMC’s 11,500 employees for another great quarter. I’ll begin the call with brief comments on our first-quarter results before providing some color regarding the current market environment and how CMC is positioned to succeed. I will also give an update on CMC’s strategic growth initiatives.

Paul Lawrence will then cover the quarter’s financial information in more detail and I will conclude our prepared remarks with a discussion of our outlook for the second quarter of fiscal 2021, after which we will open the call to questions. As announced in our earnings release this morning, we reported fiscal first-quarter 2021 earnings from continuing operations a $63.9 million or $0.53 per diluted share on net sales of $1.4 billion. Excluding the impact of certain charges which Paul will cover in more detail, our adjusted earnings from continuing operations were $69.8 million or $0.58 per diluted share. CMC generated core EBITDA of $156.6 million marking the seventh consecutive quarter near or above the $150 million level.

This record underscores not only our company’s enhanced earnings capability compared to past periods, but also the stability provided by our integrated value chain. Activity levels in CMC’s core end markets remained strong during the first quarter leading to an increase in the company’s finished steel shipments compared to a year ago. In North America, demand for rebar from our mills was driven by resilient construction activity as contractors continue to work off the healthy backlogs they carried into the pandemic. Demand for merchant products benefited from the ongoing recovery of domestic industrial productions, as well as a lean supply chain following heavy service center destocking in April and May.

Demand for CMC’s long products in Europe also remained strong during the first quarter. Residential construction in Poland continued to be strong and grew by 7% compared to a year ago, fueling rebar consumption. Meanwhile, demand for merchant and wire rod products was supported by recovering automotive and industrial production in Poland and Germany. Manufacturing PMI indices for both countries have consistently indicated growth since July.

I would like to now spend a few moments discussing the current and near-term market environment. On earnings call in October, we highlighted elevated levels of uncertainty. Market uncertainty continues to persist. The prospect of future COVID-related lockdowns and their potential impact on the economy has led to hesitation among project owners to award new work.

However, in recent weeks, we’ve seen more willingness to move projects forward. We’ve also seen a rapid increase in global prices for steel and steelmaking raw materials. Domestic scrap has been particularly impacted, increasing significantly since the end of our fiscal fourth quarter. The current elevation in scrap pricing appears to be driven primarily by increased global demand, particularly China, and by near-term shortages as underutilized steel plants increased production levels.

While the extent and duration of this rally is difficult to predict, it will certainly pressure margins in the near term on both our steel and downstream products. As we outlined during our Investor Day, CMC is built to weather turbulence and is structured to endure periods of volatility. Our vertical value chain and integration provide the CMC with sources of strength at any point in the economic and steel price cycle. Our approach to operational excellence and optimization ensures that CMC is lean and efficient, and our team is always looking for further improvements.

Let me give you a few examples of how CMC has responded to the current environment. In order to maintain metal spreads, we have responded to rapidly rising scrap costs with several rounds of announced price increases on each of our mill products. In addition, synergies we achieved following our fiscal 2019 rebar asset acquisition, as well as our ongoing network optimization efforts have reduced CMC’s cost structure meaningfully. During the first quarter, our controllable cost per ton of finished steel were 10% below the levels immediately following the transaction.

This represents the cost incurred throughout CMC’s vertical value chain from the scales at our recycling yards all the way to the shipment of downstream products from our fabrication facilities. These cost reductions are significant and fall directly to our bottom line. In Europe, our team reduced per-ton controllable costs by roughly 10% compared to the prior year, which is a remarkable feat given our belief that this was already one of the lowest-cost mills in the world. Even at the recent depressed metal margin level of $200 per ton, our European operation is generating segment-adjusted EBITDA at an annualized rate of $55 million to $60 million.

Fact that CMC Europe is succeeding in the current challenging environment gives us confidence that it will thrive in better times. The first-quarter margin over scrap was nearly an eight-year low and was $25 per ton below the long-term average. A return to mid-cycle levels would add $30 million to $35 million of annualized segment-adjusted EBITDA. Factors driving uncertainty in our markets have led to some erosion in the volume of work within CMC’s downstream backlog.

As previously mentioned, customers have delayed awarding projects. However, in recent weeks, bookings have ticked up and the backlog is starting to stabilize. Looking beyond the near-term uncertainty, longer-term indicators remain encouraging. The amount of potential work that downstream customers are asking us to quote remains strong, indicating a robust project pipeline.

Our commercial teams continue to report that project owners, though currently hesitant to book work, are optimistic about future conditions. External indicators also point to reasons for confidence. Residential construction, which generally leads non-residential and local infrastructure by 12 to 24 months, is very strong. The regional population shift into CMC’s core geographical markets has accelerated during the last year, boding well for medium- to long-term activity.

Additionally, the Portland Cement Association recently revised their 2021 and 2022 estimates for cement consumption growth upward roughly 1% and 2%, respectively. ECA is a forecast provider we have highlighted in the past as having the highest correlation to domestic rebar shipments. Now, I’d like to provide a quick update on recent strategic announcements. In conjunction with our announcement last August of construction of our third technologically advanced micro mill, we announced that we would eventually curtail all operations at our Rancho Cucamonga site.

At the end of December, we ceased production at the mill while maintaining full service to our customers. Operational changes and logistics were carefully planned and we have experienced a seamless transition thus far. I would like to acknowledge and thank all of the CMC employees at the Rancho site for their service and professionalism through this difficult decision to cease operations. During the quarter, we made significant progress on the construction of our third rolling mill in Poland.

The equipment and support utilities are now being installed. We expect to begin testing equipment in a few months and continue to target commercial productions later this fiscal year. As indicated during our last earnings call, total project costs should be under our original budget of $80 million. Once operational, the third rolling line will allow our facility to utilize 200,000 tons of current excess mill capacity by converting it to higher value-add finished product.

This will further increase our production flexibility and leverage fixed melt shop costs. Construction of our new MBQ-capable micro mill in our third rolling line in Poland in conjunction with our ongoing network optimization efforts and other smaller organic projects is expected to add approximately $135 million through-the-cycle EBITDA over the next few years. Before turning the call over to Paul, I will briefly mention efforts CMC is undertaking regardless — regarding sustainability. Sustainability is core to CMC and has been since our founding as a recycling company 105 years ago.

Good business and good environmental stewardship are fully aligned at our company that’s been demonstrated by our adoption of the cleanest steelmaking technologies and our recent announcements of increased sourcing of renewable energy. In addition, to better communicate CMC’s strong ESG performance, we are planning to offer new disclosures over the course of calendar 2021. Finally, as stated in our press release, the board of directors declared a quarterly cash dividend of $0.12 per share as CMC common stock for stockholders of record on January 21, 2021. Dividend will be paid on February 4, 2021.

This represents CMC’s 225th consecutive quarterly dividends. That is an overview. I will now turn the discussion over to Paul Lawrence, vice president, and chief financial officer, to provide more comments on the results for the quarter.

Paul Lawrence — Vice President and Chief Financial Officer

Thank you, Barbara, and good morning to everyone joining on the call today. Today, we reported earnings from continuing operations of $63.9 million or $0.53 per diluted share, compared to earnings from continuing operations of $82.8 million or $0.69 per diluted share in the first quarter of fiscal 2020. NOC in the quarter included net after-tax charges of $5.9 million related primarily to facility closure and asset impairment expenses at our Rancho Cucamonga Steel California operations. As Barbara mentioned, production ended in late December.

Excluding these and other one-time expenses, adjusted earnings from continuing operations were $69.8 million or $0.58 per diluted share. Our core EBITDA from continuing operations was $156.6 million for the first quarter of 2021, a decrease of 10% from the near-record level of $174.7 million — $174.4 million reported first quarter of 2020. Slide 5 of the supplemental earnings call slides available on our website shows the stability of our core EBITDA on a per-ton-of-finished-steel-shipped basis over the course of the pandemic. Now, I will review results of segments for the first quarter of fiscal 2021.

North American segment recorded adjusted EBITDA of $156.6 million for the quarter, compared to adjusted EBITDA of $174.7 million in the same period last year. Largest driver of this reduction was lower margins-over-scrap costs on finished products. Margins for both steel products and downstream products were impacted by lower average selling prices compared to a year ago against higher scrap input costs. Selling prices for steel products from our mills decreased by $14 per ton on a year-over-year basis but did sequentially increase due to price increase announcements that became effective in the latter half of the quarter.

These price increases, which Barbara mentioned earlier, occurred largely in late November and have continued into January. Impact of these increases will be realized by the end of the second quarter. Average selling price of downstream products declined by $42 per ton from a year ago as a result of the mix of works shipped, as well as the impact of the high-priced projects booked in the immediate aftermath of Section 232 rolling off our backlog. Margins in our backlog remained strong and profitable relative to historical levels.

As Barbara noted, exceptional operational performance helped offset the impact of lower margins. Prior to the first quarter of fiscal 2020, controllable costs per ton of finished steel shipped declined by roughly 5%, an improvement throughout our vertical footprint. Most significant benefit was lower mill conversion costs which is our largest cost outside of scrap. We continue to benefit from our decision taken in early fiscal 2020 to curtail melting operations at Steel California and supply the facility with lower-cost billets from other plants.

Additionally, mill costs benefited from declining prices for consumables such as electrodes and alloys. Shipments of finished product in the first quarter were essentially equal to the pre-pandemic volume of a year ago with growth in steel products offset by a decline in downstream products. Rebar volumes out of the mills have been supported by sustained construction activity through the pandemic. Non-rebar volume, which is principally merchant bar and rod — wire rod, saw an increase in volumes against the backdrop of flat industry consumption.

Downstream product shipments were impacted by lower activity in certain geographies, as well as multiple storms in the Gulf Coast region. Recent trend in North American margins, volumes, and cost performance can be seen on Slide 6 of the accompanying deck. Our European oper — segment recorded adjusted EBITDA of $14.5 million for the first quarter of 2021 compared to EBITDA of $11.4 million in the prior-year quarter. Largest contributors to the improved year-over-year performance was strong cost management, higher shipment volumes, and a $1.3 million COVID-related benefit from the Polish government.

Margins over scrap were down on a year-over-year basis, but virtually flat from the prior quarter. Import flows continued to disrupt pricing and spreads in Central Europe across all long product categories. Our Europe segment has experienced four consecutive quarters of margins over scrap between $195 and $200 per ton, which is well below the long-term average as Barbara pointed out. Based on pricing developments over the last several weeks, we believe margins have bottomed.

Europe volumes increased meaningfully compared to prior — the prior year rising 17% due primarily to the impact of improving industrial demand in Central Europe, as well as service center restocking on merchant and wire rod. Rebar shipments were stable year over year, demonstrating the resilience of construction-related demand in the domestic Polish market. Now, turning to our balance sheet and liquidity. As of November 30, 2020, cash and cash equivalents totaled $465.2 million.

And — in addition, we had availability under our credit and accounts receivable programs of approximately $679 million. During the quarter, we used $12 million of cash to fund operating activities. Usage resulted primarily from the timing of payments related to certain accrued expenses, including the $32 million of acquisition working capital settlement highlighted in the fourth-quarter earnings release. Looking ahead to the second quarter of fiscal ’21, we believe the funding of working capital to be meaning — to be a meaningful use of cash.

Both our inventory and accounts receivable balances will be impacted by the generally higher price levels for scrap and finished steel. Our leverage metrics remain attractive and have improved significantly over the last two fiscal years. As can be seen in Slide 10, our trailing 12-month net debt-to-EBITDA ratio now sits at 1.1, while our net debt to capitalization is just 21%. Our robust balance sheet and overall financial strength provides us the flexibility to fund strategic projects, navigate the uncertainties of the current economic environment, and still pursue opportunistic M&A.

Our effective tax rate for the quarter was 25.3% and in line with our full-year effective tax rate forecast of — between 25% to 26%. Lastly, I would like to provide our current outlook for capital expenditures in — for fiscal 2021. We expect to invest between $200 million and $225 million with roughly $85 million earmarked for our new micro mill. For comparison purposes, we have previously stated that our typical capital spend averages around $150 million annually.

This concludes my remarks. I’ll turn it back to Barbara for the outlook.

Barbara Smith — Chairman of the Board, President, and Chief Executive Officer

Thank you, Paul. We expect finished steel shipments in the second quarter to follow typical seasonal trends in both North America and Europe. As a reminder, volumes tend to decline mid- to high-single-digits from Q1 to Q2 as construction activity is slowed this time of year with the holidays and winter weather. Shipments of steel and downstream products in North America should be supported by our construction backlog.

Manufacturing sectors of both the U.S. and Central Europe appear to signal continued recovery, which we expect to benefit volumes of merchant bar in both markets as well as our wire rod products in Europe. We anticipate margin pressure in North America during this quarter as a result of rapidly rising scrap costs and the timing lag on announced price increases. CMC is well-positioned to navigate market volatility and uncertainty.

This gives us confidence that over the long term, our company is structured to earn average EBITDA of at least $540 million per year through the cycle as we shared with you during our Investor Day. Adding the growth projects that are currently under way, we believe we can grow our through-the-cycle EBITDA to $675 million over the next three to four years. Once again, I would like to thank all of the CMC employees for delivering another outstanding quarter of performance. We will now open the call to questions.

Questions & Answers:

Operator

[Operator instructions] The first question today comes from Chris Terry of Deutsche Bank. Please go ahead.

Chris Terry — Deutsche Bank — Analyst

Hi, Barbara and Paul. I hope — I hope you’re both well. I wanted to ask you a question just around the infrastructure bill. I think previously, you talked about the rebar market potentially benefiting at 1 million to 1.4 million tons a year in that — in that line.

I just wanted your thoughts if we are to get an improvement in the infrastructure bill, how long, you know, in your experience something like that might take to flow through the numbers and just — just checking that — that — that 1 million to 1.4 million is the right range. Thank you.

Barbara Smith — Chairman of the Board, President, and Chief Executive Officer

Thank you, Chris, and Happy New Year. We’re still confident in that range of 1 million to 1.4 million. I think we’ll have to see what the priorities are of the new administration. But certainly, infrastructure does seem to be one of the areas of — of focus early on in the administration’s term.

So, we would be, you know, highly encouraged if — if that move forward.

Chris Terry — Deutsche Bank — Analyst

OK. No, you know, just in terms of the timing in how that might come through I assume to announce now just on your experience on backlogs and is that sort of a ’22, or how long would something like that take to flow through the economy?

Barbara Smith — Chairman of the Board, President, and Chief Executive Officer

Yeah. I apologize I didn’t hear — hear the second half of your question. You know, normally, there’s a, you know, a 12- to 18-month lag. I would say given discussions with our customers, there’s certainly enthusiasm to — to start projects.

And so, we’re just really watching a number of things and — and hoping for the continued recovery in the economy and no setbacks with COVID. But I think if the infrastructure bill is approved in this first year, you know, we would start to see things in — in the following fiscal year.

Chris Terry — Deutsche Bank — Analyst

OK, thanks. And just — just a follow up on the mechanics of the — the different parts of your business. Just checking that — the fabrication business. It’s still sort of that 9- to 12-month lag on pricing, sort of how you think about that — that business.

And then scraps still flow through — flows through on 30- to 45-day lag into the mills division. Just — just wanted to think about some of the modeling.

Barbara Smith — Chairman of the Board, President, and Chief Executive Officer

Yeah. I think that the 9 to 12 months is a — is a good average. More recently, we’ve seen more short duration in spot business in — in some of our, you know, fab business which is good because it turns a little bit — a little bit faster and you don’t have as much raw material exposure. But those are good averages for both fab turnover and scrap turnover.

Chris Terry — Deutsche Bank — Analyst

Thank you. That’s it for me. All the best.

Barbara Smith — Chairman of the Board, President, and Chief Executive Officer

Thank you, Chris.

Operator

The next question comes from Curt Woodworth of Credit Suisse. Please go ahead.

Curt Woodworth — Credit Suisse — Analyst

Yeah. Hey, good morning, Barbara and Paul.

Barbara Smith — Chairman of the Board, President, and Chief Executive Officer

Good morning, Curt

Paul Lawrence — Vice President and Chief Financial Officer

Good morning.

Curt Woodworth — Credit Suisse — Analyst

You know, I know there’s been a — a — a flurry of price hikes over the last three months and, you know, scrap pricing continues to go up pretty dramatically. Just wondering, you know, you talked about how you expect to have all the price hikes fully in place by the end of 2Q. Obviously, scrap cycles into the business through COGS, you know, quickly. So, can you give us a sense on, you know, a, what — what type of metal spread compression you — you could be facing this quarter? And then when I look at the spot rebar and metal bolting, it’s about $755,000.

So, it’s up, you know, roughly $160,000p over the past three months which is somewhat equivalent to what the scrap market has done, you know, if we include about a $80-per-ton rise this month. So, would — would you say that as it stands today, the price hikes you’ve announced by the end of 2Q, assuming scraps stays where it is right now you would be roughly back to where you were on metal spread?

Barbara Smith — Chairman of the Board, President, and Chief Executive Officer

Curt, you know, we don’t give any specific commentary on — on pricing for — for obvious reasons. But, you know, you certainly — there’s good transparency on the changes in raw material price and there’s been good transparency on announced price movements and — and, you know, assuming that those are accepted in the marketplace, you know, we’re — we’re encouraged by that and obviously aimed to optimize margins as — as best we can.

Curt Woodworth — Credit Suisse — Analyst

OK. May — maybe put it another way in — in terms of the lag on the announced price hikes. So, what would a typical lag be between, you know, your — your contract structure than the timing in — in terms of working through the inventory? Like if — if you announce a price hike today, will that kind of start to flow through on — on about a 60-day lag? Or how should we think about kind of the timing mismatch, if you will, between, you know, scrapping more fluid and pricing taking a little bit longer to effectuate? 

Barbara Smith — Chairman of the Board, President, and Chief Executive Officer

Yeah. And generally speaking, and every announcement is different based on, you know, the — the conditions in the marketplace. But generally speaking, if there’s an announcement today and customers are protected for two to four weeks with the scrap, you know, flowing through like it does. But, you know, those are — those are guidelines.

There’s a lot of factors and, you know, every action by everyone — every market participant is — is slightly different.

Curt Woodworth — Credit Suisse — Analyst

OK. And then just a follow up on — you talked about the backlog as it’s ticked up a little bit more recently maybe with, you know, certainly around the election or various things. Can you — can you talk about what’s, you know, what sectors of the back — like, you know, where you’re seeing activity? Is it — is it more on the infrastructure side relative to non-res? And then you mentioned residential ops are doing better, but I don’t think you have that much exposure to residential. Could you just remind me on — on what that exposure is? And that’s it.

Thank you.

Barbara Smith — Chairman of the Board, President, and Chief Executive Officer

Well, the backlog as — as everyone can appreciate when the pandemic literally shuts the economies down around the world that — that took everything to a screeching halt. And so, there was a pause in voting and bidding as everyone searched to understand things would go from — from there. And as time has gone on, as — as we all know, the — our business as an essential business has been able to — to operate very effectively throughout this. And I think construction activity, in general, has been able to move forward and without any major disruptions.

So, it — it then comes back to a lot of other uncertainty factors. And — and people tend to be more hesitant to work when they don’t have their policy matters going forward. Long story short, after some decline in backlog, we — we do believe that the backlog is stabilizing. We are encouraged by recent quoting and — and booking activity.

