Synthetic Pesticide Bans to Boost Demand for Biopesticides and Organic ProductsApr2

Daily Intelligence Briefing

Identifying Change-Driven Investment Themes

Monday, April 1, 2019

Agribusiness

The Latest $80 Million Cancer Judgment Is Just the Beginning of Roundup’s Woes

On Wednesday afternoon, German chemical giant Bayer sustained another costly legal defeat related to Monsanto, the US seed and pesticide giant it subsumed last year. A US District Court jury in San Francisco awarded plaintiff Edward Hardeman $80.3 million—including $75 million in damages—after ruling that Monsanto’s blockbuster glyphosate-based Roundup herbicides had caused his case of non-Hodgkin lymphoma.

The company’s share price has plunged nearly 25 percent since the phase-one verdict on March 18, and by more than 40 percent since mid-August 2018, when a California Superior Court jury awarded school groundskeeper Dewayne Johnson $289 million in damages after ruling that Roundup exposure had caused his non-Hodgkin lymphoma. (The award was later reduced to $78 million—roughly equal to the damages decided in the Hardeman case.)

If juries keep deciding against Bayer and awarding large damages, the company faces catastrophic losses. According to the Wall Street Journal, Bayer still faces lawsuits from 11,200 farmers, gardeners, and other Roundup users. If just about 750 of them reach the $75 million to $80 million level awarded to Hardeman and Johnson, total payouts would approach $60 billion—equal to Bayer’s current market valuation.

Read the full article from Mother Jones +

Agribusiness

Toxic Weed Killer Found in Almost All Beer and Wine Brands (Including Organic)

A new report by public-interest watchdog group U.S. PIRG has revealed that most of the top beers and wines in the United States are contaminated with glyphosate, the main ingredient in Monsanto’s weed killer, Roundup.

Roundup is a controversial herbicide that has been linked to cancer and other health problems in studies by the World Health Organization and the State of California, among others. In recent years, thousands of people have blamed Monsanto for being a key contributor to their cancer, leading to calls across the world for the weed-killer to be banned.

The advocacy group tested five wines and fifteen beers. The beer brands tested included top-sellers Budweiser, Coors, Miller Lite, Sam Adams, Samuel Smith Organic, and New Belgium. The wine brands tested included Beringer, Barefoot and Sutter Home. Out of the 20 brands tested, glyphosate was found in 19 of them – including in 3 out of 4 organic beers and wines.

The group warned that while the level of contamination isn’t necessarily deadly, the discovery raises potential health concerns.

Read the full article from Stillness in the Storm +

Agribusiness

Weed killer residues found in 98 percent of Canadian honey samples

As U.S. regulators continue to dance around the issue of testing foods for residues of glyphosate weed killers, government scientists in Canada have found the pesticide in 197 of 200 samples of honey they examined.

The authors of the study, all of whom work for Agri-Food Laboratories at the Alberta Ministry of Agriculture and Forestry, said the prevalence of glyphosate residues in honey samples – 98.5 percent – was higher than what was reported in several similar studies done over the last five years in other countries.

Glyphosate is the world’s most widely used herbicide and is the active ingredient in Roundup brands as well as hundreds of others sold around the world for agriculture and other purposes. Use has grown dramatically over the last 25 years and consumers have become concerned about residues of the herbicide in their food.

The data provides fresh evidence that glyphosate herbicides are so pervasive in the environment that residues can be found even in a food that is not produced by farmers using glyphosate. The researchers noted in their report that they ran into delays trying to calibrate their testing equipment “due to difficulties encountered in obtaining a honey sample which did not contain traces of glyphosate.”

Read the full article from Environmental Health News +

Agribusiness

A New Bill Proposes to Ban Chlorpyrifos Nationwide

New Mexico senator Tom Udall reintroduced a bill today that would ban the widely used pesticide chlorpyrifos—a chemical adapted from World War II–era nerve gases—from being sprayed on fruits and vegetables grown in the United States.

Udall’s bill joins a similar measure in the House of Representatives, introduced by New York congresswoman Nydia Velázquez earlier this year. Both address the continued failure by the U.S. Environmental Protection Agency to ban the chemical, despite the agency’s own research showing the harm it can do. “These congressional leaders have had enough of the Trump administration playing politics with children’s health and are taking matters into their own hands,” Sass says.

