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Farm body: a bigger German wheat crop is expected by 2025
The German association of agricultural cooperatives released its latest harvest estimation on Thursday. It said that the 2025 wheat production in Germany will grow 15.7% from last season to 21,41 million metric tonnes. The association had previously forecast a German wheat crop in 2025 of 21,36 million tons in March, but this was revised upwards after recent rains in Germany. Rain had reduced the wheat crop in Germany for 2024, causing a significant increase on last year. The association stated that German grains benefitted from the widespread rain in April, after an exceptionally dry February and March with 50% less rainfall than normal. It said that rain was urgently required to prevent dryness and it came at the right time. However, more rain is needed. Germany is Europe's second largest wheat producer, behind France. It is also a major wheat exporter. The association reported that the generally favorable autumn weather conditions allowed German farmers to increase their wheat sowing by 9,9% each year. The German harvest of winter rapeseed (used for the production of vegetable oil and biodiesel) is forecast to increase 9.6% this coming year, reaching 3.97 millions tons. After the National Statistics Office made substantial changes to its estimates of sown areas, the association recalculated earlier figures for Germany's rapeseed production in 2024 and projected yields for 2025. According to the association, the winter barley crop, which is mainly used as animal feed, will increase by 0.9%, reaching 8.80 million tonnes. Spring barley, which is used to make beer and malt, will drop 5.9%, to 1,76 million tons. This is partly due to the mild winter, as it was not necessary to replace winter crops by spring sowing. It said that the grain maize crop (corn) will drop 4.8%, to 4.67 millions tons. Reporting by Michael Hogan, Editing by Kirsten Doovan and David Goode
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Brazil's Usiminas reports positive results, but warns that uncertainty lies ahead
Brazilian steelmaker Usiminas delivered results for the first quarter that were above the market's expectations on Thursday, but warned of challenges in the second half due to high interest rates and uncertainty surrounding trade. Businesses around the globe have been preparing for the impact of U.S. president Donald Trump's sweeping trade tariffs. These have sparked an international trade war, and have led to growing concerns and uncertainty about the global economic situation. The Brazilian company said that it foresaw a difficult and uncertain scenario in the second half 2025. This was stated in a filing of securities after the firm reported its quarterly results. The main reasons for this are the high volume of imports of steel under unfair competition conditions, the impact of the high interest rates on the domestic market, and the uncertainty in the international trade. Steelmakers in Latin America’s largest economy have complained for years about unfair competition, claiming that China floods their market with cheap materials. Usiminas called again on the government do more to control these imports. The Brazilian company reported a net income of 337 million reais (59.08 millions dollars) for the period January-March, an increase of 845% on a year-on-year. This was higher than the 225.02 that analysts had predicted in LSEG's poll. Iron ore sales increased 13% on an annual basis, to 2,11 million tons. Steel sales rose 5%. Usiminas predicted that both should remain stable in the second half of this year.
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What is the Indus waters treaty between India & Pakistan?
India announced that it would suspend the Indus water treaty with Pakistan immediately as part of its efforts to reduce diplomatic relations with Pakistan after militants killed 26 tourists in Kashmir. Before New Delhi's Wednesday decision, the treaty had endured two wars between bitter rivals. It also survived many diplomatic twists and turn. What is the INDUS WATERS TREATY? Both nuclear-armed neighbors disagree on the use of water flowing from rivers in India that drain into the Indus River basin in Pakistan. The Indus Waters treaty was signed in September 1960 by the neighbours after the World Bank mediated the agreement. The agreement divided the Indus River and its tributaries and set up water sharing between the two nations. India received water from the Sutlej River, Beas River, and Ravi river, while Pakistan got the majority of the western rivers, Indus, Jhelum, and Chenab. The treaty does not allow either party to unilaterally terminate or suspend the pact. It has a clear dispute resolution system. What are the concerns about water? For years, the nuclear-armed neighbors have been arguing and disputing several projects along the Indus River and its tributaries. Pakistan's hydropower and irrigation requirements are heavily dependent on the water in this river system. India denies that India diverts water unfairly by building barrages and dams upstream. Pakistan claims this. Pakistan