We — we know from our customers that there is good activity or good projects out there and we’ve seen some — some really interesting ones over the last, you know, six to eight weeks that are finally coming to market after some months of — of hesitation or just paused to understand the economic fallout from COVID. Our — our backlog still sits around 60% private, 40% public. If there was an infrastructure bill of the magnitude that the — the — the House and Senate have talked about that could cause that shift over time and be more heavily weighted toward infrastructure. But I should remind folks there has been a lot of population movements throughout this past year.

And that’s where we do see some market strength as — as a result of those trends. And, you know, that’s probably going to continue and — and with that comes a lot of infrastructure that will follow on from — from the strength in residential. I should remind our listeners that we do — now, with the addition of the recent acquisition, we do have wire rod exposure not only in Europe but also here in the U.S. And there is no good amount of wire rods that — that go into — into residential.

So, we have a little more exposure there than maybe what you would think of historically. At — again, with a strong residential follows a non-residential. And so, that’s a very encouraging sign for us going forward.

Curt Woodworth — Credit Suisse — Analyst

Great. Thanks very much. Be well.

Barbara Smith — Chairman of the Board, President, and Chief Executive Officer

Yes, Thank you. You too.

Operator

The next question comes from Seth Rosenfeld of Exane BNP Paribas. Please go ahead.

Seth Rosenfeld — Exane BNP Paribas — Analyst

Good afternoon. Thanks for taking our questions today. If I may, I have first a follow-up question on your recent comments on — on MBQ. And I want to come back to working capital, please.

When it comes to MBQ, can you give us a sense on –on what’s driving these particularly strong volumes in both the U.S. and in Europe? To what extent you’d attribute this to market share gains versus some weaker competitors, inventory restocking after the summer trough by your trader customers, and more — something more fundamental and real demand trends. If we can start there, please.

Barbara Smith — Chairman of the Board, President, and Chief Executive Officer

OK. Thank you, Seth. Happy New yYear. Now, the MBQ has been — as we’ve highlighted, it’s — it’s an important product.

It’s always been in our portfolio. We very much appreciate our — our merchant customers. It’s not a simple answer. We have invested in providing a broader product range.

And so, that opens up opportunities for us. Clearly, there has been inventory restocking as a lot of the manufacturing sector was shut down for a period of time in the early stages of the pandemic. And — and then, you know, I think service centers have been very judicious and very conservative in managing their working capital understandably. So, given the market volatility and uncertainty, it’s a combination of things I — I can also remind you that in the U.S., there was a one mill that was shut down over the last period of time.

And so, certainly, that opened up other opportunities for us as well.

Seth Rosenfeld — Exane BNP Paribas — Analyst

Just to clarify, is there anything with these volume numbers that you think is uniquely or unsustainably boosted by restocking? Is this a run rate we should take moving forward for MBQ I guess in the bottom line?

Barbara Smith — Chairman of the Board, President, and Chief Executive Officer

I don’t think so. I think that — I don’t believe the manufacturing sector is, you know, fully ramped up to normal operations. I know there are still shortages throughout the supply chain. It’s — here in the market, buying anything you — you certainly will be aware of — of some of the shortages throughout the supply chain.

But — so — yeah, maybe there are some, you know, short-term settling out of it. But I — I still think there’s — and our data would indicate that there’s going to be continued demand growth in 2021, you know, as all of the sectors of the economy recover.

Seth Rosenfeld — Exane BNP Paribas — Analyst

OK. Looks very clear. And — and if I can ask a follow-up question, please, on the guidance for working capital, please. Obviously, a big use of cash in Q1, the guidance for significant investment in Q2.

Can you provide any framework for the scale of investment you’d expect? And then is there any reason to expect a full-year investment this year? Or assuming some moderation of trends, would you expect a release in the back half, please?

Paul Lawrence — Vice President and Chief Financial Officer

Sure, Seth, and good — good morning. You know, as far as our working capital in the — in the first quarter as you indicated, you saw a — a normal use of cash for us. Typically, the — the — the first quarter includes various yearend-related payouts that occur in the — in — in the first quarter as well as some — some accrued interests and — and — and other activities. And so, you know, the normal flow is — for us is — is an outflow in the — in the first quarter and then, you know, holding everything else constant.

We recover that working capital throughout the — the balance of the — the — the year. In the current year obviously, in addition to the normal cycles, we have the — the impact of the inflationary pressures both on the inventory side and the receivable side. And really, that’s, you know, clearly a — a, you know, cyclical business that’s a temporary investment and — and really depends on your outlook for the — the — the cycle of costs and where you — where you project the — the scrap prices to — to go and — and possibly recover. But, you know, the — the positive thing from our perspective, you know, we’ve got $1.1 billion of — of liquidity through the judicious cash balance sheet management that we’ve got.

And so, we view this as — as, you know, part of the normal management of the — the — the business and we do see, you know, overall that we continue to look to optimize the — the business which includes long-term having working capital reductions in, you know, a day’s measure. But in today’s environment, as a result of the rising prices, clearly, we will see a — an investment in — in cash here in the second quarter.

Seth Rosenfeld — Exane BNP Paribas — Analyst

Very clear. Thank you.

Operator

The next question comes from. Timna Tanners of Bank of America. Please go ahead.

Timna Tanners — Bank of America Merrill Lynch — Analyst

OK. Hey, good morning, Barbara and Paul. Happy New Year.

Barbara Smith — Chairman of the Board, President, and Chief Executive Officer

Happy New Year’s, Timna.

Paul Lawrence — Vice President and Chief Financial Officer

Good morning.

Timna Tanners — Bank of America Merrill Lynch — Analyst

I just wanted to clarify. So, on that comments about the scrap margin or the scrap — the pressure on margins from scrap, you know, if — if we believe this could be the year for scrap, and scrap is off to a sharp — sharply higher start for the — the year and into your February quarter. Is your guidance more a commentary on like the temporary timing of passing it all through? Or is there any reason to believe that this is a margin squeeze that we could see beyond like the short-term? So, I’m just really asking about, you know, sharply higher scrap prices. Maybe it’s just a — a question of timing and — and how you think about that adjustment for your steel business.

And then I want to ask something about steel fabrication on those lines as well.

Barbara Smith — Chairman of the Board, President, and Chief Executive Officer

Timna, we really think it’s — it’s a — we’re trying to signal the timing lag. Very encouraged by the — ability, you know, — which has historically been the case where our customers understand as raw material prices change that there are — there are adjustments to finished product pricing. So, right now, it’s really a — a question of the timing between scrap movements and price changes. And imports are relatively at bay and that’s another factor, as you know, that plays into it.

And so, that guess to us that we’re going to be able to recover those raw material price changes as they occur.

Timna Tanners — Bank of America Merrill Lynch — Analyst

OK, that makes sense. So, just, you know, because of the unusually sharp increase and — and probably conservatism into February and unknowns there, it makes — makes sense to be a bit conservative. But along those lines, I’m trying to understand how to think about the fabricating business. So, if — if I understand correctly, the inputs, the rebar that goes into that is priced on like a quarter lag.

And then the finished product is priced on like 9- to 12-month lag. So, if we think about, you know, the rebar price inflation for now against what we know a year ago, is that — does that imply like a near-term margin squeeze until any adjustments can be made on the selling price? Or — or can you just guide us how to think about that? I — I believe you talked about it — Paul talked about it and — and cautioned on it, but I just want to make sure I understood that — that guidance.

Barbara Smith — Chairman of the Board, President, and Chief Executive Officer

Yes. So, I’d make the following remarks and Paul can certainly add color if he’d like. And just as a reminder, first and foremost, generally, higher prices are beneficial to the business overall. Save the — the lags that we spoke of.

So, you know, we were encouraged by the higher finished goods prices that — that we’re seeing in the marketplace. I also want to remind everyone that — that on the raw materials side, when — when raw material prices move higher, that creates a nice opportunity in our recycling side of the business to improve margins which helps to offset and buffer the temporary impact on the other side of the coin which is the fab side that you alluded to, Timna. And so, yes, there is going to be some, you know, temporary adjustment in fab as fab contracts adjust to the higher raw material prices. But I haven’t, you know, — I’m encouraged that — that not only is the fab backlog stabilized and started to build again.

But also, I think that, you know, we’re going to see fab prices begin to adjust to — to these changes in — in raw material prices. We try to be judicious in booking projects when you have this phenomena going on and — but, you know, we — we — we’ve been at this for a long time and there’s those offsetting factors between recycling benefit and temporary fab — fab — fab impact.

Paul Lawrence — Vice President and Chief Financial Officer

The only thing I would add, Timna, is if you — if you look at, you know, where the margin is on our downstream products over scrap here in this most recent quarter, it is — it is still at — in comparison to historical levels’ elevated margins. And so, while we will see a temporary squeeze, as — as Barbara has outlined, we’re starting from a — a place of elevated margins which will mitigate the impact somewhat in comparison to some prior cycles.

Timna Tanners — Bank of America Merrill Lynch — Analyst

Oh, no doubt. I just want to make sure I understand. So, the — the recycling business benefits on higher scrap prices. The steel business, you know, would — would hope to offset higher scrap with higher steel and — and maintain a — a solid, you know, if not, you know, better margin.

And on the fab business, there’s a bit of an offset. And — and just wanted to clarify unless there was something that was missing on an ability to pass the prices differently than in the past.

Paul Lawrence — Vice President and Chief Financial Officer

No. That’s — that’s correct.

Timna Tanners — Bank of America Merrill Lynch — Analyst

OK. All right. Thank you.

Barbara Smith — Chairman of the Board, President, and Chief Executive Officer

Thanks, Timna.

Operator

The next question comes from Andreas Bokkenheuser of UBS. Please go ahead.

Andreas Bokkenheuser — UBS — Analyst

Thank you very much. Happy New Year, everyone. Just a quick question on — on kind of order book this year to fully understand the backlog. And — and you were mentioning how residential kind of tends to be non-res so and so.

When we look at some of the leading indicators like the non-res starts, and the ABI, and so on, it — it would suggest that we could actually see, you know, pressure on construction steel demand this year. But from — from what I’m kind of taking away from your call is that, you know, you’re — your pretty comfortable with your — with your new order book. So, how — how should we kind of think about it overall? I mean, you’re effectively capturing market share. Is that kind of where the bulk of your volume growth is coming from this year, you know, in a potentially shrinking market? Or — or do you think that you’re looking at the ABI, looking at, you know, non-residential construction starts’ management good indicators of — of how the market is going to come play out this year? How should we think about that?

Barbara Smith — Chairman of the Board, President, and Chief Executive Officer

Yeah. I think we’re managing a portfolio of — of products. And while certainly, rebar is very, very key component of that, we do have these other products that are, you know, not — not tied to ABI and other things. We’d like to look at Portland Cement and cement consumption because cement consumption is more correlated to rebar consumption than just ABI or non-res because there are — there are a lot of other uses of rebar outside of just non-res.

Certainly, non-res is — is important. And Portland Cement also has a very, very, you know, good track record of — of forecast accuracy. And Portland cement, over this past year during the pandemic, has candidly continued to improve or increase their projections going into 2021, you know, factoring in all of the more current economic data. And Portland Cement is — is showing a modest increase in cement consumption year over year.

So, that — that gives us encouragement along with all the other factors that we’re — we’re watching.

Paul Lawrence — Vice President and Chief Financial Officer

One — one point I would add, Andreas, is, you know, geographic spread as well. You know, you look at where we’re predominately located in the — in the Sun Belt areas and, you know, those are clearly the — the strongest markets from — from a non-res perspective. Clear, the northeast is — is — is weak and has been weak now for a number of years. Those often have some out-weighted impacts to the overall numbers versus our — our markets.

Andreas Bokkenheuser — UBS — Analyst

That’s — that’s very clear. That makes a lot of sense. And — and, you know, one follow up on scrap, if I may. Obviously, you know, we’ve seen the head — headlines about China kind of reopening their doors for importing scrap.

I’m sure you saw it as well. How — how do you kind of think about that? Is this, you know, do you think this is going to be a challenge in terms of your costs if China starts tightening the global scrap market and East Coast U.S. scrap yard kind of exporting more scrap into the world? Or — or this — is this an opportunity for you to potentially, you know, man — ensure your finished steel price at a higher level and — and kind of protect your spreads if the global scrap market tightens. That’s my follow-up.

That’s all the questions I have.

Barbara Smith — Chairman of the Board, President, and Chief Executive Officer

Thank you, Andreas. As I said earlier, generally speaking, higher raw — raw material prices, higher finished goods prices lead to much improved results in our business. So, we’re not — certainly not discouraged by that. I — I think we also have a business model that’s designed to — to flourish because we know that raw materials also fluctuates — fluctuate within — within a year and they can fluctuate, you know, certainly year to year.

So, we have a very flexible business model, unlike other products in the steel value chain that have longer lags in order to adjust for raw material pricing. We have a — a relatively short lag in that regard. And so, we’ll — we’ll see. Certainly, we’re studying the current phenomena.

And I think just like you have a number of mills that were down for a period of time this past year and they are coming back online as industrial activity and economies begin to heal, I think you have a similar situation that’s occurring in — in China and Asia and other places around the world. So, well — we’ll remain very nimble and flexible to adjust to.

Andreas Bokkenheuser — UBS — Analyst

That’s very clear. Thank you very much for taking my questions. Stay safe.

Barbara Smith — Chairman of the Board, President, and Chief Executive Officer

Thank you. You too.

Operator

The next question comes from Phil Gibbs of KeyBanc Capital Markets. Please go ahead.

Phil Gibbs — KeyBanc Capital Markets — Analyst

Hey, good morning. Happy New Year.

Barbara Smith — Chairman of the Board, President, and Chief Executive Officer

Happy New Year, Phil.

Phil Gibbs — KeyBanc Capital Markets — Analyst

This first question for me Barbara, I think you mentioned that backlogs on the downstream side domestically are starting to stabilize. They had pulled back a little bit post-election. Where do you think we are year on year in terms of downstream U.S. backlogs?

Barbara Smith — Chairman of the Board, President, and Chief Executive Officer

Yeah. I don’t think that pullback was election-related. So, I think it was just really the — the pandemic. So, you know, that’s been slowly healing as time goes on.

And we’ll see what happens in the coming months in terms of — or recent uptick in — in COVID cases. But I think everybody’s learning to live within that environment and I don’t think that we’ll see the pullback in — in industrials and other activity like we saw back in March of last year. The backlog’s down a little bit, still single-digits. But just, you know, encouraged that it’s stabilizing and we do see, you know, much more positive economic activity today than four months ago, six months ago.

I — I would also add, I think I mentioned it earlier that in some parts of the business, our backlog has shorter duration which is a good thing for us because it cycles through quicker and you don’t have to act on that raw material. And our price is not as exacerbated as when you fill up with a lot of long-duration projects.

Phil Gibbs — KeyBanc Capital Markets — Analyst

Thank you. And — and as we look at your conversion costs, you’d pointed to the quarter being very solid in terms of your execution. Any way to isolate how much that benefited you on an absolute basis year on year relative to one 1Q ’20? Are we talking $5 million, $15 million? You know, I’m — I’m just trying to get a — a sense of, you know, how much you’ve been able to — to optimize the business just in the last twelve months.

Paul Lawrence — Vice President and Chief Financial Officer

You know if you — if you take a look at the — the — the controllable costs, Phil, or root which is, you know, sort of what we outlined as everything between what we receive from the scale through to — to the fab locations outside of — of scrap. We have seen a, you know, a — a significant reduction in — in those that are — that — that is — is meaningful. You know, it’s — it’s certainly in the, you know, $10 million-plus range of what we’ve achieved over — over time.

Phil Gibbs — KeyBanc Capital Markets — Analyst

Thank you. And then — and then lastly if I could. On — on your margins, I think you had said, on the U.S. business, on the mills side, margins were starting to stabilize to improve later in the quarter as you — you push through higher pricing.

Obviously, you — you’ve talked about several successive rounds of increases. And then you’re saying margins are bottoming in — in Europe and — and maybe you’ve got some fab pressures that you talked about. So, at — so, at the end of the day, it seems to me like seasonally speaking, you — you pointed to the volumes being down. But it sounds like spreads could — could be, you know, reasonably — reasonably stable given all the — given all the puts and takes.

It just depends what type of business we’re talking about within your portfolio. Is that fair?

Barbara Smith — Chairman of the Board, President, and Chief Executive Officer

I think we’ll see where things go. It’s — it’s early in the quarter. But I think that the margins may stabilize at the end of the quarter. But you still got to — you still got to push through raw material and the lag effect of price changes.

So — so, I think to recover back to a stable margin by the end of the quarter is probably a realistic expectation. But no doubt, there’s going to be pressure on the margin within the quarter, but very encouraged by markets’ escalations in — in raw material prices. We’re — we’re going to make much money as we can. And we’re fairly encouraged for 2021 coming out of, you know, a period of time where it’s been very, very difficult to get any insight into where the markets were going.

Phil Gibbs — KeyBanc Capital Markets — Analyst

Thank you very much. Good luck.

Barbara Smith — Chairman of the Board, President, and Chief Executive Officer

Thank you, Phil.

Operator

The next question comes from Tyler Kenyon of Cowen. Please go ahead.

Tyler Kenyon — Cowen and Company — Analyst

Thanks very much. Good morning and Happy New Year.

Barbara Smith — Chairman of the Board, President, and Chief Executive Officer

Happy New Year, Tyler.

Paul Lawrence — Vice President and Chief Financial Officer

Good morning, Tyler.

Tyler Kenyon — Cowen and Company — Analyst

Good morning. Wondering if you could maybe provide us an update on — on your progress and where you are in capturing that — that $50 million of — of projected EBITDA enhancement just from network optimization that you laid out in your Investor Day. Just with Rancho now closed and a number of other initiatives under way, maybe you could give us a sense as to, you know, how — the — the — the cadence in realizing that $50 million over the next couple of years. And — and perhaps give us a sense as to what’s been realized to date.

Paul Lawrence — Vice President and Chief Financial Officer

Sure, Tyler. You know, as far as, you know, the — the activities there, it’s — it’s — it will be a — a long process to really reap all of the optimization benefits. You know, clearly, the — the — the low-hanging fruit which we’ve acted on is the — the closure of Steel California and, you know, leveraging the lower-cost facilities to ship the material to that market and continue to — to serve the California market. That — that’s the — as I said, the low-hanging fruit, you know.

As far as the other items, you know, we’re very confident but they require a lot of heavy lifting and, you know, we’re in the early innings of the — a bit of the unleashing of — of those optimization opportunities. So, as we laid out on the — the Investor Day, you know, it’s a — a two-, three-year endeavor and that’s our current outlook as well. You know, we’re seeing great benefits from the — from the closure through the controllable costs’ reduction but there’s still good opportunity ahead that we continue to get more and more confident in as we — as we go down this path.

Tyler Kenyon — Cowen and Company — Analyst

So, sounds like very little of any has been realized of that $50 million to date.

Barbara Smith — Chairman of the Board, President, and Chief Executive Officer

I wouldn’t — I wouldn’t characterize it as very little to any. But certainly, take it over the four years, it’s going to be back-end weighted.

Tyler Kenyon — Cowen and Company — Analyst

Got it. Ok, thank you. And then just with respect to the — the investment in Poland, it sounds like that is expected to ramp by the end of this fiscal year. How — how quickly do you think you can get to optimal utilization levels and — and — to attaining kind of that $20 million run rate?