More than a dozen studies have now concluded that even low levels of chlorpyrifos can lead to developmental delays, ADHD, and drops in IQ. Alongside children, farmworkers and those living in agricultural communities also face higher exposure and, therefore, higher risks.

NRDC, together with the Pesticide Action Network, petitioned the agency to ban the chemical in 2007, which nearly came to pass under President Obama in 2016. But soon after taking office, the Trump administration reversed course.

Read the full article from The Natural Resources Defense Council +

Agribusiness

EU bans UK’s most-used pesticide over health and environment fears

One of the world’s most common pesticides will soon be banned by the European Union after safety officials reported human health and environmental concerns. Chlorothalonil, a fungicide that prevents mildew and mould on crops, is the most used pesticide in the UK, applied to millions of hectares of fields, and is the most popular fungicide in the US. Farmers called the ban “overly precautionary”.

But EU states voted for a ban after a review by the European Food Safety Authority (Efsa) was unable to exclude the possibility that breakdown products of the chemical cause damage to DNA. Efsa also said “a high risk to amphibians and fish was identified for all representative uses”. Recent research further identified chlorothalonil and other fungicides as the strongest factor linked to steep declines in bumblebees.

Regulators around the world have falsely assumed it is safe to use pesticides at industrial scales across landscapes, according to a chief scientific adviser to the UK government. Other research in 2017 showed farmers could slash their pesticide use without losses, while a UN report denounced the “myth” that pesticides are necessary to feed the world.

Chlorothalonil has been used across the world since 1964 on barley and wheat, as well as potatoes, peas and beans. The ban will be passed formally in late April or early May and then enter into force three weeks later, the commission spokeswoman said.

Read the full article from The Guardian +

SHORT

Autos

LONG

Gold & Gold Miners

SHORT

Long-Dated U.S. Treasuries

LONG

Oil & U.S. Energy

SHORT

U.S. Housing

LONG

Video Gaming

LONG

CRISPR

LONG

Industrials

LONG

Materials

LONG

Robotics & Automation

SHORT

U.S. Pharmaceuticals

LONG

3D Printing

Week Ahead

This week the US will publish the March’s jobs report, alongside ISM PMIs, ADP employment change, retail sales, durable goods orders and construction spending. Elsewhere, the RBA and the RBI will decide on monetary policy, while the ECB will release its meeting minutes. Important data include: UK Markit PMIs; Eurozone inflation, unemployment and retail sales; Germany factory orders and industrial output; Japan business morale; China Caixin PMIs; and Australia trade balance, NAB business confidence and retail sales.

Click here to access the data +

US Personal Income Rises Less than Expected in February

US personal income rose 0.2 percent month-over-month in February 2019, rebounding from a 0.1 percent fall in the previous month but below market expectations of a 0.3 percent gain.

Click here to access the data +

US Personal Spending Rebounds Less than Expected

Personal spending in the United States edged up 0.1 percent from a month earlier in January, after falling 0.6 percent in December, the most in a decade. The latest reading came in below market expectations of a 0.3 percent gain.

Click here to access the data +

PCE Prices in the US Fall 0.1% in January

The personal consumption expenditure (PCE) price index in the United States edged down 0.1 percent month-over-month in January of 2019, reversing from a 0.1 percent rise in December. Excluding food and energy, PCE prices were up 0.1 percent, below 0.2 percent in December. Year-on-year, the PCE price index advanced 1.4 percent, below an upwardly revised 1.8 percent in December and the core index rose 1.8 percent, also lower than an upwardly revised 2 percent in December.

Click here to access the data +

US Consumer Morale Revised Higher

The University of Michigan’s consumer sentiment for the US was revised higher to 98.4 in March 2019 from a preliminary 97.8, as the current economic conditions sub-index came in stronger than initially thought. The latest reading was slightly above the average of 97.2 recorded in the past 26 months.

Click here to access the data +

US New Home Sales at Near 1-Year High

Sales of new single-family houses in the United States rose 4.9 percent from the previous month to a seasonally adjusted annual rate of 667 thousand in February of 2019, following an upwardly revised 636 thousand in January and beating market expectations of 620 thousand. It is the highest reading since March of 2018.