is worried that India's new dams could reduce the flow of the river which supplies 80% its irrigated agricultural production. It asked for an independent expert to be appointed and then for an arbitration court intervened in two recent hydropower project. India accuses Pakistan of prolonging the complaint process and claims that the construction of the Kishanganga hydroelectric project and Ratle is permitted under the treaty. India has sought to modify the treaty in order to avoid such delays. What could the suspension change? India's lack of storage capacity will not affect the flow of water into Pakistan immediately if the accord is suspended. The Indian move could cause uncertainty in Pakistan's agriculture system. Officials in India said that the suspension allows India to stop sharing vital information and data about floods, barrages/dams, or water releases, as well as other important issues. New Delhi is also no longer required to release minimum amounts during lean seasons. HOW HAS PAKISTAN RESPONDED TO THIS DECISION A statement released by Shehbaz Shaif's office on Thursday said that the treaty was a binding international accord brokered and contained no provisions for unilateral suspension. The statement stated that any attempt to divert or stop the flow of water belonging Pakistan, as per the Indus Treaty and usurpation of rights of lower riparians will be treated as an Act of War. The term "lower-riparian" is used to describe Pakistan's downstream position. Ghasharib Shaokat, head of product at Pakistan Agriculture Research (PAR), called the treaty "the backbone" of the agriculture sector in Pakistan. It puts our future agricultural on shaky grounds. Shaokat explained that if water flows are erratic the whole system is affected, especially crops dependent on irrigation, such as rice, wheat and sugarcane. Yields may drop. Costs may rise. Prices of food would probably rise. Small-scale farmers who operate on very thin margins would be the hardest hit. Khalid Hussain Baath - the chairman of Pakistan's national farmers union - characterized this move as one of aggression. Baath, who is in Lahore, said: "This is war." Climate change has already caused a water crisis. The water level has already dropped 20-25% compared to last year due to the low rainfall and lack of snow this year.
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Trelleborg adjusts prices and production in order to offset the 'limited' impact of tariffs
Trelleborg, a Swedish industrial group, said that it sees only a small direct impact of the U.S. tariffs. It expects to manage this through production adjustments and increased prices. Trelleborg will tackle tariff challenges by optimising and localising production, managing prices and ensuring flexibility in global operations. In a recent earnings report, the company said that indirect effects, such as disruptions in supply chains and higher costs of raw materials, could still have a negative impact on business. According to LSEG, the adjusted operating profit before amortization rose to 1,62 billion Swedish Crowns ($169 millions) in the third quarter, which is just below the analysts' expectations of 1,63 billion. Trelleborg reported that sales of seals for the construction industry were low, mainly due to the continued softness on the North American market. They also noted a subdued level of demand from automakers. The company expects the demand to remain the same as in the first quarter, but warns of an unusually high level of uncertainty due to geopolitical factors. Last week, Sandvik, a Swedish company that makes metal-cutting, mining and other equipment, said that it had not seen any impact of U.S. Tariffs on the demand for its product. $1 = 9.5835 Swedish Crowns (Reporting and editing by Milla Nissi in Gdansk)
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Valero Energy announces first-quarter loss due to lower margins and impairment charges
Valero Energy announced a loss for the first quarter compared to a profit a year ago on Thursday. This was due to lower refining profits and approximately $1 billion of impairment charges related its West Coast assets. According to data compiled and analyzed by LSEG, the refinery with the second largest capacity in America posted an adjusted profit per share of 89 cents, exceeding expectations of 42 cents. Lane Riggs, CEO of Lane Riggs Oil Company, said that the quarter saw heavy maintenance throughout the refinery system as well as a "challenging environment" for the renewable diesel segment. U.S. refineries undergo seasonal maintenance in the first quarter of each year to prepare for increased summer demand. However, this temporary maintenance limits revenue and utilization. Valero’s renewable diesel segment operated by the Diamond Green Diesel joint-venture posted an operating loss $141 million. This is a reverse of the $190 millions in operating income reported one year ago. Refining profits also fell, from $1.7 billion to $530 million. Valero was the first major refiner this earnings season to announce results. The industry is bracing for the fallout of the ongoing U.S. China trade tensions. This could reduce demand for refined products like gasoline, jet fuel, and diesel. U.S. refinery margins as measured by the 3-2-1 Crack Spread After hitting multi-year lows in 2018, the market is still under pressure. Valero reported that its quarterly refining profit margins dropped 29.5% from the previous year to $2.49 Billion. The net loss attributable by the company to its stockholders in the three-month period ended March 31 was $595m, or $1.90 a share. This compares with a profit of $1.2bn, or $3.75 / share last year. (Reporting by Arunima Kumar in Bengaluru; Editing by Maju Samuel)