Barbara Smith — Chairman of the Board, President, and Chief Executive Officer

Thank you. Well, we have a — a really stellar team in Poland and always execute well on their major capital expenditures and we would expect this to be no different. And, you know, I think we can better update you as — as time goes on because the commissioning activities are going to be late in this fiscal year. But we would expect a smooth commissioning and ramping up of that — that equipment.

Having said that, there’s, you know, you have to look at the market conditions in — in Europe and that’ll be a factor that we’ll — we’ll monitor and that will affect whether the market can absorb all of that volume as quick as we would — would like and hope. But at this stage, we think 2021, you’ll see a meaningful contribution off of the new mill and you’ll see commissioning and ramp-up. And we can probably give you a better — better feel of things later in this fiscal year. We have a better view into the 2022 outlook.

Tyler Kenyon — Cowen and Company — Analyst

Thanks very much. Good luck.

Operator

That concludes our question-and-answer session. Miss Smith, I’ll now turn the call back over to you.

Barbara Smith — Chairman of the Board, President, and Chief Executive Officer

Thank you, Alisa. Thank you all for joining us on today’s conference call. We look forward to speaking with many of you during our investor calls in the coming weeks. And happy new year and stay safe.

Thank you.

Operator

[Operator signoff]

Duration: 61 minutes

Call participants:

Barbara Smith — Chairman of the Board, President, and Chief Executive Officer

Paul Lawrence — Vice President and Chief Financial Officer

Chris Terry — Deutsche Bank — Analyst

Curt Woodworth — Credit Suisse — Analyst

Seth Rosenfeld — Exane BNP Paribas — Analyst

Timna Tanners — Bank of America Merrill Lynch — Analyst

Andreas Bokkenheuser — UBS — Analyst

Phil Gibbs — KeyBanc Capital Markets — Analyst

Tyler Kenyon — Cowen and Company — Analyst

More CMC analysis

All earnings call transcripts

Making palm oil more sustainable

                                                                            Palm oil has long been a major economic backbone of Southeast Asian economies, notably Indonesia, Malaysia and Thailand. But the undeniable environmental impact of extensive deforestation, haze and forest fires caused by oil palm plantations has given the industry a bad reputation that has been hard to shake.

To pave the way for greener practices and greater economic benefit from the palm oil sector, policymakers, businesses and consumers have key roles to play in supporting sustainable palm oil by demanding it, experts say.

Part of the solution is to help small-scale farmers adopt more responsible practices, which will make it possible for them to obtain global certification standards and gain improved access to international markets.

“Mobilising investments in knowledge and microfinance capacity for oil palm smallholders to shift toward sustainable palm oil production is essential for improving local livelihoods and the global food supply while reducing the climate and environmental impact,” said Matthias Bickel, director of the Agriculture and Food Cluster at Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH.

The Thai unit of the German international development agency works with the Department of Agriculture, Department of Agricultural Extension and private partners to promote sustainable palm oil production in Thailand, in line with globally recognised standards set by the Roundtable on Sustainable Palm Oil (RSPO).

The alliance has organised a series of ongoing training sessions to enhance smallholders’ capacity for sustainable practices to achieve RSPO certification.

GIZ recently co-hosted a business forum, “Road to Transforming the Sustainable Palm Oil Market in Thailand”, in Bangkok together with the RSPO under their Sustainable and Climate-friendly Palm Oil Production Project (SCPOPP).

“Through the SCPOPP, we aim to train over 3,000 oil palm smallholders in sustainable practices, as well as reduce 9,600 tonnes of greenhouse gas emissions from oil palm cultivation and cut production costs by 20%, within 2022,” Dr Bickel said.

According to participants at the forum, many palm oil producers are sensitive to the criticism the industry receives, and some question why other large-scale agricultural ventures in the region do not receive similar scrutiny.

For example, they say, corn planting in northern Thailand has also caused massive deforestation. As well, sugarcane plantations in Thailand and Cambodia have contributed to environmental devastation from fires set during the harvest season.

PEATLAND UNDER THREAT

They said the biggest environmental concern of the palm oil industry is the expansion of cultivation to rainforests and peatland, known not only as a source of biodiversity but also a major storage point for carbon emissions. Wetlands International, the Netherlands-based conservation group, says that 20% of oil palm planting, especially in Indonesia, takes place on peat soil, which used to be covered by peat swamp forests.

The drainage of these carbon-rich organic soils for plantations leads to massive carbon dioxide emissions, soil subsidence, and ecological and social problems. Carbon emissions from unsustainable cultivation are massive.

Key players in the palm oil industry have heeded the criticism and have been making steady progress in improving practices. Their most high-profile initiative is the RSPO, which was established in 2004.

“Ensuring greater inclusion of smallholders in sustainable solutions that positively impact their livelihoods has long been a goal of the RSPO secretariat and our members,” said Beverley Postma, the chief executive officer-designate of the RSPO.

“We recognise the important role smallholders play in market transformation and we see this as a shared responsibility that all players in the palm oil supply chain must commit to supporting.”

Thailand, for example, has the capacity to produce up to 3.7 million tonnes of palm oil per year. A majority of palm oil products come from small and medium-scale companies. Yet they lack supportive policies such as cheap loans, capacity training and access to modern technology, she pointed out.

“Last year, our membership adopted the RSPO Independent Smallholder (ISH) Standard, which aims to help more smallholders achieve certification through a stepwise mechanism, while adhering to the key sustainability requirements,” said Ms Postma.

“Although 2020 has been a challenging year for all with the global pandemic, we are seeing positive progress toward ISH certification and we hope to see Thai smallholders attain this in the near future.”

At present, RSPO-certified palm oil represents 19% (17.11 million tonnes) of the total global supply. In Thailand, just 2.8% of the country’s total supply is certified.

Prakarn Verakul, an adviser to the National Bureau of Agricultural Commodity and Food Standards, said adoption of RSPO guidelines will enable oil palm smallholders to effectively manage their plantations and improve the overall sustainability of the supply chain.

The majority of palm oil production in Thailand is for domestic consumption and the country has not faced as much criticism related to environmental, labour and human rights issues as Indonesia and Malaysia, which together account for 86% of global supply.

However, RSPO certification is still essential for Thailand as long as the country exports consumer products such as frozen chicken, instant noodles, and soaps which use palm oil in the manufacturing process.

“International markets are moving toward environmentally friendly products, and commitments to transparency and best farming practices,” said Mr Prakarn, a former chairman of the RSPO National Interpretation Working Group.

“If consumer product makers switch to use palm oil that is manufactured based on RSPO principles, we can certainly increase the productivity and competitiveness of the entire value chain, and eventually oil palm smallholders’ production costs will be reduced,” he added.

“Moreover, smallholders could earn additional income from RSPO certification. One smallholder group in Krabi has already earned approximately 700,000 baht from selling RSPO credits.”

GREENING PRODUCTION

Sanin Triyanon, managing director of Pathum Vegetable Oil Company Ltd, agreed that unlike its neighbouring producing countries, Thailand’s palm oil industry does not face the same international pressure related to environmental concerns.

“There is room for the sustainable palm oil market to grow in Thailand and more consumers in major consuming countries are demanding sustainable palm oil products that support communities and safeguard the environment,” said Mr Sanin, who is also the chairman of the Thai Biodiesel Producers Association.

However, it is still vital that palm oil businesses work with oil palm smallholders in the supply chain to enhance their productivity and improve livelihoods. Besides, raising public awareness about sustainable palm oil consumption is essential for market competitiveness at both the domestic and international levels.

“Collaboration with not only policymakers in setting direction and implementation guidelines, but also the private sector in working directly with small-scale oil palm growers and consumers are key steps to transforming Thailand’s palm oil production to meeting the international standard,” he said.

Pathum Vegetable Oil was the first Thai company certified by the RSPO for responsible oil palm plantation management in 2012. The certification asserts that the company’s business has complied with global demand for sustainable palm oil production.

One of the big challenges facing corporations is tracing palm oil through a massive and complicated supply chain. The use of new technology such as drones is helping, but more is needed.

Easier access to loans is required to help small and medium-sized producers acquire the technology that will make traceability of the palm oil supply chain more reliable and affordable.

Salinla Seehaphan, corporate affairs director of the retail giant Tesco Lotus, said the company has been part of the Thai economy for 20 years. It is promoting Thai exports in growing markets such as Malaysia, after the success in exporting Thai products through more than 6,500 Tesco stores in Britain, Central Europe and Asia.

“Apart from exporting fresh food, Tesco Lotus is working closely with Thai manufacturers to develop high-quality products for export. As one of the world’s leading retailers, we hope to use our expertise to help Thai businesses successfully enter the global market,” she said.

Tesco Lotus is pioneering in using 100% certified sustainable palm oil in its own-brand cooking oil in Thailand. “With this attempt, we wish to deliver good quality products to consumers while safeguarding the environment,” she added.

“Innovation can help oil palm smallholders, millers and refineries improve operational efficacy as consumer behaviour is changing rapidly, and support the lifestyle needs and demands of customers in the digital era.”

SHARED RESPONSIBILITY

Khor Yu Leng, a political economist and agribusiness analyst at the London School of Economics, who has been tracking sustainability of certification practices, said palm oil players could move toward having more than one type of certification to meet different market needs.

Malaysia, for instance, has set up its own certification body, the Malaysia Sustainable Palm Oil (MSPO), which is a mandatory national standard. It is aimed at improving the accountability of local palm oil products as well as promoting domestic consumption of sustainable palm oil.

Nowadays, more and more buyer brands in Asian countries such as Japan, India and China are aware of sustainable palm oil and are demanding it. But production of sustainable palm oil in Thailand is relatively low and thus the country is not well-placed to meet this growing demand.

However, she believes producers in Thailand will still take the principal RSPO standards into account. Achieving RSPO certification requires high investment cost and can be time-consuming for smaller-scale producers.

Buyers and other stakeholders including retailers and consumers need to share the costs, commitment and responsibility for the sustainable palm oil journey if sustainability is the ultimate goal.

Portuguese presidency to handle agriculture ‘with eyes on the future’

The Portuguese presidency of the EU Council is committed to doing everything to conclude negotiations on the reform of the EU’s massive farming subsidies programme without overlooking the transition toward a more sustainable food system, the Portuguese farm minister told EURACTIV in an exclusive interview.

Maria do Céu Antunes is the Portuguese agriculture minister and will chair the Agrifish EU Council until 30 June. She spoke to EURACTIV’s agrifood editor Gerardo Fortuna.

In a nutshell, what are the main priorities of the Portuguese presidency when it comes to agriculture?

With the motto ‘Time to deliver: for a just, green and digital recovery’, the Portuguese presidency intends to contribute to the European recovery, highlighting its activities in three central priorities, namely a fairer, greener and more digital Europe.

In what agriculture is concerned, our priorities converge on the ‘greener’ Europe pillar: to promote the recovery and structural strengthening of the European agri-food system, as well as the digitalisation of the sector. But also ensuring the sustainability of the rural world through the Common Agricultural Policy (CAP) reform, the action plan for the development of EU organic production, the continuity of the Farm to Fork (F2F) strategy, and the long term vision for the rural world.

The outgoing German presidency is leaving you the tough task of the CAP reform. Will you work for having an agreement within your presidency?

In the next six months, we will be committed to the conclusion of the CAP negotiations, started by the German presidency, that is currently going on between the Council, the European Commission and the European Parliament materialised in three regulations: on the strategic plans, the horizontal regulation and the regulation about the common organization of agricultural markets. This is a fundamental goal: to ensure the agricultural sector’s resilience and a transition to a greener architecture, with more revenue to farmers and fair prices to consumers.

At the same time, the threat of a CAP withdrawal by the Commission is still hanging over the heads of negotiators. Have you been reassured by the EU executive they will avoid using this ‘nuclear’ option, or it is something that could happen?

We deeply believe in everybody’s commitment to lead these negotiations to a good conclusion. The CAP will be fundamental in the transition to a sustainable food system and reinforce the European farmers’ ambition to help the EU goals in climate and environment protection. It’s undeniable that the CAP has strengthened, throughout the years, the integration of environmental objectives and goals related to food supply and farmers revenue. The reform under discussion increases CAP’s environmental goals, alongside the Green Deal.

We’re all committed to that goal, in a transparent and predictable process. We started a structured dialogue, in which the European Commission sends recommendations to member States, as strategic CAP plans are concerned, namely to evaluate each State’s contribution to the European Green Deal’s goals. We will do everything to conclude these negotiations. We all want a greener, more inclusive, more efficient and more sustainable agriculture.

What’s your take on the work done so far regarding the Green deal implementation in the agrifood sectors and what will be your focus?

The general agreement of the Council of agriculture ministers of 19-20 October on the CAP’s reform, has made it possible to achieve special importance, namely due to the positive and balanced balance between economic and environmental objectives.

The F2F strategy is at the heart of the Green Deal, and its objectives are to make the EU’s food system more autonomous and sustainable. This strategy involves changing the way Europeans produce food and eat, respecting natural resources and preserving biodiversity, and their importance has been reinforced by the context created by the pandemic of COVID-19.

In this transition, towards a truly sustainable and resilient Europe, European farmers will have a very important role, as will the Common Agricultural Policy (CAP), which will be a fundamental instrument to help farmers achieve more sustainable production systems.

When it comes to the Farm to Fork, the public opinion has so far been more focused on targets, but what kind of innovation do you think the EU should invest on in this transition?

The goals are inevitably associated with a perspective of agriculture with eyes on the future, which is agriculture that wants to be innovative, which combines technology and the transfer of knowledge with digitalisation, in order to ensure the sustainable management of resources and the conservation of different ecosystems.

All of this will accelerate the inevitable, but the needed, climate and digital transition, so important and necessary for the new generations’ strategic autonomy and a united Europe that wants to be global and socially responsible.

Food labelling was another tricky issue under the German presidency. Are you planning to return to this subject in the next six months?

Food labelling is a matter of great concern to our presidency and will have the follow up needed, so we can find a balanced and fair collective vision, where the goal is always to find a system that allows consumers to make the informed choices.

The Portuguese one will be the first EU presidency that has to deal effectively with the potential disruption caused by Brexit. Are you planning anything in particular on this aspect?

Brexit is an important dossier in our presidency. The agreement reached on 24 December between the EU and the United Kingdom has been in provisional application phase since 1 January, while the necessary steps for its ratification are taking place. The presidency will prioritise the EU’s future relations with the UK, committing itself to a comprehensive, equitable and balanced partnership, respecting the interests of the Union and the Member States. The United Kingdom will continue to be an essential European partner, of great relevance in the agricultural and agri-food sector.

You’re not the first presidency that has to deal with the pandemic though. Are you satisfied with the measures taken so far?

Working together for a more resilient Europe, one that promotes European cohesion and values is the best way to continue to guarantee the future and resilience of agriculture, particularly in the pandemic context that we all live in. This pandemic has emphasised the need to respond to crises and structurally reinforce the European agri-food system. We have the ambition to guarantee strategic autonomy and to strengthen Europe’s position in the world.

[Edited by Zoran Radosavljevic]

Bitter Air Brewing For Last 10 Days of January

Subzero Air Roughly Two Weeks Away

                                                                                                <p id="1duct0">Snowbirds are missing all the fun! While cold weather refugees in Arizona and Florida pick sand out from between their toes, Minnesotans are playing in powder, enjoying 20s and 30s and light winds, with nary a storm in sight.</p>



                                                                                                <p id="7Itwjc">As a rule our coldest days tend to be sunny, and having blue sky overhead is a coping skill for many of us. Character-building attributes may be put to the test in 2 weeks, when the first blistering shot of arctic air reaches Minnesota. The last 7-10 days of January may be Nanook, with a streak of subzero nights, even a daytime highs below zero as well with dangerous wind chills. It's too early for details but battery-draining air may envelope Minnesota and much of the USA by the last week of January.</p>



                                                                                                <p id="y3E1vz">Today's short-term forecast challenge is clouds and fog. Unusually light winds (for January) favor ice fog every night. A weak sun may be unable to burn away clouds into the weekend.</p>



                                                                                                <p id="ueMUOt">Mild weather lingers into next week - then the bubble bursts, as we welcome a shot of polar air.</p>



                                                                                                       <p id="MdE6Br"><strong>Forecast Wildcard: Fog</strong>. With winds about as light as I can recall in early January any fog and low stratus clouds that form overnight may be impossible to burn away later this week, keeping daytime temperatures cooler than they would be otherwise, with a strong inversion trapping chillier air near the ground. Even with the inversion I expect temperatures a few degrees above average.</p>



                                                                                                  <p id="nFlnVj"><strong>Numbing End to January?</strong> Models (especially NOAA's GFS guidance) are consistent in bringing much colder air into Minnesota and much of the eastern USA within 2 weeks or so. GFS may be overdoing the cold (high of -29F on January 22?) but the trends are undeniable; subzero weather is coming.</p>



                                                                                                 <p id="xG5koD"><strong>Cold Enough</strong>. Record-breaking cold? Too early to tell, but there's now little doubt that we will be shivering through roughly the last 8-10 days of January. How long this cold phase hangs on into February is very much up in the air.</p>



                                                                                                 <p id="DlBRrH"><strong>The Polar Vortex is Splitting in Two, Which May Lead to Weeks of Wild Winter Weather. </strong>Especially on the East Coast and New England, I might add. Capital Weather Gang has a good explainer: "<em>A dramatic spike in temperatures is occurring at high altitudes above the North Pole, where the air is thin and typically frigid. Known as a sudden stratospheric warming event, experts say it's likely to have potentially significant repercussions for winter weather across the Northern Hemisphere for weeks to possibly months. This unusually strong event may have profound influences on the weather in the United States and Europe, possibly increasing the potential for paralyzing snowstorms and punishing blasts of Arctic air, with the odds of the most severe cold outbreaks highest in Northern Europe.</em>.."</p>



                                                                                                  <p id="227FEw"><strong>New in 2021: Atlantic Hurricane Outlook and Potential Impact</strong>. <a href="https://www.militarytimes.com/news/your-military/2021/01/05/new-in-2021-atlantic-hurricane-outlook-and-potential-impact/?utm_source=Sailthru&utm_medium=email&utm_campaign=Air%20Force%20DNR%201.5.20&utm_term=Editorial%20-%20Air%20Force%20-%20Daily%20News%20Roundup" rel="nofollow">Military Times</a> has a post with an interesting analysis: "...<em>Klotzbach's team will release a more detailed forecast in April that includes a projected number of storms, but their initial look says the Guard may stay busy in 2021. "One of the big reasons why we think the odds favor an above average season at this point is that we currently have a moderate La Niña event [in the eastern Pacific]," explained Klotzbach in a phone interview. La Niña means cooler Pacific water temperatures, which in turn reduces upper-level winds that "basically tear apart" Atlantic storms. But even if a season has more storms and stronger storms, he said, "We can't say where the storms are going to go…it's all about location, location, location</em>..."</p>