Click here to access the data +

Chicago PMI Lower than Expected

The MNI Chicago Business Barometer for the US fell to 58.7 in March of 2019 from 64.7 in February, below market expectations of 61. Considering Q1, the MNI Chicago PMI averaged 60, down 3.5 percent from Q4 2018 and 3.3 percent from Q1 2018.

Click here to access the data +

Markets

Markets

Surprise: This Inverted Yield Curve Is Good News For The Dow Jones, Economy

The inverted yield curve has set off alarm bells that a recession may loom around the corner. Historically, that’s been a good bet, and recessions almost always unleash bear markets for the Dow Jones, S&P 500 and Nasdaq. But this yield-curve inversion, which may be short-lived, looks different. While it raises some concern about the long-term economic outlook, the recent inverted yield curve actually is welcome in the near term.

Basic economic theory holds that investors will demand extra compensation to cover the risk of longer-term bonds. That’s known as the term premium. At the moment, that no longer seems true. Some of the reasons are positive, but not all of them.

Inflation has been quiet for so long that investors are less concerned about a future upsurge. Meanwhile, global bond yields are negative in places like Germany and Japan. Quantitative easing by global central banks has helped push down yields, sending foreign buyers on a global quest for better returns. That demand has helped bid up U.S. Treasuries and pull down yields. Even at 2.40%, the 10-year Treasury yield looks relatively tasty to far-flung investors.

But there are questions about whether this will be a long-term phenomenon. Will aging demographics, unaffordable pensions and an excess of government debt keep interest rates from normalizing long term? Instead of an inflationary dynamic, the worry is that gravity has shifted and deflation will be a persistent risk that central banks like the Fed will have a harder time fighting.

Read the full article from Investor’s Business Daily +

Finance

Payments

Digital Payments’ $95 Trillion Tide Undaunted by Cash Holdouts

Even as some U.S. cities seek to protect low-income consumers by barring stores and restaurants from shunning physical currency, digital payments are building acceptance around the world. A Citigroup Inc. index that measures the readiness of 84 countries to adopt electronic payments has increased 5.5 percent in the past five years, the bank said in a report this week.

A 10 percent increase in the adoption of digital money would result in a $150 billion boost to consumer spending, Citigroup found. Governments, meanwhile, would pocket $100 billion more in incremental taxes with increased payment digitization.

The movement away from cash has proven a boon for payments companies. Mastercard Inc. shares have gained 38 percent in the past year, and Visa Inc.is up 32 percent, compared with a 15 percent increase in the S&P 500 Information Technology Index. The payments networks are each up more than 1,000 percent over the past decade, more than double the information tech index and triple the S&P 500.

But in the U.S., politicians warn that the trend will marginalize disadvantaged residents — those lacking the means to maintain a bank account or without access to electronic payments, a market that’s been estimated to be worth $95 trillion globally. In February, Philadelphia prohibited discrimination against customers who want to use cash, and lawmakers in San Francisco and New York are considering similar measures.

Read the full article from Bloomberg +

Payments

Swiss luxury brands embrace bitcoin

One of Switzerland’s most prestigious hotels, a luxury car dealer and a wine merchant will soon start accepting payments in bitcoin. The trio have signed up to new payments service inapay that allows customers to pay in bitcoin without having to handle cryptocurrencies themselves.

The move follows on from Switzerland’s largest online retailer, Digitec Galaxus, announcing earlier this month that it will accept an array of cryptocurrencies as payment for its goods. The Dolder Grand hotel in Zurichexternal link, car dealership Kessel Autoexternal link and House of Winesexternal link have now joined the race to attract a new breed of customer dedicated to the decentralised digital currency movement.

Starting in May they will accept bitcoin through the inapay application provided by Zug-based blockchain services company Inactaexternal link. Customers will pay from their bitcoin wallets and the transaction will be sent to Swiss crypto exchange Bity, which will convert the payment to traditional currencies before sending the completed transaction to the recipient company.

The application could potentially bridge a gaping chasm between the worlds of crypto and traditional currencies in the retail sector. This would allow the likes of bitcoin to be freely used as a payment method alongside Swiss francs, moving the cryptocurrency from a largely speculative investment vehicle to a genuine medium of exchange.