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Czechs sign 18 billion dollar nuclear power agreement after EDF appeals are rejected
The Czech Republic’s competition authority UOHS announced on Thursday that it had rejected French Group EDF’s appeals regarding the country’s multi-billion dollar bid for new nuclear units, in which it was defeated by South Korea’s KHNP. The rejection opens the door for KHNP, CEZ and the Czech government to sign contracts with a minimum value of 400 billion crowns (18.22 billion dollars) plus inflation. The decision of the Competition Authority confirms a previous verdict to which EDF appealed. Petr Mlsna, the chair of the Competition Authority, told a press conference that "there is nothing stopping (CEZ subsidiary EDU II) from concluding the contract with KHNP as the preferred bidder at this stage." He said that the decision invalidated a court order which had prevented any contract from being concluded. Zbynek Stajura, the Czech Finance Minister, said earlier this month that he expects contracts to be signed in this quarter. CEZ, a 70% owned state company, plans to build two nuclear power plants of 1,000 megawatts each at its Dukovany plant. This will be the largest energy investment in the country's history. CEZ and government selected KHNP to build new units in July 2024, but left the option for more units open later. (Reporting and editing by Barbara Lewis, Jason Hovet, Jan Lopatka)
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INSG predicts a nickel surplus of 198,000 tons in 2025.
The International Nickel Study Group, (INSG), on Thursday predicted a surplus of nickel market of 198,000 tons by 2025. The group forecasts that global primary nickel consumption will be 3.537 millions tons in this year, and global production of primary nickel at 3.735million tons. Lisbon-based group stated that the market balance for 2023 would be a surplus 170,000 tons. This will rise to 179,000 tonnes in 2024. The primary use of nickel in the world was 3.193 millions tons and 3.347 tons respectively. The report stated that delays in issuing mining permits (RKABs), led to nickel ore shortages on the market. It also added that the impact of new royalties in Indonesia's mining sector had yet to be fully assessed. The report stated that the primary nickel output in China will also increase due to increased production of nickel cathode, nickel sulphate, and other nickel-containing products. Nickel prices, which are used in electric vehicles and stainless steel, have fallen by over 7% since 2024. They are up about 3% this year. (Reporting and editing by Anjana Anil in Bengaluru, Ashitha Shivaprasad)
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PG&E's lower expenses cause it to miss first-quarter earnings estimates
PG&E Corp. missed its first-quarter profit estimate on Thursday as it was hit by higher operating expenses and interest costs. Interest rates that are higher for longer increases the borrowing costs of utility companies. These companies need to borrow more money for their expenses, such as grid maintenance. PG&E's interest costs rose by 2.7% in the first quarter of this year, to $734 millions. In January, multiple wildfires scorched thousands of acres in Los Angeles. This is expected to be the costliest natural disaster in U.S. History. Electric utilities in the area have also been under increased scrutiny. PG&E will upgrade its wildfire safety systems and underground powerlines by nearly 700 miles and 500 miles between 2025-2026. PG&E reported that the average residential electric rate in March was lower than it had been a year before. It expects natural gas rates to stay flat until 2025. LSEG data shows that the company's total revenue for the quarter was $5.98 Billion, which is less than analysts' estimates of $6.14 Billion. Total operating expenses for the quarter ending March 31 were up 3.8% to $4.76 billion. The Oakland-based company confirmed its forecast of adjusted core earnings between $1.48 to $1.52 per common share. Analysts had expected $1.50 a share. Utility also reported that it added almost 3,000 new customers to its electric grid in the last quarter. PG&E's adjusted profit per share was 33 cents, compared to the analyst average of 34 cents. (Reporting from Bengaluru by Pooja menon; editing by Maju Sam)
Couche-Tard and 7-Eleven's store divestiture plans face an early obstacle
The plan of convenience store giants Couche-Tard & Seven & i to sell thousands of stores in North America, to reduce regulatory concerns before a possible merger, is being tested by rival bidders.