                                                                                                 <p id="b1zdlE"><strong>Amazing Earth: Satellite Images from 2020.</strong> <a href="https://www.nasa.gov/feature/amazing-earth-satellite-images-from-2020/" rel="nofollow">NASA</a> has a link to some pretty incredible imagery; here's an excerpt of their post: "<em>In the vastness of the universe, the life-bringing beauty of our home planet shines bright. During this tumultuous year, our satellites captured some pockets of peace, while documenting data and striking visuals of unprecedented natural disasters. As 2020 comes to a close, we're diving into some of the devastation, wonders, and anomalies this year had to offer. NASA's fleet of Earth-observing satellites and instruments on the </em><a href="https://www.nasa.gov/mission_pages/station/main/index.html" rel="nofollow"><em>International Space Station</em></a><em> unravel the complexities of the blue marble from a cosmic vantage point. These robotic scientists orbit our globe constantly, monitoring and notating changes, providing crucial information to researchers here on the ground. Take a glance at 2020 through the lens of NASA satellites</em>..."</p>



                                                                                                 <p id="1A7pBp"><strong>Electric Cars Hit Record 54% of Sales in Norway as VW Overtakes Tesla</strong>. <a href="https://www.cnn.com/2021/01/05/business/norway-electric-cars-vw-tesla/index.html?utm_term=16099321384190bbbeab5f301&utm_source=cnn_Five+Things+for+Wednesday%2C+January+6%2C+2021&utm_medium=email&utm_campaign=1609932138420&bt_ee=e5qK5QmL93fkSfgEs9Oy6639xc1Kk%2BiioeYKlBGrh2MfbK%2FjssJEFNXKId6iCLXY&bt_ts=1609932138420" rel="nofollow"><em>CNN.com</em></a><em> has the story: "</em><a href="http://www.cnn.com/2020/12/31/tech/apple-car-patents/index.html" rel="nofollow"><em>Battery electric vehicles</em></a><em> accounted for more than half of all cars sold in Norway last year, putting the country way out in front in efforts to kill off the internal combustion engine. And Tesla (</em><a href="https://money.cnn.com/quote/quote.html?symb=TSLA&source=story_quote_link" rel="nofollow"><em>TSLA</em></a><em>) lost its sales crown to the </em><a href="https://edition.cnn.com/interactive/2019/08/business/electric-cars-audi-volkswagen-tesla/" rel="nofollow"><em>Volkswagen Group</em></a><em>. Norway is using huge tax incentives to help ensure that every new passenger car and van sold in the country by the end of 2025 is a zero-emission vehicle. Record electric vehicle sales in 2020 means the country is now ahead of schedule, according to Oyvind Solberg Thorsen, CEO of the Norwegian Road Federation (OFV)</em>..."</p>



                                                                                                 <p id="EvjubS"><strong>A Monster Wind Turbine is Upending an Industry</strong>. A renewable energy arms race? A story at <a href="https://www.nytimes.com/2021/01/01/business/GE-wind-turbine.html?action=click&module=Top%20Stories&pgtype=Homepage" rel="nofollow">The New York Times</a> (paywall) caught my eye: "<em>Twirling above a strip of land at the mouth of Rotterdam's harbor is a wind turbine so large it is difficult to photograph. The turning diameter of its rotor is longer than two American football fields end to end. Later models will be taller than any building on the mainland of Western Europe. Packed with sensors gathering data on wind speeds, electricity output and stresses on its components, the giant whirling machine in the Netherlands is a test model for a new series of giant offshore wind turbines planned by General Electric. When assembled in arrays, the wind machines have the potential to power cities, supplanting the emissions-spewing coal- or natural gas-fired plants that form the backbones of many electric systems today.</em>.."</p>



                                                                                                 <p id="z80CV3"><strong>Japanese Researchers Hope to Launch Satellite Made of Wood</strong>. At first I thought this was an Onion headline, and then I realized that it's real. <a href="https://bigthink.com/technology-innovation/wood-satellites?rebelltitem=3#rebelltitem3" rel="nofollow">Big Think</a> explains the rationale: "<em>NASA is currently tracking over </em><a href="https://www.nasa.gov/mission_pages/station/news/orbital_debris.html" rel="nofollow"><em>500,000 pieces</em></a><em> of satellite debris circling the Earth. These bits of mostly aluminum junk whip around the planet as fast as 17,500 mph and constitute a floating minefield that active and manned space vehicles have to find their way through without being struck, or worse, punctured. And those are just the bits large enough to be tracked—those bigger than a marble. There are many more too small to keep an eye on. And the situation is getting worse, with projects such as SpaceX's estimated </em><a href="https://www.businessinsider.com/spacex-starlink-internet-satellites-percent-failure-rate-space-debris-risk-2020-10" rel="nofollow"><em>42,000 satellites</em></a><em> or Amazon's </em><a href="https://www.space.com/amazon-kuiper-satellite-constellation-fcc-approval.html" rel="nofollow"><em>Kuiper project</em></a><em>. The wood satellites being developed won't do much to solve that problem. However, they will help out with another one: what happens to space debris when its orbit decays and it falls back to Earth? We've been lucky so far</em>..."</p>



                                                                                                 <p id="k5EmXf"><strong>20 Things That Went Strangely, Wonderfully Right in 2020</strong>. <a href="http://FORTUNE.com" rel="nofollow">FORTUNE.com</a> has an interesting list of things to be thankful for last year; here's a clip: "...<em><strong>13. It happened: the octogenarian sex symbol.</strong> In the plague year, there seemed to be nothing that slowed Dr. Anthony Fauci down—not the pressure of being the public face in the war on COVID-19, not being caught in the political crossfire, and apparently not turning 80, which the good doctor did on Christmas Eve. </em><a href="https://www.kff.org/coronavirus-covid-19/report/kff-health-tracking-poll-september-2020/" rel="nofollow"><em>A September poll</em></a><em> by the Kaiser Family Foundation found that 68% of Americans have "a great deal" or "a fair amount" of faith in Dr. Fauci to provide reliable information about the coronavirus—making him a rare entity in the pandemic era: somebody trusted by the vast majority of the country. But it was "</em><a href="https://www.nbc.com/saturday-night-live/video/dr-fauci-dr-birx-cold-open/4280665" rel="nofollow"><em>Saturday Night Live</em></a><em>" that captured the fullness of Fauciphilia in its Dec. 12 "cold open.</em>.."</p>



                                                                                                 <p id="ViGapx"><strong>When You Live in Svalbard, Norway and Forget to Close the Window to the Home Office</strong>. Image courtesy of <a href="https://www.reddit.com/r/Wellthatsucks/comments/kqybz1/when_you_live_in_svalbard_norway_and_forgot_to/?utm_source=share&utm_medium=ios_app&utm_name=iossmf" rel="nofollow">Wellthatsucks and Reddit</a>. Wow.</p>



                                                                                                 <p id="NRIEC7">THURSDAY: Cloudy and chilly. Winds: SE 3-8. High: 25</p>



                                                                                                <p id="WmhJj6">FRIDAY: Damp with clouds and fog. Winds: NW 3-8. Wake-up: 18. High: 23</p>



                                                                                                <p id="5d2P3b"><strong>SATURDAY</strong>: Mostly cloudy, still quiet. Winds: NW 5-10. Wake-up: 16. High: 24</p>



                                                                                                <p id="QqJzoO"><strong>SUNDAY</strong>: More clouds than sun. Winds: NW 5-10. Wake-up: 17. High: 27</p>



                                                                                                <p id="gRc0my">MONDAY: More sunshine, a bit milder. Winds: SW 8-13. Wake-up: 20. High: near 30</p>



                                                                                                <p id="0umNuj">TUESDAY: Mix of clouds and sunshine. Winds: SW 8-13. Wake-up: 21. High: 32</p>



                                                                                                <p id="gh4Cka">WEDNESDAY: Intervals of sun, PM thaw. Winds: W 8-13. Wake-up: 20. High: 34</p>



                                                                                                <p id="qOQz6z"><strong>Climate Stories...</strong></p>



                                                                                                 <p id="p4bqlq"><strong>Researchers Say Food Prices Don't Reflect Environmental Costs. </strong><a href="https://bigthink.com/surprising-science/food-price-greenhouse-gas?rebelltitem=1#rebelltitem1" rel="nofollow">Big Think</a> has the story; here's an excerpt: "<em>Using life-cycle assessment (LCA) tools, the researchers determined when emissions of carbon dioxide, nitrous oxide, and methane occurred in the food production process. The effects of land use, including deforestation, related to food production were also incorporated. The results were striking. Meat and dairy products are incredibly undervalued according to this measure. Pricing in the climate damage caused by their production would raise their prices by 146 percent and 91 percent, respectively. The prices of organic plant products would also rise, but by a mere 6 percent. Organic foods, in general, saw lower price increases than conventionally produced food products</em>..."</p>



                                                                                                 <p id="Xqfgcd"><strong>Venus Was Once More Earth-like, but Climate Change Made it Uninhabitable. </strong>A post at <a href="https://astronomy.com/news/2021/01/venus-was-once-more-earth-like-but-climate-change-made-it-uninhabitable" rel="nofollow">astronomy.com</a> explains: "<em>Venus is a very strange place, totally uninhabitable, except perhaps in the clouds some 60 kilometres up where</em><a href="https://doi.org/10.1038/s41550-020-1174-4" rel="nofollow"><em>the recent discovery of phosphine may suggest floating microbial life</em></a><em>. But the surface is totally inhospitable. However, Venus once likely had an Earth-like climate. According to recent climate modelling, for much of its history</em><a href="https://doi.org/10.1002/2016GL069790" rel="nofollow"><em>Venus had surface temperatures similar to present day Earth</em></a><em>. It likely also had oceans, rain, perhaps snow, maybe continents and plate tectonics, and even more speculatively, perhaps even surface life. Less than one billion years ago, the climate dramatically changed due to a runaway greenhouse effect. It can be speculated that an intensive period of volcanism pumped enough carbon dioxide into the atmosphere to cause this great climate change event that</em><a href="https://doi.org/10.1029/2019JE006276" rel="nofollow"><em>evaporated the oceans and caused the end of the water cycle</em></a><em>.</em>.."</p>



                                                                                                  <p id="CUXZHN"><strong>2020 Was a Year of Climate Extremes. What Can We Expect in 2021?</strong> My (very strong) hunch is that 2020 will go down in the books as the warmest year on record, warmer than 2016. We shall see. Here's an excerpt from <a href="http://TIME.com" rel="nofollow">TIME.com</a>: "...<em>A record-breaking Atlantic hurricane season landed a double blow of two </em><a href="https://time.com/5913006/hurricane-iota-climate-aid/" rel="nofollow"><em>hugely destructive storms in Central America</em></a><em>. Long-running droughts have destroyed agricultural output and helped to push millions into hunger in </em><a href="https://www.reuters.com/article/us-zimbabwe-water-climatechange-farming/hit-by-worsening-drought-zimbabwe-taps-funding-for-water-wise-farming-idUSKCN25D0MR" rel="nofollow"><em>Zimbabwe </em></a><em>and </em><a href="https://news.un.org/en/story/2020/11/1078662#:~:text=27%20November%202020,(WFP)%20reported%20on%20Friday." rel="nofollow"><em>Madagascar</em></a><em>. A super-cyclone unleashed massive floods on </em><a href="https://time.com/5846539/india-locust-pandemic/" rel="nofollow"><em>India</em></a><em> and Bangladesh. And overall, 2020 may end up </em><a href="https://www.nbcnews.com/science/environment/2020-likely-end-hottest-year-record-rcna199" rel="nofollow"><em>the hottest year on record</em></a><em>—despite a La Niña event, the ocean-atmospheric phenomenon which normally temporarily </em><a href="https://www.carbonbrief.org/interactive-much-el-nino-affect-global-temperature" rel="nofollow"><em>cools things</em></a><em> down. Though it's historically been difficult to say if single weather events were directly caused by </em><a href="https://time.com/5920387/paris-agreement-laurence-tubiana/" rel="nofollow"><em>climate change</em></a><em>, scientists have proven that many of the events that took place in 2020 would have been far less likely, or even impossible, without changes to the climate that are being driven by the warming of the Earth</em>..."</p>



                                                                                                 <p id="eNH6VZ"><strong>Study: Warming Already Baked-in Will Blow Past Climate Goals.</strong> <a href="https://apnews.com/article/climate-climate-change-pollution-3f226aed9c58e36c69e7342b104d48bf?utm_source=Sailthru&utm_medium=email&utm_campaign=AP%20Morning%20Wire&utm_term=Morning%20Wire%20Subscribers" rel="nofollow">Associated Press</a> reports: "<em>The amount of baked-in global warming, from carbon pollution already in the air, is enough to blow past international agreed upon goals to limit climate change, a new study finds. But it's not game over because, while that amount of warming may be inevitable, it can be delayed for centuries if the world quickly stops emitting extra greenhouse gases from the burning of coal, oil and natural gas, the study's authors say. For decades, scientists have talked about so-called "committed warming" or the increase in future temperature based on past carbon dioxide emissions that stay in the atmosphere for well over a century. It's like the distance a speeding car travels after the brakes are applied</em>..."</p>



                                                                                                 <p id="2wee8f"><strong>Biden Plan Looks for Buy-in From Farmers Who Are Often Skeptical About Global Warming. </strong><a href="https://insideclimatenews.org/news/04012021/biden-climate-plan-agriculture-farmers-tom-vilsack/" rel="nofollow">InsideClimate News</a> has the post; here's the intro: "<em>When the incoming Biden administration released its policy roadmap in November, it was clear that tackling climate change would be a top priority and agriculture will be a key part of a broad, cross-agency effort.The U.S. Department of Agriculture, the administration said, "has not historically received the sustained political attention of other agencies that play a role in climate policy." But it would become "a linchpin of the next Administration's climate strategy." The incoming administration's clear focus on climate change was remarkable. That it would enlist the country's farms and farmers—who are largely skeptical of climate change—in the battle was even more so.</em>.."</p>

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Will EU regulation of Mancozeb sour India’s grape exports?

The All India Grape Exporters Association (AIGEA) has predicted that the European Union’s (EU) regulation on Mancozeb would affect table grapes export from India. The Association has demanded that the government of India must take up the matter with EU.

However, Sahyadri Farmers Producer Company, India’s largest grape exporting company, has welcomed the EU’s step, saying that regulation of Mancozeb will lead grape farmers to use more cost-effective fungicides.

Grape Expectations: Women’s labour bears fruit in Nashik

The EU, on December 14, 2020, issued a notification regarding non-approval of active substance Mancozeb, which is a protective fungicide effective against a wide range of foliar fungal diseases. It is registered for use on horticultural and agricultural food crops as well as on ornamentals and tobacco, and in forestry.

Transition time has been provided to re-adjust the package of practices for exports of table grapes to the EU. Currently, maximum residue levels (MRLs) are not reduced to the default level of 0.01 mg/kg till January 2022. According to APEDA, India’s grape harvest scheduled for export to EU in season 2021 will not be affected as a grace period of Mancozeb shall expire on January 4, 2022.

However, from the next season (2022), the grape growers cultivating export variety for the EU market will have to adopt an alternate package of plant protection methods and stop the use of Mancozeb.

Maharashtra’s grape export hit hard by lockdown, unseasonal rains

Back to organic farming

“Indian grape export is gaining root in recent times but various restrictions imposed by the EU keep farmers on their toes. The government has to take up the matter with EU and ensure that frequent regulations and rules don’t affect the export”, AIGEA president Jagannath Khapre told BusinessLine. Khapre added that there is no data available on the use of Mancozeb in India and farmers are not sure on the alternative fungicide.

More than twenty grape varieties are under cultivation in India and a dozen varieties are commercially grown and exported to Europe and Gulf countries. The Netherlands, UK, Germany, Russia and Bangladesh were the major grape export destinations for India in 2019-20.

Khapre said that considering the cautious approach of EU countries regarding the use of chemicals in cultivation, grape farmers will have to go back to organic farming. “Since the 1960s grape farmers in India started using more and more chemicals and turned their back on organic cultivation. Probably, we will have to adopt old methods of cultivation and also find a way out to make it cost-effective”, he said.

Boost to R&D

Maharashtra ranks first in terms of grape production, accounting for more than 81.22 per cent of total production and the highest productivity in the country. AIGEA fears that Maharashtra grape farmers and exporters will have to revise their cultivation and export plans with the new regulation.

However, Vilas Shinde, chairman and MD of Sahyadri Farmers Producer Company, said the EU regulations are not specific to India and export will not be affected. “The new regulation will give a boost to research and development and farmers will get a chance to use new fungicide, which will cost them less. World over grape consumers are becoming cautious about using food items grown using chemicals and we have to go with the market choice”, said Shinde.

Grape is one of the important fruits covering an area of 123 thousand hectares occupying 2.01 per cent of the total area. The country has exported 1,93,690.55 MT grapes to the world, worth ₹2,176.88 crore ($298.05 million) during 2019-20, according to APEDA.

“The new regulation will not create any problem for the export of grapes as of now. But farmers will have to think of alternatives right from now,” Shinde added.

San Francisco and Prague: A Double Portrait

San Francisco and Prague are beautiful cities. In San Francisco, it’s the lucent blue of a vast bay, pastel homes climbing formidable hills — and a magnificent bridge spanning the chasm just where bay and ocean meet.

In Prague, it’s the low graceful Charles Bridge spanning the river that winds through a bejeweled city. Cathedral spires pierce the sky above — and Prague Castle looms over the ancient bridge and nearby medieval towers.

Untouched in 20th century wars, Prague (after communism) was a sleeping beauty — waking from decades of enforced slumber.

Two cities, epicenters of change

Both cities, San Francisco in the 1960s, and Prague in the 1990s, were epicenters of change — magnets for idealistic youth longing to be part of building something new.

Bay Area historian Dennis McNally spent two decades as publicist for the Grateful Dead. More recently, he curated a photo exhibit of the 1967 Summer of Love.

“The counter-culture of the 1960s,” he says, “was transformative. It wasn’t just free love and drugs. It was political protest and racial justice, redefining sexuality, organic food, environmentalism, yoga — fringe issues then — mainstream today.”

That counter-culture ranged from Black Panther headquarters in Oakland, to free speech and anti-war protests in Berkeley — to Ken Kesey’s earlier acid trips in Palo Alto.

The Bay Area in the 1960s exemplified freedom. The future promised to be better than the present. “Doing your own thing” embodied a vision that far reaching societal change was coming.

Late, but I was there

I came late to the San Francisco scene. I spent the summer of 1970 in Berkeley. It was there, on June 21st, in the Pauley Ballroom on Sproul Plaza at the University of California, that I attended my first Grateful Dead concert.

It was ostensibly a concert to raise money for an Indian tribe — displaced from land near Mt. Shasta. Stewart Brand, creator of the Whole Earth Catalogue, was there, too.

What I remember most was a giant inflatable, transparent bubble — like a Buckminster Fuller dome, in which people danced and moved freely.

People’s park

On Telegraph Avenue in Berkeley, a popular record shop had cleared a section of its display window and placed at the center the cover of the just released “Workingman’s Dead” album.

An understated advertisement beneath the album said simply, “New Dead.”

My sublet apartment at the corner of Ellsworth and Dwight Way was not far from where “People’s Park” had been. It was a block of vacant university property — which radical students had occupied a year earlier.

They christened the space “People’s Park — and turned it into a free speech zone where protesters and hippies gathered promoting alternative lifestyles.

In May 1969, (then-California Governor Ronald Reagan) sent in police and national guardsmen to reclaim the park — and quell the huge demonstrations of students wanting to preserve it.

It was an electric time in Berkeley, the city hailed by Tom Hayden in Ramparts magazine as “America’s first liberated territory.”

Another cultural revolution, this time in Prague

A generation later, on a smaller scale — but at least as significant — another cultural revolution took hold. This time in Prague (in central Europe — behind what was once behind the Iron Curtain).