Read the full article from Swissinfo +

Construction & Real Estate

Greenhouses

Cannabis company builds 850K-square-foot greenhouse to meet high demand

Cronos GrowCo, a joint venture between cannabis company Cronos and a group of investors, is building an 850,000-square-foot greenhouse in Ontario that will produce up to 70,000 kilograms (154,323 pounds) of cannabis each year, Cronos CEO Mike Gorenstein told analysts on a company earnings call Tuesday. Gorenstein expects the greenhouse to become operational in 2020. The facility will support growing demand for cannabis after the substance was legalized in Canada last October.

Two of Cronos’ recreational brands, COVE and Spinach, currently “are distributed in Ontario, British Colombia, Nova Scotia, Prince Edward Island and Saskatchewan,” Gorenstein said. “As our production capacity grows, we intend to expand distribution into additional Canadian provinces and territories.”

Cronos sees Canada as a launching pad for the company, which is seeking a global presence. Cronos is breaking ground on greenhouses in other parts of the world and expanding its international distribution.

“When we think about Canada, the value that we see is having the opportunity to develop the processes and products that ultimately will be spread globally,” Gorenstein said. “At this stage of our business, we are very cognizant of this delicate balance while our supply ramps to meet the growing demands of our global distribution.”

Read the full article from Supply Chain Dive +

Services

Internet Publishers

Europe passes controversial online copyright reforms

The European Parliament has finally done it: approved controversial copyright reforms that could have significant repercussions for the internet in Europe. The set of copyright rules known as the Directive on Copyright in the Digital Single Market — the EU Copyright Directive — has been the subject of debate for several years.

While it is uncontroversial in many regards, two facets of the directive have caused the internet to freak out. Article 11, which has been dubbed the “link tax,” stipulates that websites pay publishers a fee if they display excerpts of copyrighted content — or even link to it. This could obviously have major ramifications for services such as Google News.

Then there is Article 13, dubbed the “upload filter,” which would effectively make digital platforms legally liable for any copyright infringements on their platform. Some fear that it would stop people from being able to share content — even GIF-infused memes — on social networks.

“This is about creating a fair and functioning market for creative works of all kinds on the internet,” said Robert Ashcroft, CEO of U.K.-based royalties collection body PRS for Music, in the wake of today’s vote. “It’s about making sure that ordinary people can upload videos and music to platforms like YouTube without being held liable for copyright — that responsibility will henceforth be transferred to the platforms. This is about modernizing the internet, and it’s a massive step forward for consumers and creators alike.”

Read the full article from Venture Beat +

Waste Recycling

China plans to cut waste imports to zero by next year: official

China aims to cut solid waste imports to zero by next year as it looks to reduce pollution and encourage recyclers to treat soaring volumes of domestic trash, a senior environment ministry official said on Thursday.

Since the 1980s, China has taken in hundreds of millions of tonnes of foreign paper, plastic, electronic waste and scrap metal for recycling by an army of backyard workshops. Beijing began restricting deliveries last year, while customs authorities have launched a series of crackdowns on waste smuggling, leading to hundreds of arrests.

“China will further tighten restrictions of waste imports and eventually aims to realise zero waste imports by 2020,” Qiu Qiwen, director of the Ministry of Ecology and Environment’s solid waste division, said on the sidelines of a briefing. China imported 22.6 million tonnes of solid waste last year, down 47 percent from a year earlier, the ministry said.

In December, Beijing also vowed to ban imports of more varieties of scrap steel, copper and aluminum starting from July, and the veto will be extended to products such as scrap stainless steel and titanium at the end of this year.

Read the full article from Reuters +

Manufacturing & Logistics

Agribusiness

The Latest $80 Million Cancer Judgment Is Just the Beginning of Roundup’s Woes

On Wednesday afternoon, German chemical giant Bayer sustained another costly legal defeat related to Monsanto, the US seed and pesticide giant it subsumed last year. A US District Court jury in San Francisco awarded plaintiff Edward Hardeman $80.3 million—including $75 million in damages—after ruling that Monsanto’s blockbuster glyphosate-based Roundup herbicides had caused his case of non-Hodgkin lymphoma.