According to several antitrust experts and people who are familiar with the situation, it is likely that the two store operators will struggle to attract offers from other convenience stores chains. They may be wary about their own antitrust risks from a potential deal. Seven & i is the owner of the 7-Eleven chain, which operates more than 12,000 convenience stores in the U.S.
Sources said that so far, private equity firms have been the most interested in buying the stores. The potential for a headache for Canada’s Couche-Tard, and Japan’s Seven & i is that U.S. regulators frown on private equity firms buying divested stores as they are not likely to be long-term investors.
Experts say that the U.S. Federal Trade Commission doesn't view private equity firms as attractive buyers of divested retail stores because the model is based on short-term profits.
Michio Suzuki is an antitrust partner with Baker McKenzie, based in Tokyo. From their perspective, the buyer of the divested stores should be strong enough so that they can run them as a competitive unit.
The companies have proposed a divestiture package that includes more than 2,000 U.S.-based stores. Experts said that there was no precedent in which private equity ownership of convenience store chains would be created after a large merger.
Financial acquirers bought grocery and dollar store divested from larger retail mergers. However, they have had mixed success running these stores.
When Dollar Tree bought Family Dollar for $9 billion in 2015, the FTC ordered the companies to divest hundreds stores. Dollar Tree selected investment firm Sycamore as the buyer of 330 stores. But two years later Sycamore sold them to Dollar General as it was no longer able to operate the stores as a standalone business.
Sources familiarized with Couche-Tard & Seven & i argue that their divestiture packages consist of competitive stores across many states, which a private equity company can successfully operate.
Five sources claim that buyout firms have shown early interest in the companies. They are eager to explore owning scaled-up convenience stores with a national footprint. Three sources stated that some firms are cautious when it comes to bidding for an asset that will be the result of a merger which is still not signed.
KROGER ALBERTSONS FALLOUT
In recent years, antitrust regulators around the world have been increasingly challenging large retail mergers.
In order to avoid the overhang of a failed mega-deal in U.S. groceries, Couche-Tard & Seven & i took the unusual step before merging talks began: they preemptively shrank their combined potential business in North America.
Seven & i wants to avoid a repetition of "the disastrous story" of Kroger/Albertsons. Seven & i received a warning from the FTC about an investigation of a possible merger with Couche-Tard - a rare occurrence before a formal deal is signed.
The Kroger-Albertsons merger was announced for the first time in 2022. However, despite numerous attempts to convince U.S. Antitrust authorities to approve the deal - such as a $2.9 billion proposed divestiture of C&S Wholesale Grocers' 579 stores - this deal has not been approved. The FTC rejected C&S and called the divestiture packages a "hodgepodge" of unconnected shops.
Alex Livshits is a partner with the law firm Fried Frank. He said, "Any target of a large-scale retail-store merger will take notice and become very cautious following that." Since August, 7-Eleven's owner has rejected Couche-Tard takeover attempts out of fear that it will suffer the same fate. The grocers gave up their $25 billion merger in December after significant regulatory opposition. This has been argued before as a cautionary story for retail mergers.
Couche-Tard has agreed to the proposal of early joint regulatory work by Seven & I to alleviate potential antitrust concerns.
Seven & I is the largest operator of convenience stores in the United States, with approximately 12,650. Couche-Tard is second-largest with about 7,100. Couche-Tard, with approximately 7,100 stores, is the second-largest operator in terms of convenience stores in the United States. The combined company would almost be seven times larger than the next biggest competitor, Casey's.
There is a risk when you divest to a third-party that's legally binding, said Kathy O'Neill. She's a partner with Fried Frank and a former member of the Department of Justice's Antitrust Division.
She said, "The agency may not like the buyer that you have selected or they might decide to divest more assets or store."
Normally, companies seek regulatory approval after signing contracts.
Experts said that the failure of the Kroger and Albertsons merger has provided a road map to successful regulatory approval in future retail mergers. It is a lesson on what not do. Experts said that Couche-Tard's and Seven & i's pre-emptive action also gives them the opportunity to get regulators on board with the idea. Reporting by Abigail Summerville and Anton Bridge, New York; Additional reporting by Rocky Swift, Tokyo; Editing and production by Anirban Sen, Edwina G Gibbs and Matthew Lewis.
(source: Reuters)