In November 1989, a self-deprecating playwright, Vaclav Havel, was catapulted from prison to the presidency of Czechoslovakia.

This modest wordsmith — a true master of irony — was an unlikely pied piper. Yet, in the glow of freedom that followed peaceful revolution, the young and committed in the arts and business flocked to Prague — pilgrims seeking something bigger than themselves.

How to build a post-communist society?

Privileged young Americans, trekking through Europe, were lured to the city by beauty and cheap accommodation. They were among the first to be smitten by Prague — in a time of uncertainty and possibility.

How is a post-communist society built? How do people respond when the shackles stifling all forms of expression are removed? What kind of society should be built…

Would it be Havel’s idealistic land of peace and love, where towns had a pub and sweet shop on every corner? Or the crass, pulsating capitalism favored by Havel’s arch-rival — free-market ideologue Vaclav Klaus?

New newspapers and bookstores

In 1990, five students from Santa Barbara started an English-language newspaper — a bi-weekly called “Prognosis.”

A year later, some broke away to start a rival paper, the Prague Post – which was funded by a wealthy Texas investor.

Alan Levy, an expatriate New Yorker, approaching 60, and living in Vienna at the time, became editor.

He had been expelled from Czechoslovakia in 1968, after Soviet troops invaded to extinguish the Prague Spring — a brief period of freedom during which the arts flourished.

It was Levy who famously said that post-communist Prague was a haven for artists, the “left bank of the 1990s,” — like Paris in the 1920s.

Inspiration from Shakespeare

Other young Americans in 1993 opened The Globe Bookstore and Coffee House — modeled after Shakespeare and Company in Paris and City Lights in San Francisco.

Mark Baker, from Ohio, was a Globe founder — and still lives in Prague. He arrived, he says, “carried away with the optimism unleashed by the fall of communism.” It was, says Baker, an exhilarating time as Prague and all of eastern Europe reopened to the world.

Prague, of course, could not match San Francisco for depth or duration, as there were formidable language and cultural obstacles.

Havel himself in the early 1990s spoke little English. Nonetheless, the Globe prospered for several years — becoming a literary landmark that hosted readings by notable Czechs and Alan Ginsburg, whose poem “Howl” had first been read in San Francisco.

I was fortunate enough to have personally experienced Prague during this magical time. From 1994 to 1997, I lived with my family in a house on the crown of a hill — which gazed down over Prague Castle in the distance.

Expats in winter

I devoured each issue of the city’s English language papers. And on winter nights, coming from the airport and flights from shabby Sofia or Bucharest, it was a huge treat to wind through the cobbled lanes of Holesovice — and stop at The Globe to see what was happening.

No matter how late, there were people inside perusing books and speaking English. A cappuccino — or something stronger — could be had from the cafe and, near the front, there was an overstuffed chair where one could sit and unwind.

Back to old glory — and more

Prague today is more beautiful than ever. It sparkles from badly needed renovation. Privatization removed buildings — and small business from the dead hand of state control.

However, Prague’s artistic scene is a mere shadow of what it was in the 1990s — or the pre-WW1 period of Franz Kafka and Alfonse Mucha.

Not only are Havel and Levy long gone. Political corruption is endemic — and the vibrant expatriate community has shrunk. The Prague Post went bankrupt and, under new ownership, The Globe isn’t doing much matter.

The glorious Prague cultural scene of the 1990s, laments Mark Baker, was largely a media creation. The critical base of intellectuals and artists wasn’t big enough to last.

As goes Prague, so does San Francisco

Sadly, more or less the same thing occurred in San Francisco. Dennis McNally complains that, after the tech giants arrived in the Silicon Valley, the city’s artistic scene choked on money.

He says “young people no longer come for adventure or enlightenment, they come to get rich.” Before that, he continues, AIDS had devastated the gay community — deflating the arts.

Tech is the new magnet drawing the ambitious and well educated of another generation to San Francisco.

Preferring the city to the monotonous Silicon Valley suburbs where they work, the influx of the technocrats drove rents sky-high — and prompted huge developments in the old Mission district — obliterating most of what remained of 1960s hippiedom.

Conclusion

Today, San Francisco and Prague, these once vibrant meccas, cry out for a Vaclav Havel or someone like him.

As Alan Levy said of Havel, “it was his example of intelligence, modesty, artistry and love that drew people to Prague.”

Global Meat Flavors Market 2021

Covid 19 Analysis with Top Countries Data Research Reports, Industry Size, In-Depth Qualitative Insights, Explosive Growth Opportunity, Regional Analysis

Global “Meat Flavors Market”Report 2021 studies the global market competition landscape, market drivers and trends, opportunities and challenges, risks and entry barriers, sales channels, distributors, and Porter’s Five Forces Analysis. Also, Meat Flavors Marketis predictedto grow at a CAGR of Growing rate during the forecast period. And report provides a complete market overview, a list of top manufactures, the scope of the report, key market trends of the Meat Flavors market, and the main aspect of the report- whydo you have tobuy this research report? So don’t miss it.

Global Meat Flavors Market 2021 Covid 19 Analysis with Top Countries Data Research Reports, Industry Size, In-Depth Qualitative Insights, Explosive Growth Opportunity, Regional Analysis

The MarketWatch News Department was not involved in the creation of this content.

   Jan 04, 2021 (The Expresswire) --

Global “Meat Flavors Market”Report 2021 studies the global market competition landscape, market drivers and trends, opportunities and challenges, risks and entry barriers, sales channels, distributors, and Porter’s Five Forces Analysis. Also, Meat Flavors Marketis predictedto grow at a CAGR of Growing rate during the forecast period. And report provides a complete market overview, a list of top manufactures, the scope of the report, key market trends of the Meat Flavors market, and the main aspect of the report- whydo you have tobuy this research report? So don’t miss it.

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What Brexit means for them – fisherman, lorry driver and sheep farmer speak out

The day after the UK left the European Union, we spoke to some of the people working in industries that will be most affected by the historic national departure

We talked to six people on how Brexit could change their lives…

The car worker

 

Mick Graham, 51, car worker for 32 years, Unite convenor, Jaguar Land Rover, Solihull: “It is good that we are not going to have tariffs at the borders.

“That was the big issue for car production.

“But there are still real concerns around the custom checks and any delays that may be caused in our supply chain.

Europe.

“And there are not just about big suppliers to consider. They in turn will be taking parts from second and third tier suppliers.

“You may be looking at a tiny part like a grommet for a harness; that is just one example, but without it, the harness will not work.

“That fact that we have a deal is a relief; I think that even a bad deal would be better than no deal.”

The fisherman

 

Fisherman say they are facing increasing hostility in UK waters with angry Spanish rivals blocking their way.

Andrew Locker, 43, who has 20 years experience at sea, says they are desperate to reclaim the UK waters which are the most “profitable in the world”.

But competitors, who until recently have been amiable, have allegedly been carrying out some dirty tricks as the Brexit deadline looms.

Andrew, who runs Lockers Trawlers Limited in Whitby, reveals how they are facing increasing “conflict” from Spanish long liners.

“The main grievance of fishermen of my generation is that we do not govern our own waters,” he said.

“The UK waters are the most profitable in the world.

“When Brexit was first put on the cards…we were told it would be so easy to reclaim our own sovereign waters for the benefit of the UK fishermen.

“Automatically overnight, we would be better off and no longer have to go cap in hand to the EU for quotas to be able to fish in our own waters.

“Every single fisherman in the UK, well 99 per cent voted for Brexit. We were told it was the easiest deal ever, to get our waters back.

“But it was never going to be that easy.

He says in recent months there has been a lot more “conflict” at sea.

“We do see Spanish longliners shooting lots and lots of lines of up to 40 miles of baited hooks across profitable fishing grounds,” he said.

Since 1974 the UK has been bound by the EU’s rules, including its Common Fisheries Policy (CFP).

That means the fishing fleets of every country have to share.

They all have full access to each other’s waters, apart from the first 12 nautical miles (14 miles) out from the coast.

EU ministers gather for marathon talks every December to haggle over the volume of fish that can be caught from each species.

National quotas are then divided up which UK fishermen claim leaves them missing out.

But despite the bounty in UK waters, they do not supply many fish and chip shops back home because they lose out to cheaper imports.

“This is what Brexit will bring us hopefully, the chance to supply our own fish and chip shops again,” he added.

In 2018 there were 12,000 fishermen in the UK and 2,400 working part time.

The haulier

 

Mike Ponsonby owns a haulage firm based in Lichfield, Staffs, which operates 14 trucks and employs 15 drivers.

The company, called MA Ponsonby, which was founded by his grandfather, has already lost out on an application for international road haulage permits to travel through European countries.

Mike explains that demand outstripped supply by more than ten to one.

While Britain was in the single market, these permits, called ECMTs, were not needed.

“We cross borders on a daily basis, sometimes on a twice daily basis,” says Mike.

“The impact on MA Ponsonby will be considerable.

“At this stage, we have no permits available to us for cross-border transportation.

“Apart from that there are other considerable changes, the delivery driver now has to carry all official original MOT and insurance documents with him.

“The driver is also required to carry an international driving permit, which is only available from the Post Office.

 

“The implications are enormous. As a result of all that we have declined two loads to go to Paris in the first week of January, and that has cost us a four-figure sum.

“It was a delivery for a company in Bromsgrove which manufactures cold rooms for supermarkets.

“We just don’t know what the situation is going to be and we don’t want to get caught up in the massive congestion problem in Kent. We are extremely cautious.”

Mike says he and other hauliers were repeatedly asked for their opinions as part of the Brexit consultation process, but these views were “ignored” by the Government.

“We said right from the very beginning that if the Government re-introduces cross-border documents, which we haven’t seen since 1991, then it will lead to long delays at all ports, especially Dover and Calais, with Dover being the pinch-point because there are so many trucks every day.

“We were consulted but they ignored pretty much every point we made. We were warning of these matters for years.

“The great advantage of the single market, which Margaret Thatcher approved, was frictionless trade, you could drive from Bradford to Bremen and not have to stop at all except for toilet breaks and fuel.

“I’m optimistic that we can maintain 100% utilisation of the fleet despite the fact that there will be severe inhibitions caused by cross-border documentation. But we just don’t know what will happen.”

The sheep farmer

 

Sheep farmers breathed a sigh of relief at Boris Johnson ’s deal but are still bracing themselves for the long term impacts of Brexit.

Wyn Evans, the NFU Wales livestock board chairman, who farms sheep and beef himself in Ceredigion, explained the entire industry is gearing up for the challenge ahead.

He told The Mirror: “I am totally and utterly relieved that we have got this deal. I am breathing a huge sigh of relief.

“Of course the best deal we could have had would have been the relationship we had before but this deal will give us continuation of tariff free trade which is vitally important.,

“There will be a friction though, we understand that, there will be more costs in trading with the EU than there were before but on the whole it’s very good news indeed and we can concrete our future trading relationship with our nearest trading partners now.”

 

The trade with France is crucial for Welsh sheep farmers in particular, of the 40 per cent of lamb exported from Wales, 90 per cent is sold to Europe.

But Mr Evans explained that even a deal with Europe could still create problems.

He said: “I think we might have some problems going forward in terms of multiple drop-offs of livestock.”

However Mr Evans added that despite any short term problems the sheep farming industry is determined to adapt and continue trading with their long term partners in Europe.

He said: “This is what the country voted for and this deal is better than a no deal and we will just make the best of it from now on.

“I don’t want to come across as a negative Remoaner, I was a remainer, I voted to remain because I knew how much my industry traded with Europe.

“But I do accept the result totally and utterly, but what we wanted and we needed as an industry is a deal with Europe and for us to have an amicable relationship with them moving forward.

“We cannot forget they are out nearest trading partners, a customer base of 500m people on our doorstep and they take 96 per cent of our exported lamb overall.

“I was out in Rungis market in Paris last year where they handle 12,000 UK lamb carcasses a week and they assured me there would still be demand for our product post-Brexit.

“But in a no deal scenario we just wouldn’t have been able to pay the tariff so it would have made us uncompetitive within the EU.”

The small business

 

Will Fugard is chief executive and co-founder of Gusto Organic.

The firm imports raw ingredients from Holland, Italy, Spain and Mexico for its premium, ethical and fair-trade drinks which it produces in Devon.

It has already been hit with the problems at the ports with ingredients stuck in transit in Europe and containers of drinks headed for Singapore for Christmas stuck this side of the channel.

More than a third of the firm’s business is export to Europe and beyond.

Will, 50, says while he is relieved the potential deadlock on flow of goods from the UK to Europe has been lifted he is still wary of the broader implications of this deal on trade for food and beverage businesses such as his.

He said: “We may still be stepping into a bureaucratic nightmare with added paperwork around certification and details such as country of origin – in short what appears to be free trade may actually not quite deliver on that.

“We would hope that trade would be tariff free and goods could pass into Europe without needing additional label information for compliance – this will become clearer over the coming weeks.

“My position is cautious optimism that we can move forward, tempered with a wariness that the deal might not deliver free and frictionless trade in an effective way. Having to change packaging is a massive headache for any business.”

Will says the uncertainty around deal or no deal has meant a large chunk of his business has disappeared, with around 30% of export business to Europe on hold.

He added: “Our European buyers are wary of making a commitment because of the continued uncertainty around tariffs and labelling.

“I’ve also got the impression from conversations that the perception of UK businesses from abroad has been damaged during the Brexit negotiations and we will need to do a lot of work to repair that.

“The turmoil at the ports pre-Christmas has brought home just how critical that bit of water between us and France is. It feels very much like we are a small island again.”

The cleaner

 

For Polish cleaner Ania Gracz, 43, of Lewisham, South London, the Brexit vote has not changed her affection for her adopted country.

After ensuring she can stay through the Government’s Settled Status scheme, she has every intention of staying in the capital, where she lives in a rented flat.

“I came here in 2005 from Poland,” says Ania.

“In Poland at that time it wasn’t a very good money situation, so I thought I would come to England just for two years and then I would go back.

“When I went back to Poland I didn’t like it, so I came back here!

“I was much happier here. Of course I miss my family but there are many differences between Britain and Poland.

“I much prefer the mentality here than in my country.

“I had to apply for settled status about a year ago. There are differences now but I think it’s more to do with the pandemic than Brexit.

“It has become hard to get a job, but I have never had a problem with work. I don’t think it’s about Brexit.”

Asked whether the referendum has changed people’s attitudes towards Polish people, Ania replied: “For me it’s still the same.

“Most British people are still nice. I always feel welcome and have not suffered any racism.

“I’m always welcomed with a smile.

“Of course there are bad people but I never had this situation. That’s why I’m here.

“Believe me, if I didn’t like people here I would not be here. I do not stay anywhere if I don’t like it.

“In Poland I feel like an alien. My English friends tell me sometimes that I am more British than they are!”

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French chef JEAN-CHRISTOPHE NOVELLI compares Continental food and wine with British cuisine

Whether it’s a glass of crisp Chablis, a slice of spicy chorizo or a sliver of creamy brie, there are many European foods that have become part of the British culinary landscape.

So as the UK moves away from the EU, there’s never been a better time to check out the European favourites that many might be surprised to discover are made here, too.

And who better to wave the flag for British food than Michelin-starred French chef Jean-Christophe Novelli, who has lived here for 40 years. He insists the UK now produces high-quality versions of many European delicacies.

‘When I first came here trying to make a name for myself, I used to import 70 per cent of my produce. I had vans coming from Paris twice a week,’ he says. ‘Now I probably only need to bring in Italian olive oil, some smoked Spanish paprika and some vanilla. That’s it. It’s extraordinary!’

‘There is no limit to what you can do here.’

So Libby Galvin challenged Jean-Christophe to pit the European classics against the best of Britain’s deli offerings in a blind taste test. But could he recognise which was which — and judge whether the UK can beat the European favourites at their own game?

GREAT GRAPES OR VIN ORDINAIRE?

Chablis La Sereine (£20, ralphswinecellar.com) versus Henners Native Grace Chardonnay (£15.95), East Sussex

Chablis — named for the region of France where it’s made — is a wine made from the chardonnay grape, but unlike most chardonnays is not usually oaked and is grown in a slightly cooler climate. The British chardonnay here is made with chardonnay grapes grown in the even cooler climes of East Sussex.

jean-christophe’s blind-tasting verdict on French Chablis: ‘That would be ironic, a Frenchman who cannot recognise a Chablis, they will shoot me!’ he jokes. ‘But this is definitely a Chablis. Straightaway, this one is more fruity, more of the chardonnay grapes, you can smell it clearly. This is what a Chablis is supposed to be.’ 8.5/10

English Chardonnay: ‘Ah, this is not the same. This one is a little sharp, the other one is very fruity. In France because of the weather, the sunshine, the grapes have a little more time to sweeten. You can see it clearly in the richer colours, too. But well done, to produce a chardonnay in this cooler climate is impressive.’ 7/10

Was he correct? Yes

Winner: France

MEAT THAT IS A CUT ABOVE

Italian charcuterie (from £1.95 to £4.25/100g, buongiornoitalia.co.uk) including Parma ham, Stoffolotto salami and ventricina vs a selection of British charcuterie, including spiced coppa, salami and ham (from £5.50/75g, tempusfoods.com)

Charcuterie is the French word for cold cuts of meat. Classics include Parma ham, salami and coppa.

Italian charcuterie: ‘These types of meat started around the Mediterranean, and it’s all about the spice, the pimento, the chilli. There is a touch of the sun in these. You’ve got Parma ham sliced so thinly it’s transparent, but some of the meat is quite greasy.’ 6/10

British charcuterie: ‘In terms of flavours, this is superior, although quite different with chestnut, cloves and pepper. I think this is the British plate, and it smells fantastic. The only problem is the thickness. If I was serving it I would cut it thinner.

‘In my restaurant in Belfast we have charcuterie from Corndale Farm just an hour away and, the first time I arrived, my chef said to me: ‘What do you think?’ I said: ‘You must have spent a lot of money to get it over from Spain.’ He said: ‘No, it’s Irish!’ It was the biggest lesson.’ 9.5/10

Was he correct? Yes

Winner: Britain

PASTA THAT’S THE PEAK OF PERFECTION

Italian Rana tortelloni (£2.50, most supermarkets) vs English La Tua spinach and ricotta tortelloni (£5.50, latuapasta.com)

Tortelloni is a medium-sized pasta stuffed with cheese such as ricotta — a good one should not be too thick.

Italian pasta: ‘This is good, it’s consistent, the pasta is not chewy. I actually feel nostalgic, my grandmother used to make them, the same smell, the same expectation. This is obviously Italian like her. But this is not the best pasta in the world as it is ready made, it has to last on the shelf.’ 5.5/10

British pasta: ‘This looks plasticky. If this is Italian my grandmother will be screaming in her grave. But it has a good smell of spinach [tastes it] and ricotta — mmm, mmm! Mmmm mmm mmm! [Swears] Excuse the language, this is lovely. I thought the other one was Italian but now I don’t know . . . if this is the British product it is quite surprising.’ 6.5/10

Was he correct? Yes

Winner: Britain

CHEESES you can get a kick out of

French Vacherin Mont d’Or Sancey Richard (£12.95/450g, mons-cheese.co.uk) vs Hampshire Winslade Cheese (£7.25/280g, farmdrop.com)

Vacherin Mont d’Or is a seasonal cheese made with fatty milk from Alpine cows. It is rich, with piney tones from the strip of spruce it’s packaged in. Winslade cheese is made in a similar way, but with milk from local cows.

French Vacherin: ‘This is very good. It’s not the French one but it’s very good. This one is a young one because it’s still a bit sharp — if I’m wrong I’ll allow you to kick my a***. The taste, the smell.’ 10/10

English Winslade: ‘When you would go to a restaurant in the Seventies and Eighties only French cheeses were on the trolley. Maybe occasionally you would have a bit of Stilton. Now, that’s changed. This one is so creamy, it’s French, it must be. Lovely.’ 10/10

Was he correct? No

Winner: It’s a tie

FRANKFURTERS Flying the flag

German Herta Frankfurters (Four for £1.50, waitrose.com) vs The Grid Iron Charcuterie Yorkshire Frankfurters(five for £7.50, gridironmeat.co.uk) and F&Co Beef Hot Dogs (four for £6.95, farmison.com)

A traditional frankfurter is cured, then smoked, and typically heated in boiling water rather than grilled, to serve.

German frankfurter: ‘Nobody does it like the Germans. I used to go through Germany four times a year and my kids are crazy about frankfurters. The smell stays for about six hours! It’s a very specific wood they use, that you find when you go to Baden Baden.’ 8.5/10

British frankfurters: ‘Neither of these are right. One is pork [The Grid Iron], it is what you expect from a Frankfurter style sausage but it’s missing that smell, it doesn’t have the wood. The other sausage [F&Co] is not pork, it is gamey — but extremely salty, I can’t tell what it is.’ 6.5/10

Was he correct? Yes

Winner: Germany

BUTTERING UP THE OPPOSITION

Danish Lurpak (£2, Waitrose) vs Netherend Farm Organic from Gloucestershire (£2.99, milkandmore.co.uk)

A good butter is made from good cream, from cows that have grazed on good pastures. Lurpak has a reputation for consistency.

Lurpak: ‘Straight away I’m going to tell you this is Lurpak! Is it? It’s fine, it’s what you expect, simple and consistent.’ 7/10

Netherend: ‘This is very yellow for an unsalted butter. Mmmm, that’s brilliant. I can identify the good strong milk, the churning, the delivery of the flavour is superb. It is a treat — I would buy this one. I believe this one is the English one.’ 9/10

Was he correct? Yes

Winner: Britain

WHICH HALLOUMI SQUEAKS IT?

Cypriot Halloumi Vryssaki (£4.50/250g, ralphswinecellar.com) vs High Weald Dairy halloumi (£4.68, highwealddairy.co.uk)

Halloumi is a Cypriot brined sheep and goat’s milk cheese, usually served grilled or fried.

Cypriot halloumi: ‘The only you thing you can do with that is grill it. It’s very salty. I’m not an expert in this type of cheese, but I have no pleasure eating this, it’s like eating rubber — is it supposed to be? This is the British.’ 6/10

English Halloumi: ‘In terms of appearance this one is better. But taste and texture, it’s worse, it’s like eating the sole of your foot. That’s terrible.’ 4/10

Was he correct? No

Winner: Cyprus

QUIDS IN WITH THE QUINCE

Spanish membrillo (£2.50/120g, Waitrose) vs England Preserves quince fruit paste (£6.75, mons-cheese.co.uk)

Spanish quince paste is traditionally served with manchego cheese, or eaten as a sweet. Quinces are harder to grow in the UK but England Preserves uses UK quinces for its jelly.

Spanish membrillo: ‘At first you think it’s very sweet but it’s not too sweet. There’s nothing synthetic, you can smell the quince, it’s authentic. It looks like a natural colour.’ 7.5/10

English quince jelly: ‘That’s very fruity, it’s more aromatic, it smells better and it tastes two or three times better. This recipe is there to make a mark — in which case I think this one is the English. In the flavour, the smell and what I could use it with, this one is more my cup of tea.’ 8/10

Was he correct? Yes

Winner: Britain

HARD CHEESE for the italians?

Organic Italian pecorino Sardo DOP, Italicatessen (£5.50/200g, farmdrop.com) vs White Lake The English Pecorino (£8.95/200g, whitelake.co.uk)

Pecorino (Italian for ‘of sheep’) is a hard, sharp and salty sheep’s milk cheese, often eaten sliced, or grated over pasta.

Italian pecorino: ‘This is not my type of cheese, but I think this one is rather weak in flavour. I don’t like the texture.’ 6/10

English pecorino: ‘This one is more powerful. There’s sweetness, a bit of sourness, a good texture. Wherever it’s come from it’s the winner.’ 8.5/10

Was he correct? Yes

Winner: Britain

WHICH FETA’S IN THE FINEST FETTLE?

Greek Kostarelos barrel-aged feta (£6.40/250g, maltbyandgreek.com) vs British Blackwoods Cheese Company Graceburn and Shepherds Purse Yorkshire Fettle (£6.95/250g and £3.95/150g, Farmdrop.com)

Feta simply means ‘slice’ in Greek — it’s a curd cheese made of sheep and/or goat milk. A good one is soft and tangy. The description feta can only be used by versions that are made in Greece.

Greek feta: ‘This is a bit more acidic but it has more flavours. It’s the better one. Is it British?’ 8/10

English ‘feta’: ‘A bit smoky, but it’s not as good. Why is it not as good? It’s smells better but the problem is it’s too salty. I think this is the Greek one.’ 6.5/10

Was he correct? No

Winner: Greece

JEAN-CHRISTOPHE’S FINAL VERDICT:

‘Today, Great Britain is at the top of the table for creating some of the most refined produce, there are so many fantastic items out there — and this is only the beginning for British food.’

• Jean-Christophe’s restaurant is Novelli at City Quays at the AC Marriott Belfast

Europe’s push for an animal welfare label risks an epic trade dispute

On December 7, the Council of the European Union (EU) concluded that it’s time for a label on animal welfare, setting up what could become an epic trade dispute between Brussels and much of the world. 

Brussels has a long history of legislating minimum animal welfare standards. Europe has a mandatory label on table eggs, and a patchwork of voluntary labels on meat products. Animal welfare is also a part of Europe’s organic farming rules. Now Brussels wants an EU-wide label to help consumers identify, and reward, farmers who invest more in animal husbandry.

What would such a label look like? Consider France’s Étiquette Bien-Être Animal, a label adopted by Carrefour and other retailers. It assigns a letter A (“superior”) through E (“minimal”) based on 230 criteria. These criteria build upon the EU’s “Five Freedoms” for farm-kept animals, including that they be raised without hunger or distress. Since 2018, there has also been talk of considering the animal’s emotional state. All told, the label’s creators say that it clearly conveys the information that consumers want, all in an intuitive way. An EU-wide label will be marketed in much the same way.

Farmers exporting to Europe will see things differently. They’ll argue that an EU-wide label is a “disguised” restriction on trade. They’ll say the record-keeping and verification requirements are onerous and disproportionate to the amount of information on the label. They’ll insist that the criteria vetted by the label are based on how European farmers do things, not science. And they’ll claim that the letters, numbers or colors on the label will be mistaken for a quality or health standard. What’s more, they’ll probably be right.

Mere conjecture? Not really. All of these arguments have been made countless times in trade disputes over labels, often with success. For example, in United States — Certain Country of Origin Labelling, the World Trade Organization (WTO) found the record-keeping and verification costs to be far in excess of what consumers could learn from the label. Few consumers understood what the letters meant, and most, if not all, mistook them for quality rankings. Moreover, there was no evidence consumers were willing to pay for this information, even if they fully understood the label.

The U.S. country of origin label was mandatory. Imagine that, instead, the EU makes its label voluntary. That’s where things get really interesting. 

Back in 2012, the WTO convened a meeting on how to define voluntary standards in the case of health standards. This was no easy feat. But many developing countries had an example in mind: GlobalGAP. GlobalGAP, originally called EUREGAP, was launched in 1997 to incentivize “good agricultural practice,” including animal husbandry. The key was that retailers would take the lead, not governments. Compliance with GlobalGAP is necessary to get shelf space in many retailers around the world. The presented developing countries with a problem: the WTO has a lesser grasp of voluntary, as opposed to mandatory, standards. Brazil wasn’t buying it.

Brazil argued there is nothing voluntary about GlobalGAP. It’s de facto mandatory. How so? Brazil explained that retailers who adopted GlobalGAP represent too much market share to treat it as voluntary. In other words, GlobalGAP has the effect of being mandatory because it is virtually impossible to get shelf space from a retailer for food that is not compliant. An EU-wide animal welfare label, even if voluntary, will be open to the same charge.

There will be fights over an EU-wide label within Europe as well. The Council’s decision is breathtaking in its scope and, not surprisingly, anticipates frictions. For example, there’s the call not to punish countries with higher animal husbandry standards, but also a plea to write criteria that are “achievable by all” EU members. The Council expects that the label will cover all livestock at each stage of its life, transport and slaughter, yet also wants different geographical and climatic conditions across Europe to be taken into consideration. Finally, the Council wants the label to account for rules on organic farming, its “interplay” with national labels and the financial cost of doing all this.

To manage these and other frictions, look for a variety of exceptions to bridge intra-EU differences. Because these derogations are likely to be available to domestic farmers, but not foreign ones, they’ll be the low hanging fruit if (when?) the EU-wide label is challenged at the WTO. 

Animal welfare is an important and legitimate public policy goal. The trick is to pursue it without creating a disguised restriction on trade. Has the EU Council asked for the impossible?

Marc L. Busch is the Karl F. Landegger Professor of International Business Diplomacy at the Walsh School of Foreign Service, Georgetown University, a nonresident senior fellow at the Atlantic Council and host of the podcast TradeCraft.

Organic Food and Beverages Market Expected to Reach $327,600 Million, Globally, by 2022

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The key terms of the Brexit deal analyzed

But that’s the price of reclaiming sovereignty. While he can claim to have taken back control of Britain’s domestic fishing waters and ended the role of the European Court of Justice, businesses and consumers will face a slew of additional barriers to trade after Dec. 31.

The following encapsulates the main points of the agreement. You can read the 1,246 pages in full here.

Trade in Goods

Summary: The agreement ensures that most goods traded between the EU and UK won’t face new tariffs or quotas. However, British exporters will face an array of regulatory hurdles that will make it more costly and burdensome to do business in Europe.

-Rules of origin: UK firms will have certify the origin of their exports to qualify for tariff-free access to the EU. There will be limits on what proportion of goods can be assembled from parts made overseas to qualify for tariff-free access.

-Cumulation: EU parts will count as local content.

-Cars will face special restrictions. Gasoline or diesel vehicles will need to be made with at least 55% local content to escape tariffs.

-Electric transition: electric and hybrid vehicles will be allowed to contain 60% overseas content — but that will fall to 55% by 2026. Batteries will be allowed to contain 70% international content, but that will drop over the same period of time to 50%.

-Testing and certification: The absence of a mutual recognition agreement means UK regulatory bodies won’t be able to certify products for sale in the EU, a potentially big barrier to trade.

Financial Services

Summary: The deal offers little clarity for financial firms. There is no decision on so-called equivalence, which would allow firms to sell their services into the single market from the City of London. The agreement only features standard provisions on financial services, meaning it doesn’t include commitments on market access.

-The UK and EU will discuss how to move forward on specific equivalence decisions. The European Commission, which is in charge of allowing access to the EU’s market, said it needs more information from the UK and it doesn’t plan to adopt any more equivalence decisions at this point.

-Regulatory cooperation: The two sides made a joint declaration to support enhanced cooperation on financial oversight. They aim to agree on a Memorandum of Understanding by March.

Level Playing Field

Summary: This was one of the thorniest parts of the negotiation. Both sides committed to upholding their environmental, social, labor and tax transparency standards to make sure they don’t undercut each other.

-The deal doesn’t include ratchet clauses that would force the UK to stiffen its rules in lockstep with the EU. Instead, it includes a re-balancing mechanism: Either side will be able to retaliate with tariffs if they diverge too much.

-“Such measures shall be restricted with respect to their scope and duration to what is strictly necessary and proportionate in order to remedy the situation,” according to the agreement.

-Any retaliatory measures will also be subject to arbitration by an independent panel — not the European Court of Justice.

-Both sides will be prevented from giving an unlimited state guarantee to cover a company’s debts or liabilities. In line with EU law, the UK won’t be able to rescue a failing firm without a restructuring plan, and any aid to failing banks will have to be the minimum necessary to help it wind down.

-The UK and the EU will have to disclose the subsidies they award.

Dispute Settlement

Summary: Disputes on the deal must be negotiated between the EU and the UK with no role for the EU courts.

-An arbitration panel may rule on some areas and can order one side to resolve the problem or offer compensation.

-Failure to do so allows the other side to “suspend obligations” which could mean blocking some access or cooperation.

-If there’s a “serious economic, societal or environmental difficulty,” either side can react with time-limited measures.

Fishing Rules

Summary: This was one of the most contentious areas after disputes over the control of British fishing grounds came to symbolize the country’s desire to leave the EU.

-UK fleets will take 25% of the current EU catch in British waters, worth 146 million pounds ($198 million), phased in over five years. Britain’s opening negotiating position called for an 80% increase, so this represents a significant compromise.

-There is a transition period of five-and-a-half years during which reciprocal access rights to each other’s waters remain unchanged.

-After that point, British officials stress, the UK will be in control of its own waters — but the EU would be able to impose tariffs on fish if its access to British waters was limited.

Customs

Summary: The UK exit from the European single market on Jan. 1 was going to lead to more customs bureaucracy for both sides regardless of whether they reached a free-trade deal or not. The accord largely commits the EU and Britain to follow international practices aimed at minimizing customs costs for businesses.

-Both sides pledge to limit customs red tape, and will have trusted-trader programs.

-The UK says there will be “bespoke” measures to help firms including cooperation at roll-on, roll-off ports such as Dover and Holyhead. The EU says there will be specific “facilitation arrangements” for wine, as well as organic, automotive, pharmaceutical and chemical products.

Aviation and Trucking

Summary: The EU has stopped short of granting automatic recognition to British aerospace designs and products, according to the UK government.

-Such recognition will be confined to minor changes until the EU “gains confidence in the UK’s capability for overseeing design certification,” the document says.

-On trucking: Both sides commit to “good and efficient management of visa and border arrangements for road hauliers, in particular across the UK-Union border” and to “appropriately facilitate the entry and stay of” truckers.

Data Flows

Summary: The deal includes a temporary solution to keep data flowing between the EU and UK until the bloc has adopted a data adequacy decision.

-This bridge period starts on the date the new deal takes effect and will last a maximum six months, or end as soon as the EU’s data adequacy decision has been finalized, which is expected to happen in early 2021.

-Personal data shipped to the UK during this interim period “shall not be considered as transfer to a third country” under EU law, the document says, adding that the UK has to suspend its own transfer mechanism.

-If the UK applies a new transfer tool to ship data to a third country during the interim period, it should “as far as is reasonably possible” inform the EU.

-Both sides committed to upholding high levels of data protection standards and to ensure “cross-border data flows to facilitate trade in the digital economy” without imposing limits on where data can be stored or processed.

Energy

Summary: The UK won’t have access to the EU’s internal energy market. This was expected but there will be new arrangements in place by April 2022 to make sure that trading is smooth and efficient on interconnectors — huge power cables that run between the UK and Europe.

-The UK is a net importer of electricity and gets 8% of its power from the continent. As an island nation, making sure trading across these interconnectors is efficient is important to Britain.

-Making trading smooth will “benefit UK consumers and help integrate renewables and other clean technologies onto the grid in line with our domestic commitment to net zero emissions” the UK document says.

-The deal includes guarantees on security of energy supply.

-The UK is no longer part of the EU’s emissions trading system but both sides agreed to cooperate on carbon pricing in future and “consider linking their respective systems.”

-The UK-EU agreement would be suspended if either side breaches their commitments to the 2015 Paris Agreement on climate.

Professional Services

Summary: The deal means that there will no longer be automatic mutual recognition of professional qualifications.

-“Doctors, nurses, dentists, pharmacists, vets, engineers or architects must have their qualifications recognized in each member state they wish to practice in,” according to the deal.

-This is a loss for the UK, which had wanted “comprehensive coverage” to ensure there were no “unnecessary” barriers to regulated services.

-However, the deal does create a framework for the recognition of qualifications in future.

Business Travel

Summary: The UK and EU agreed that short-term business visitors won’t need to hold work permits or undergo economic needs tests.

-“Managers and specialists” will be allowed to stay for up to three years and trainees for up to a year. People visiting to set up businesses will be permitted to remain for as long as 90 days in any six-month period, according to the deal.

Taxation

Summary: “There are no provisions constraining our domestic tax regime or tax rates,” according to the UK government. Both sides pledged to “uphold global standards on tax transparency and fighting tax avoidance.”

Agriculture

Summary: Trade of farm goods will benefit from the zero-tariff, zero-quota terms between the two sides. But the lack of an equivalence agreement on phyto-sanitary rules means shippers will face new hurdles at the border.

-No tariffs: The lack of levies is “especially important“ for the agriculture and fishing sector, as some meat and dairy products would have faced taxes topping 40% under WTO terms, according to the EU.

-Extra checks: UK agri-food consignments will have to have health certificates and undergo sanitary and phyto-sanitary controls at member states’ border inspection posts.

-Both sides will be able to maintain their own sanitary standards going forward.

-Food and agri-products entering Northern Ireland from Great Britain will be subject to checks and phyto-sanitary controls.

Law Enforcement

Summary: The deal will allow cooperation between the UK and EU, particularly as part of investigations into terrorism and serious crime, including with the exchange of DNA, fingerprint and airline passenger information.

-There will be cooperation between UK and EU law-enforcement agencies, but the UK loses membership in Europol and Eurojust.

-Extradition: The UK said there will similar cooperation on extraditions to that between the EU and Norway and Iceland, “but with appropriate further safeguards for individuals beyond those in the European Arrest Warrant.”

-An arrest warrant “may not be refused on the grounds that the offense may be regarded by the executing State as a political offense, as an offense connected with a political offense or as an offense inspired by political motives.”

-Where extradition isn’t possible, there will still be “a path to justice in every case” such as requiring EU countries to refer cases to prosecution.

This story has been published from a wire agency feed without modifications to the text. Only the headline has been changed.

A to Z of markets in 2020

Amazon was a clear Wall Street winner from the coronavirus crisis. The online retailer and cloud computing giant’s shares soared as much as 92 per cent during 2020, sending its market value to a record $1.77 trillion (€1.45 trillion) in September, as internet shopping exploded during the pandemic. After selling more than $10 billion of Amazon shares this year, founder Jeff Bezos still owns 10.6 per cent of the company – cementing his position as the richest person on Earth.

                                                    <p class="no_name"><strong>Brexit</strong> headlines continued to affect equity markets sentiment – particularly in the <a class="search" href="/topics/topics-7.1213540?article=true&tag_location=United+Kingdom" rel="nofollow">United Kingdom</a> and <a href="/news">Ireland</a> during the course of 2020 – but sterling’s movements against the US dollar provided the clearest read of the market’s view of every development. </p>
                                                    <p class="no_name"><strong>Covid-19</strong>: Western equity markets reached new highs almost daily through January and most of February, even as much of <a class="search" href="/topics/topics-7.1213540?article=true&tag_location=China" rel="nofollow">China</a> went into lockdown to contain the new coronavirus that emerged in <a class="search" href="/topics/topics-7.1213540?article=true&tag_location=Wuhan" rel="nofollow">Wuhan</a>. It was initially seen by investors as an Asian health issue, with the broader economic impact restricted to short-term supply-chain disruptions, manufacturing and Chinese consumer demand. European and US stocks started to sell off, however, in late February amid a spike in cases in <a class="search" href="/topics/topics-7.1213540?article=true&tag_location=Italy" rel="nofollow">Italy</a>. It would become the story of 2020. </p>
                                                    <p class="no_name"><strong>Dividends</strong>, an investor staple, became an early casualty of the coronavirus crisis. A slew of companies globally scrapped or delayed shareholder payments in March as they sought to save cash; avoid headlines of lining investors’ pockets as governments committed trillions to keep businesses and households afloat; and, in the case of European banks and insurers, succumbed to regulatory pressure. </p>
                                                    <p class="no_name"><strong>Easy money</strong>, whereby central banks use stimulus to get cash flowing through the economy, went into overdrive as monetary policymakers rushed to the aid of financial markets and economies as they cratered as Covid-19 struck. The aggressive multi-trillion bond-buying programmes and other initiatives underpinned a strong equities rally, led by US tech stocks, that would see Wall Street’s S&P 500 reach fresh record highs as the year drew to a close. </p>

                                                    <p class="no_name"><strong>Fundraisings</strong> through share sales were in vogue as companies spotted opportunities to get ahead of rivals – or potential balance-sheet issues. Publicly-quoted Irish companies alone raised more than €3.6 billion in 2020, led by <a class="search" href="/topics/topics-7.1213540?article=true&tag_person=Paddy+Power" rel="nofollow">Paddy Power</a> owner Flutter Entertainment, which raised €2.1 billion in two share placings to bed in North American deals. <a class="search" href="/topics/topics-7.1213540?article=true&tag_company=Ryanair" rel="nofollow">Ryanair</a>, <a class="search" href="/topics/topics-7.1213540?article=true&tag_company=Smurfit+Kappa" rel="nofollow">Smurfit Kappa</a>, <a class="search" href="/topics/topics-7.1213540?article=true&tag_company=Dalata+Hotel+Group" rel="nofollow">Dalata Hotel Group</a>, <a class="search" href="/topics/topics-7.1213540?article=true&tag_company=Greencore" rel="nofollow">Greencore</a> and <a class="search" href="/topics/topics-7.1213540?article=true&tag_company=Greencoat+Renewables" rel="nofollow">Greencoat Renewables</a> also raised equity. </p>
                                                    <p class="no_name"><strong>Green</strong> and socially responsible investing, which had been gaining momentum in recent years as climate change and other social ills threaten to alter the capitalist landscape, ratcheted up a level during the pandemic. The global value of assets where investment decisions are driven by environmental, social and governance (ESG) data breached $40 trillion (€33.3 trillion) this year, according to the UN-backed Principles for Responsible Investment organisation. </p>
                                                    <p class="no_name"><strong>Heraty</strong> is a name of an Irish stock market mainstay for more than two decades. But <a class="search" href="/topics/topics-7.1213540?article=true&tag_person=Anne+Heraty" rel="nofollow">Anne Heraty</a>, who became the first female chief executive of an Iseq company when she floated her staffing group <a class="search" href="/topics/topics-7.1213540?article=true&tag_company=CPL" rel="nofollow">CPL</a> Resources in 1999, is set to bow out of the market early next year as the €318 million sale of the business to Japan’s <a class="search" href="/topics/topics-7.1213540?article=true&tag_company=Outsourcing" rel="nofollow">Outsourcing</a> Inc goes through. Heraty and her husband and fellow director, <a class="search" href="/topics/topics-7.1213540?article=true&tag_person=Paul+Carroll" rel="nofollow">Paul Carroll</a>, will receive almost €110 million for their holdings. They will remain with CPL following the deal. </p>
                                                    <p class="no_name"><strong><a class="search" href="/topics/topics-7.1213540?article=true&tag_company=Irish+Continental" rel="nofollow">Irish Continental</a> Group</strong> (ICG), owner of <a class="search" href="/topics/topics-7.1213540?article=true&tag_company=Irish+Ferries" rel="nofollow">Irish Ferries</a>, lost half its market value in the space of a month to mid-March as it became one of the worst-hit companies on the Iseq by Covid-19. The number of cars travelling on the group’s ferries slumped almost 67 per cent in the first 10 months of the year, while container freight declined by 8.9 per cent and terminal lifts at ports dropped 11.7 per cent. Still, roll-on, roll-off freight – covering trucks and lorries – rose 4.4 per cent, according to ICG’s most recent trading statement. </p>

                                                                                                                                                                                        <p class="no_name"><strong>Jamaica-based Digicel</strong>, Denis O’Brien’s telecoms group that operates across the Caribbean, Central America and Asia-Pacific, reminded investors of the perils of investing in debt with a low credit rating, or junk bonds. The company, which spent $6 billion developing its networks over almost two decades and at least $1.9 billion on dividends to O’Brien between 2007 and 2015, concluded a “distressed-debt restructuring” deal in June that saw bondholders write off $1.6 billion of what they were owed to bring its net debt down to a more sustainable $5.3 billion. </p>
                                                    <p class="no_name"><strong>Kevin Toland</strong>, who was hired in 2017 as Aryzta’s chief executive, saw his efforts to turn around the fortunes of the bakery group thwarted by Covid-19 and a group of activist shareholders that orchestrated a boardroom coup. By late November, Toland and the chairman who hired him, Gary McGann, were gone and their plan to sell the business was in tatters. The new chairman, <a class="search" href="/topics/topics-7.1213540?article=true&tag_person=Urs+Jordi" rel="nofollow">Urs Jordi</a>, plans to sell off more assets to slim down the business. </p>
                                                    <p class="no_name"><strong>Lagarde and Lane</strong>, the European Central Bank double act (president <a class="search" href="/topics/topics-7.1213540?article=true&tag_person=Christine+Lagarde" rel="nofollow">Christine Lagarde</a> and her dovish Irish chief economist Philip Lane), presided over getting members of the central bank’s governing council to agree a massive €1.85 billion pandemic bond-buying programme and ultra-cheap loans to commercial banks. While Lagarde caused a spike in Italian bond market interest rates, or yields, in March saying the ECB was “not here to close spreads” between borrowing costs of euro-zone member states as Italy became Europe’s Covid-19 ground zero, she would make it clear within a week that she would backstop governments as they borrowed billions to deal with the economic shock. </p>
                                                    <p class="no_name"><strong>Market exits</strong> became a dominant theme on the Iseq as the year drew to a close. CPL’s agreed takeover in November was followed in December by the Gallagher family behind housebuilder Abbey offering to mop up the 4.4 per cent of the business they do not already own. On the same day, forecourt retailer Applegreen’s founding directors <a class="search" href="/topics/topics-7.1213540?article=true&tag_person=Bob+Etchingham" rel="nofollow">Bob Etchingham</a> and <a class="search" href="/topics/topics-7.1213540?article=true&tag_person=Joseph+Barrett" rel="nofollow">Joseph Barrett</a>, who own 41.3 per cent of the group, revealed they had joined forces with US investments giant <a class="search" href="/topics/topics-7.1213540?article=true&tag_company=Blackstone" rel="nofollow">Blackstone</a> to plot a €718 million bid for the business. </p>

                                                    <p class="no_name">The <strong>National Treasury Management Agency</strong> originally set out to borrow €10 billion-€14 billion in the bond markets this year, mainly to finance the repayment of maturing debt as the Government looked on track for a third broadly-based budget in a row. It would be forced to raise €24 billion by the end of the year to fund unprecedented wage subsidies and Covid-19 unemployment benefits, health spending and other supports to deal with the pandemic. </p>
                                                    <p class="no_name"><strong>Oil prices</strong> turned negative in the US for the first time in history on April 20th – with West <a class="search" href="/topics/topics-7.1213540?article=true&tag_location=Texas" rel="nofollow">Texas</a> Intermediate (WTI) benchmark falling to as low as minus $37.63 a barrel – amid a price war between oil giants <a class="search" href="/topics/topics-7.1213540?article=true&tag_location=Russia" rel="nofollow">Russia</a> and <a class="search" href="/topics/topics-7.1213540?article=true&tag_location=Saudi+Arabia" rel="nofollow">Saudi Arabia</a> and as the impact of the pandemic on demand meant that there was a severe shortage of storage for oil that was due to be delivered under financial contracts for May. WTI was heading back towards $50 by late December. </p>
                                                    <p class="no_name"><strong>Provisions</strong> set aside by banks globally for problem loans soared to levels last seen during the financial crisis as Covid-19 hit the finances of households and businesses. The Republic’s five retail banks set aside a combined €2.6 billion of provisions in the first half of the year for likely loan losses, and guided towards a full-year total of €3.6 billion – even as unprecedented industry-wide payment breaks and Government supports for families and firms cushioned the economic blow. The ECB said that non-performing loans across euro-zone banks may reach €1.4 trillion under a severe scenario. </p>
                                                    <p class="no_name"><strong>Qasem Soleimani</strong> was the name on the lips of traders of everything from shares to gold in early 2020 as the top Iranian general’s assassination by a US drone in <a class="search" href="/topics/topics-7.1213540?article=true&tag_location=Baghdad" rel="nofollow">Baghdad</a> on January 3rd stoked tension between Washington and Tehran and rattled financial markets. A move within days by Iranian forces to shoot down a Ukrainian plane in error as they were on heightened alert prompted many to conclude at the time that the Middle East would dominate market sentiment this year. </p>

                                                    <p class="no_name"><strong>Robinhood</strong> investors, named after the Robinhood Markets commission-free trading app, are a breed of amateur millennial-type stock-market punters that swelled in number during Covid-19 lockdowns – enticed by the strong stock-market rebound following the March sell-off. Some fund managers claim these small-timers actually fuelled the rally, buying on momentum and swarming around certain stocks, with little knowledge. Another investment may open to them soon. Robinhood is reportedly preparing to float next year at a valuation of more than $20 billion. </p>
                                                    <p class="no_name"><strong>Smurfit Kappa</strong> shares quickly got over from an initial coronavirus slump to soar to levels above where they were trading in 2018 when the cardboard box maker was being stalked by unwanted suitor in the shape of US rival <a class="search" href="/topics/topics-7.1213540?article=true&tag_company=International+Paper" rel="nofollow">International Paper</a>. The company has emerged in recent years as a likely winner from the growth in online commerce and a move by fast-moving consumer-goods companies towards sustainable packaging. Covid-19 has accelerated these trends. </p>
                                                    <p class="no_name"><strong>Tesla</strong>, the electric carmaker founded by <a class="search" href="/topics/topics-7.1213540?article=true&tag_person=Elon+Musk" rel="nofollow">Elon Musk</a>, may still be producing a fraction of the cars of industry leaders Volkswagen, <a class="search" href="/topics/topics-7.1213540?article=true&tag_company=Toyota" rel="nofollow">Toyota</a> and <a class="search" href="/topics/topics-7.1213540?article=true&tag_company=General+Motors" rel="nofollow">General Motors</a>. But its shares soared nearly 700 per cent at one stage to value Tesla at more than $600 billion, making it the most valuable auto company in the world. This was driven as Tesla motored into profit, investors increasingly saw it more as a tech company as it progressed self-driving software, the company joined the S&P 500 stocks index and the shares became a favourite of the Robinhood brigade. </p>
                                                    <p class="no_name"><strong>US elections</strong> gave investors plenty to mull over. Wall Street hadn’t quite made up its mind on <a class="search" href="/topics/topics-7.1213540?article=true&tag_person=Joe+Biden" rel="nofollow">Joe Biden</a> before the November presidential vote. After all, the US stock market typically has a negative immediate reaction to Democrats winning the <a class="search" href="/topics/topics-7.1213540?article=true&tag_organisation=White+House" rel="nofollow">White House</a>. But the gradual easing of uncertainty surrounding the outcome of the race, as investors and households followed CNN veteran reporter John King’s mastery of his magic wall, would see shares jump on November 9th, after Biden’s election was called. </p>

                                                    <p class="no_name"><strong>Vaccine</strong> news turbocharged equity markets on November 9th, as news broke that US pharma giant <a class="search" href="/topics/topics-7.1213540?article=true&tag_company=Pfizer" rel="nofollow">Pfizer</a> and its German partner BioNTech reported that their candidate to stop Covid-19 in its tracks was more than 90 per cent effective in late-stage clinical trials. US rival Moderna was quick to follow suit with its vaccine, prompting hopes of widespread inoculation in the coming months. </p>
                                                    <p class="no_name"><strong>Wirecard</strong>, the once high-flying German electronic payments company, imploded spectacularly over the summer as the company disclosed that €1.9 billion of cash on its balance sheet probably never existed. The former darling of the Frankfurt stock market, which had a market value of €24 billion at its peak in 2018, filed for insolvency in June. </p>
                                                    <p class="no_name"><strong>Xavier Niel</strong>, the French billionaire and ultimate controlling investor in Eir, proved that there is plenty of money washing around the market looking for a man with a plan. Niel and two other partners raised €300 million in the initial public offering (IPO) in December of a shell company which has no assets as yet – but plans to buy several businesses in the organic-food and sustainable consumer-goods sectors. So-called special-purpose acquisition company IPOs are more prevalent in the US, where a record $75 billion was raised through such deals this year. </p>
                                                    <p class="no_name"><strong>Yields</strong> on government bonds hit record lows during 2020 as central banks injected trillions into financial markets to keep the show on the road. The yield on the Irish 10-year Government bonds, which dipped below zero for the first time in August 2019, would fall to a fresh record of minus 0.32 per cent in early December. </p>
                                                    <p class="no_name"><strong>Zoom Video Communications</strong> shares soared by up to 760 per cent to value the company at as much as $168 billion this year as it became the go-to site for arranging business meetings and family quizzes during the pandemic. The stock has fallen back from its highs in recent months, along with other “stay-at-home” stocks on the back of positive vaccine news.</p>

30 Amazing Christmas Trees Facts to Make the Holidays Extra Magical

Nothing elicits quite the same amount of joy as a beautifully decorated Christmas tree. It may seem like it’s always been tradition for families to hang ornaments, tinsel, and lights from evergreens, but those festive firs have only become a Christmas custom stateside in the last couple hundred years. In fact, many cultures, countries, and centuries shaped the way our Christmas trees look today. If you’re a holiday history buff, keep reading for some of the most amazing Christmas tree facts we could find. They’re sure to make you feel merry and bright! And for some fascinating regional holiday activities, check out 20 Ways Christmas Is Celebrated Differently Across the U.S.

1

Christmas trees used to hang like chandeliers in Poland.

Don’t be alarmed if you see a tree hanging upside down from the ceiling. This trend actually originated in medieval times, according to The Spruce. Legend goes that a Benedictine monk used the triangle shape of the inverted tree to explain the Holy Trinity to pagans. But the idea really took off in the 1900s in Poland with podłazniczek, a custom where Polish people decorated the branches with fruit, nuts, and ribbons, then hung the tree from the ceiling! And for festive trivia to share with family, check out 55 Fun Christmas Facts to Get You in the Holiday Spirit.

2

Ukrainians decorate their Christmas trees with spider webs.

While it sounds ominous, this tradition is actually rooted in a heartwarming folktale about a poor widow who found a Christmas tree for her children. However, she had no money to decorate it, so on Christmas Eve, she went to bed crying. That night, spiders heard her tears and proceeded to cover the tree with delicate, glistening webs. Some versions of the story say the webs actually turned into silver and gold, while others say they merely looked like precious metals—either way, the widow felt rich come Christmas morning.

“Spiders have always been considered ‘good luck insects’ in Ukrainian tradition,” Lubow Wolynetz, folk art curator at the Ukrainian Museum in New York City, told Today. In honor of this, many Ukrainian families decorate their trees with silver and gold cobwebs and spiders today.

Story continues

3

Thomas Edison’s colleague was the first to put electric lights on a Christmas tree.

Some people say Thomas Edison himself did this, but let’s not let Edison take more credit than he deserves. It was actually his colleague and friend, Edward Johnson, who first thought of putting electric lights on a Christmas tree instead of the traditional candles, according to the Library of Congress. However, the first bulb-lit tree did stand in Edison’s power plant in Manhattan in 1882, set on a rotating box so that passersby could see all 80 blinking red, white, and blue lights. No one had seen anything like it.

For more holiday fun facts sent right to your inbox, sign up for our daily newsletter.

4

One of the first tree-decorating traditions involved setting firs on fire.

One of the first Christmas tree-decorating ceremonies involved adorning a fir tree with paper flowers, singing and dancing around it, and then—brace yourself—lighting the entire thing on fire. According to The New York Times, that all took place in the town square of Riga, the capital city of Latvia, in 1510. (Although Tallinn, the capital of Estonia, claims it was the first to celebrate in 1441.)

At that time in northern Europe, Christmas celebrations looked very different than they do today. The festivities ran from the end of November until the New Year, but the dazzling spectacle of our Christmas trees today would likely be just as much of a shock to them.

5

Early Romans were the first to celebrate with firs.

Evergreen trees have been synonymous with Christmas for centuries. Early Romans used evergreens to decorate their temples for Saturnalia, a festival they celebrated in December. When Christians began associating the birth of Christ with these previously existing winter holidays, they picked up on the evergreen tree as a symbol of eternal life, explains Dixie Sandborn of Michigan State University Extension.

For the most loved holiday movie ever, check out The Best Christmas Movie of All Time, According to Critics.

6

Cherry trees were once used as Christmas trees.

These days, the most popular Christmas trees are Scotch pine, Douglas fir, Fraser fir, balsam fir, and white pine. However, in the early days before everyone settled on firs and pines, some Europeans used cherry or hawthorn trees as their Christmas greenery, according to Sandborn. The appeal of these trees was in their flowers. If you cut off a branch, brought it inside, and set it in a pot of water, it would flower just in time for Christmas.

7

Americans buy upwards of 30 million Christmas trees a year.

According to the National Christmas Tree Association (NCTA), 25 to 30 million live trees are harvested annually from a crop of about 350 million trees in farms across the United States. The total land needed for all those farms comes to 547 square miles—about twice the size of the greater Chicago area. Fortunately, these farms help preserve green space, and they also employ about 100,000 Americans each year. (Alternatively, as the NCTA point outs, most artificial trees are made in China.)

And if you want to celebrate like the queen, check out 15 Royal Christmas Traditions That You Need to Know About.

8

Christmas trees are farmed in all but three states in the U.S.

It’s a commonly held myth that Christmas trees are grown in all 50 states. According to a map published by NBC, there are no tree farms in New Mexico, South Dakota, or Wyoming. In fact, the country gets most of its trees from Oregon and North Carolina, the two states with the largest production of Christmas trees.

9

Christmas tree farms are sustainable.

Concerned about the impact getting a fresh tree may have on the environment? Don’t be. As Green America points out, the vast majority of cut Christmas trees come from tree farms, which “generally plant about two trees for every one they cut.” If it’s important to you to support a farm that doesn’t use chemical pesticides, you can search Local Harvest for organic tree farms.

10

The Rockefeller Center Christmas tree idea came from construction workers.

The huge holiday spectacle at Rockefeller Center in New York City has humble beginnings. According to The New York Times, the tradition started during the Great Depression in 1931, when construction workers put up a mere 20-foot tree in the plaza and decorated it with paper garlands, strings of cranberries, and tin cans. Today, a Norway spruce no taller than 100 feet is chosen every year, trucked into Manhattan, propped up in the plaza, and topped with a Swarovski crystal star that weighs more than 9,000 pounds. Look how far she’s come!

For the songs you need to keep off your holiday playlist, check out The Most Hated Christmas Songs of All Time.

11

London’s Trafalgar Square Christmas tree is an annual thank-you gift from Norway.

London has its own arboreal tradition: a huge Christmas tree in Trafalgar Square. This tree is a thank-you gift from Norway. Every year since 1947, the people of Oslo have selected a 50- to 60-year-old spruce tree to cut down and ship to London as a way of showing gratitude to England for supporting Norway in World War II. In turn, Londoners decorate the tree in traditional Norwegian style, with vertical strings of lights descending from the star on top.

12

Australian Christmas trees are the world’s largest parasites.

If you’ve heard the phrase “Australian Christmas tree,” you might imagine a fir tree on the beach, or possibly one in the ocean Down Under. However, the plant that Australians call a “Christmas tree” is actually an aggressive, hemiparasitic type of mistletoe. This parasite is believed to be the largest in the world, with its roots stabbing victims up to 360 feet away! It looks nothing like a conifer, but its yellow-orange flowers bloom around the holidays, hence the name.

13

The first artificial Christmas trees were made of dyed goose feathers and wire.

If you prefer an artificial tree, you’re not alone. It’s a cheaper and lower maintenance option, giving parents and pet owners one less thing to worry about during the holidays. Artificial trees date back to the 1880s, when Germans looking to offset deforestation made the first ones from dyed goose feathers held together with wire. Since then, people around the world have made fake trees out of aluminum, cardboard, and glass, although most artificial Christmas trees sold today are made out of PVC plastic.

14

The largest artificial Christmas tree cost $80,000 to construct.

In Colombo, Sri Lanka, a 236-foot tall tree made of scrap metal and wood broke the Guinness World Record in 2016 for the world’s tallest artificial Christmas tree. The tree was surrounded by some controversy during construction—the local Catholic archbishop thought it was a waste of money (about $80,000) that should have gone to charity—and it ultimately didn’t stay up for long. It was dismantled in 2017 when folks realized it looked more like a rocket than a fir tree.

15

New England Puritans banned Christmas trees in the late 17th century.

In 1659, the court of the Massachusetts Bay Colony formally banned any Christmas celebrations aside from a church service, which included the “heathen tradition” of hanging decorations. Christmas trees drew looks of scorn in America for nearly two more centuries, before German and Irish immigrants finally normalized decking the halls.

16

Queen Victoria popularized the Christmas tree.

Though strict religious attitudes about Christmas trees had finally begun to soften by the early 1800s, it wasn’t until Queen Victoria and the royal family were sketched next to the household fir tree in 1848 that they truly became popular in the English-speaking world. Having grown up with a German mother, Victoria associated Christmas with evergreens decorated with oranges, cloves, and cinnamon sticks. The former colonies admired British royalty so much that Christmas trees finally became fashionable in America.

17

Germans believe it’s bad luck to put up your tree before Christmas Eve.

In order to avoid bad luck at Christmas, some Germans believe you should erect your Christmas tree no sooner than Christmas Eve (or sometimes the 23rd) and take it down no later than Twelfth Night (Jan. 5). In some predominately Catholic countries—Ireland, Italy, Argentina, etc.—the tree goes up on Immaculate Conception Day (Dec. 8) and comes down on Epiphany (Jan. 6), though some Catholics extend that to Candlemas (Feb. 2), according to Italy Magazine. However, everyone can agree that you should definitely not put your tree up before Halloween (or in America, before Thanksgiving).

18

The Vatican didn’t get a Christmas tree until 1982.

The Christmas tree was one tradition that the Catholic church snubbed for hundreds of years. It wasn’t until 1982 that Pope John Paul II, already known as a bit of a reformer, brought a Christmas tree into the Vatican to sit beside the traditional Italian Nativity crib. Today, Catholic liturgy includes a prayer for officially blessing your tree.

19

The White House evergreen goes in the Blue Room.

The official White House Christmas tree sits in the circular Blue Room, and every year since 1961, the first lady has been in charge of selecting the theme and decorations for the tree. But this custom hasn’t always been without controversy—in 1899, many people urged President William McKinley to forgo the “un-American” display because of its German roots, according to The Washington Post. It’s even said that President Teddy Roosevelt banned Christmas trees for environmental reasons, but in fact, he displayed a tree for three of his eight Christmases in the White House.

20

The National Christmas Tree stayed dark in 1979.

It was a surprise to onlookers when, during the National Christmas Tree lighting ceremony in Washington D.C. in 1979, only the star at the top lit up after President Jimmy Carter‘s daughter Amy threw the switch. The president then announced that the normally resplendent evergreen would stay otherwise dark throughout the season in honor of the Americans being held captive during the Iran hostage crisis. “We will turn on the rest of the lights when the hostages come home,” President Carter said, as reported by The Washington Post. (The hostages weren’t freed until January of 1981.)

21

One Florida city makes an annual Christmas tree out of 700 tons of sand.

Every year West Palm Beach, Florida, boasts that it has the world’s largest Christmas tree made entirely of sand: 700 tons of the stuff go into making “Sandi,” a 35-foot peak strung with lights and topped with a star. During the month-long Holiday in Paradise celebration, kids are invited to explore Sandi-Land, a free attraction that includes musical shows, miniature golf, and more family-friendly events.

22

Americans make Christmas trees out everything from lobster traps to hubcaps.

Some towns across the United States make Christmas trees out of materials even more unique than sand. For example, Baltimore, Maryland, is home to a tree made out of hubcaps, according to Travel + Leisure. And exactly 154 lobster traps comprise the 40-foot-tall Lobster Trap Tree in Rockland, Maine (pictured here). Meanwhile, Junction, Texas, displays a tree made of deer antlers; Chandler, Arizona, turns tumbleweed into a glittery Christmas tree each year; and fittingly, Lynchburg, Tennessee, makes a tree out of Jack Daniels’ whiskey barrels.

23

There are 500 chapters of the Hallmark Keepsake Ornament Club.

In 1973, Hallmark launched its Keepsake Ornament tradition. Each year, the company releases a new collection of Keepsakes—some with traditional holiday imagery, some pop-culture themed—and collectors clamber for them. (8,500 designs and counting!) According to Hallmark’s website, there are 500 local chapters of the Hallmark Keepsake Ornament Club, which theoretically involves a lot of scouring Ebay and arranging trades.

24

Christmas trees cause 160 fires every year.

Between 2013 and 2017, Christmas trees caused an average of 160 household fires each year, according to the National Fire Protection Association. Collectively, those four years of Christmas tree fires resulted in $10 million in property damage and three deaths. To avoid becoming a statistic, firefighters recommend watering your tree daily, and—whether your tree is real or artificial—you should keep any heat sources at least three feet away, throw away any damaged lights or frayed wires, and unplug the lights when you go to bed at night or leave the house.

25

Tinsel used to contain lead when actual silver proved too pricey.

People have used metallic tinsel to decorate their Christmas trees since at least the 1800s. The shiny strips of metal reflect light, allowing for a sparkling tree even in candlelight. Originally, only the rich could afford tinsel, since it was made out of actual silver. Copper and aluminum became substitutes, but neither was ideal. According to The Atlantic, after World War I, tinsel makers settled on lead as the metal of choice, even though there were already inklings that it could be poisonous. It wasn’t until the 1970s that the Food and Drug Administration banned household products made of lead.

26

Christmas wreaths were first used to celebrate Advent.

Plant-based wreaths go back to ancient times, where they were usually worn as crowns. But we have 16th-century Germans to thank for applying the wreath to Christmas traditions. They used Advent wreaths—set flat on a table—with four candles around the edge to count down the Sundays until Christmas.

27

Catalonian children have a “Christmas log.”

There’s more than one way to celebrate Christmas with a tree. In the Catalan region of Spain, many celebrate with a Tió de Nadal, or “Christmas log,” which is also sometimes called Caga Tió, or “poop log.” Starting on Dec. 8, the family puts out a hollow log (usually with a funny face and a red hat), and each day, the children take turns “feeding” it with dried fruit and nuts. Finally, on Christmas Eve, the children whack the log with sticks until it “poops” the treats back out. Guess that’s one way to keep kids entertained?

28

Popcorn garland is a truly American tradition.

All it takes is some popcorn, cranberries, a needle, and dental floss to make your very own homemade Christmas tree garland. Though Germans traditionally decorated their trees with cookies, nuts, and fruit, Americans in the 1800s adapted that custom to long strings of popcorn and cranberries. While it’s unknown exactly why popcorn was chosen—likely because it was inexpensive—cranberries are perfect, since their waxy coating keeps them from spoiling quickly. If you want to try it yourself, just make sure you use day-old popcorn, which breaks apart less easily than fresh kernels.

29

Christmas trees take nearly a decade to grow.

Your average six- to seven-foot Christmas tree takes between eight and ten years to grow, according to CNN. Along the way, it will be sheared to keep its conical shape for easier decorating. For every tree that’s cut down, farmers usually plant up to three seedlings. Of the approximately 2,000 seedlings planted per acre, about one-half to three-quarters will make it to maturity.

30

Christmas trees are recyclable.

When the holiday season comes to an end, be sure to recycle your Christmas tree. Obviously, recycled trees can be turned into mulch or compost, but that’s not the only option. Old Christmas trees can be buried to prevent soil erosion, sunk in a body of water to create a refuge for fish, or shredded and placed on hiking paths to keep the trail marked and the ground stable. They can also be donated to elephants for food at a sanctuary in Tennessee! But if you’re elsewhere in the country, check out this link to find a tree recycling center near you.

In Bullet Points: The key terms of the Brexit deal

UK Prime Minister Boris Johnson’s post-Brexit trade deal is unique in that it will leave businesses facing more barriers to trade than they did while Britain was a member of the European Union.

But that’s the price of reclaiming sovereignty. While he can claim to have taken back control of Britain’s domestic fishing waters and ended the role of the European Court of Justice, businesses and consumers will face a slew of additional barriers to trade after Dec. 31.

The following encapsulates the main points of the deal, based on a copy of the deal obtained by Bloomberg, as well as summaries provided by the two sides.

Trade in Goods

Summary: The agreement ensures that most goods traded between the EU and U.K. won’t face new tariffs or quotas. However, British exporters will face an array of new regulatory hurdles that will make it more costly and burdensome to do business in Europe.

Market access: U.K. and EU goods will continue to receive tariff-free and quota-free treatment.

Rules of origin: New rules require the U.K. to self-certify the origin of its exports to the EU. Certain products that contain a high threshold of inputs from outside the EU and U.K. may face new tariffs.

Health and safety: The EU will require U.K. agri-food exporters to provide health certificates and undergo sanitary and phyto-sanitary controls at border inspection posts.

Testing and certification: The absence of a mutual recognition agreement means U.K. regulatory bodies won’t be able to certify products for sale in the EU, a potentially big barrier to trade.

Trade remedies: The EU and U.K. may pursue tariffs and other sanctions according to rules established at the World Trade Organization.

Financial Services

Summary: The deal offers little clarity for financial firms. There is no decision on so-called equivalence, which would allow firms to sell their services into the single market from the City of London. The agreement only features standard provisions on financial services, meaning it doesn’t include commitments on market access.

The U.K. and EU will discuss how to move forward on specific equivalence decisions. The European Commission, which is in charge of allowing access to the EU’s market, said it needs more information from the U.K. and it doesn’t plan to adopt any more equivalence decisions at this point.

Regulatory cooperation: The two sides made a joint declaration to support enhanced cooperation on financial oversight. They aim to agree on a Memorandum of Understanding by March.

Level Playing Field

Summary: Both sides committed to upholding their environmental, social, labor and tax transparency standards to make sure they don’t undercut each other.

The deal doesn’t include a ratchet mechanism that would force the U.K. to stiffen its rule in lockstep with the EU.

Instead, it has a re-balancing mechanism: Either side will be able to impose with tariffs if they diverge too much. “Such measures shall be restricted with respect to their scope and duration to what is strictly necessary and proportionate in order to remedy the situation,” according to the agreement. They will also be subject to arbitration by an independent panel — not the European Court of Justice.

Both sides will be prevented from giving an unlimited state guarantee to cover a company’s debts or liabilities. In line with EU law, the U.K. won’t be able to rescue a failing firm without a restructuring plan, and any aid to failing banks will have to be the minimum necessary to help it wind down.

The U.K. and the EU will have to disclose the subsidies they award.

Dispute Resolution

Summary: One of the biggest stumbling blocks in the negotiations was the question of how to settle disputes over trade in future. If the two sides can’t resolve a dispute, or want to change the terms of the agreement, the trade deal could be reopened, according to people familiar with the matter. The mechanism is likely to work like this:

Either side can hit the other with tariffs in particular areas if they think they are justified under the terms of the agreement.

If one side thinks the other is being unfair on such tariffs, they can take the issue to an independent arbitration panel.

Individual chapters of the trade agreement can be reopened to renegotiate particular areas where there are disputes.

A nuclear option will be available to terminate the whole trade deal if it’s not working out, but the security agreement would stay in place.

Fishing Rules

Summary: This was one of the most contentious areas after disputes over the control of British fishing grounds came to symbolize the country’s desire to leave the EU.

U.K. fleets will take 25% of the current EU catch in British waters, worth 146 million pounds ($198 million), phased in over five years. Britain’s opening negotiating position called for an 80% increase, so this represents a significant compromise.

There is a transition period of five-and-a-half years during which reciprocal access rights to each other’s waters remain unchanged.

Customs

Summary: Both sides pledge to limit customs red tape, including through programs for trusted traders known as authorized economic operators (AEOs have benefits including fewer controls).

“Bespoke” measures including cooperation at “roll-on roll-off” ports such as Dover and Holyhead in Britain are also foreseen, according to the U.K., while the EU refers to specific “facilitation arrangements” for wine, organics, automotive, pharmaceuticals and chemicals.

The U.K. exit from the European single market on Jan. 1 was going to lead to more customs bureaucracy for both sides regardless of whether they reached a free-trade deal or not. The accord largely commits the EU and Britain to follow international practices aimed at minimizing customs costs for businesses.

Aviation and Trucking

Summary: The EU has stopped short of granting automatic recognition to British aerospace designs and products, according to a synopsis published by the U.K. government.

Such recognition will be confined to minor changes until the EU “gains confidence in the U.K.’s capability for overseeing design certification,” the document says.

On trucking: Both sides commit to “good and efficient management of visa and border arrangements for road hauliers, in particular across the U.K.-Union border” and to “appropriately facilitate the entry and stay of” truckers.

Data Flows

Summary: The deal includes a temporary solution to keep data flowing between the EU and U.K. until the bloc has adopted a data adequacy decision.

This bridge period starts on the date the new deal takes effect and will last a maximum six months, or end as soon as the EU’s data adequacy decision has been finalized, which is expected to happen in early 2021.

Personal data shipped to the U.K. during this interim period “shall not be considered as transfer to a third country” under EU law, the document says, adding that the U.K. has to suspend its own transfer mechanism.

If the U.K. applies a new transfer tool to ship data to a third country during the interim period, it should “as far as is reasonably possible” inform the EU.

Both sides committed to upholding high levels of data protection standards and to ensure “cross-border data flows to facilitate trade in the digital economy” without imposing limits on where data can be stored or processed.

Energy

Summary: The U.K. won’t have access to the EU’s internal energy market. This was expected but there will be new arrangements in place by April 2022 to make sure that trading is smooth and efficient on interconnectors — huge power cables that run between the U.K. and Europe.

The U.K. is a net importer of electricity and gets 8% of its power from the continent. As an island nation, making sure trading across these interconnectors is efficient is important to Britain.

Making trading smooth will “benefit U.K. consumers and help integrate renewables and other clean technologies onto the grid in line with our domestic commitment to net zero emissions” the U.K. document says.

The deal includes guarantees on security of energy supply.

The U.K. is no longer part of the EU’s emissions trading system but both sides agreed to cooperate on carbon pricing in future and “consider linking their respective systems.”

The U.K.-EU agreement would be suspended if either side breaches their commitments to the 2015 Paris Agreement on climate, according to the summaries.

Professional Services

Summary: The deal means that there will no longer be automatic mutual recognition of professional qualifications, according to the EU’s reading of the treaty.

“Doctors, nurses, dentists, pharmacists, vets, engineers or architects must have their qualifications recognized in each member state they wish to practice in,” the EU said.

This is a loss for the U.K., which had wanted “comprehensive coverage” to ensure there were no “unnecessary” barriers to regulated services. However, the deal does still provide a “framework” for the recognition of qualifications, according to the U.K.’s summary of the agreement.

Business Travel

Summary: There are provisions so U.K. companies and individuals have “legal certainty and administrative clarity they need to continue engaging in business activity and delivering services in the EU when the transition period ends.”

They agreed on length of stays “that broadly reflect the outcome reached in the EU-Japan Economic Partnership Agreement. This includes the ability for U.K. short-term business visitors to travel to the EU for 90 days in any 180-day period.”

“The parties have also agreed not to impose work permits on business visitors for establishment purposes.”

Taxation

Summary: “There are no provisions constraining our domestic tax regime or tax rates,” according to the U.K.

Both sides pledge to “uphold global standards on tax transparency and fighting tax avoidance.”

Agriculture

Summary: Trade of farm goods will benefit from the zero-tariff, zero-quota terms between the two sides. However, there will be new requirements at the border, adding costs and hurdles for shippers.

No tariffs: The lack of levies is “especially important” for the agriculture and fishing sector, as some meat and dairy products would have faced taxes topping 40% under WTO terms, the EU’s summary said.

Extra checks: “U.K. agri-food consignments will have to have health certificates and undergo sanitary and phyto-sanitary controls at Member States’ border inspection posts,” the EU says. The U.K. summary notes that both sides will be able to maintain their own sanitary standards going forward.

Organic products: There will be an equivalence agreement allowing for foods certified organic in one market to be recognized in the other, the U.K. said.

Dispute Settlement

Summary: Disputes on the deal must be negotiated between the EU and the U.K. with no role for the EU courts, according to a U.K. reading of the agreement.

An arbitration panel may rule on some areas and can order one side to resolve the problem or offer compensation.

Failure to do so allows the other side to “suspend obligations” which could mean blocking some access or cooperation.

If there’s a “serious economic, societal or environmental difficulty,” either side can react with time-limited measures.

Law Enforcement

Summary: The deal will allow cooperation between the U.K. and EU, particularly as part of investigations into terrorism and serious crime, including with the exchange of DNA, fingerprint and airline passenger information.

There will be cooperation between U.K. and EU law-enforcement agencies, but the U.K. loses membership in Europol and Eurojust.

Extradition: The U.K. said there will similar cooperation on extraditions to that between the EU and Norway and Iceland, “but with appropriate further safeguards for individuals beyond those in the European Arrest Warrant.”

An arrest warrant “may not be refused on the grounds that the offense may be regarded by the executing State as a political offense, as an offense connected with a political offense or as an offense inspired by political motives.”

Where extradition isn’t possible, there will still be “a path to justice in every case” such as requiring EU countries to refer cases to prosecution.