The company’s share price has plunged nearly 25 percent since the phase-one verdict on March 18, and by more than 40 percent since mid-August 2018, when a California Superior Court jury awarded school groundskeeper Dewayne Johnson $289 million in damages after ruling that Roundup exposure had caused his non-Hodgkin lymphoma. (The award was later reduced to $78 million—roughly equal to the damages decided in the Hardeman case.)

If juries keep deciding against Bayer and awarding large damages, the company faces catastrophic losses. According to the Wall Street Journal, Bayer still faces lawsuits from 11,200 farmers, gardeners, and other Roundup users. If just about 750 of them reach the $75 million to $80 million level awarded to Hardeman and Johnson, total payouts would approach $60 billion—equal to Bayer’s current market valuation.

Read the full article from Mother Jones +

Agribusiness

Toxic Weed Killer Found in Almost All Beer and Wine Brands (Including Organic)

A new report by public-interest watchdog group U.S. PIRG has revealed that most of the top beers and wines in the United States are contaminated with glyphosate, the main ingredient in Monsanto’s weed killer, Roundup.

Roundup is a controversial herbicide that has been linked to cancer and other health problems in studies by the World Health Organization and the State of California, among others. In recent years, thousands of people have blamed Monsanto for being a key contributor to their cancer, leading to calls across the world for the weed-killer to be banned.

The advocacy group tested five wines and fifteen beers. The beer brands tested included top-sellers Budweiser, Coors, Miller Lite, Sam Adams, Samuel Smith Organic, and New Belgium. The wine brands tested included Beringer, Barefoot and Sutter Home. Out of the 20 brands tested, glyphosate was found in 19 of them – including in 3 out of 4 organic beers and wines.

The group warned that while the level of contamination isn’t necessarily deadly, the discovery raises potential health concerns.

Read the full article from Stillness in the Storm +

Agribusiness

Weed killer residues found in 98 percent of Canadian honey samples

As U.S. regulators continue to dance around the issue of testing foods for residues of glyphosate weed killers, government scientists in Canada have found the pesticide in 197 of 200 samples of honey they examined.

The authors of the study, all of whom work for Agri-Food Laboratories at the Alberta Ministry of Agriculture and Forestry, said the prevalence of glyphosate residues in honey samples – 98.5 percent – was higher than what was reported in several similar studies done over the last five years in other countries.

Glyphosate is the world’s most widely used herbicide and is the active ingredient in Roundup brands as well as hundreds of others sold around the world for agriculture and other purposes. Use has grown dramatically over the last 25 years and consumers have become concerned about residues of the herbicide in their food.

The data provides fresh evidence that glyphosate herbicides are so pervasive in the environment that residues can be found even in a food that is not produced by farmers using glyphosate. The researchers noted in their report that they ran into delays trying to calibrate their testing equipment “due to difficulties encountered in obtaining a honey sample which did not contain traces of glyphosate.”

Read the full article from Environmental Health News +

Agribusiness

A New Bill Proposes to Ban Chlorpyrifos Nationwide

New Mexico senator Tom Udall reintroduced a bill today that would ban the widely used pesticide chlorpyrifos—a chemical adapted from World War II–era nerve gases—from being sprayed on fruits and vegetables grown in the United States.

Udall’s bill joins a similar measure in the House of Representatives, introduced by New York congresswoman Nydia Velázquez earlier this year. Both address the continued failure by the U.S. Environmental Protection Agency to ban the chemical, despite the agency’s own research showing the harm it can do. “These congressional leaders have had enough of the Trump administration playing politics with children’s health and are taking matters into their own hands,” Sass says.

More than a dozen studies have now concluded that even low levels of chlorpyrifos can lead to developmental delays, ADHD, and drops in IQ. Alongside children, farmworkers and those living in agricultural communities also face higher exposure and, therefore, higher risks.

NRDC, together with the Pesticide Action Network, petitioned the agency to ban the chemical in 2007, which nearly came to pass under President Obama in 2016. But soon after taking office, the Trump administration reversed course.

Read the full article from The Natural Resources Defense Council +

Agribusiness

EU bans UK’s most-used pesticide over health and environment fears

One of the world’s most common pesticides will soon be banned by the European Union after safety officials reported human health and environmental concerns. Chlorothalonil, a fungicide that prevents mildew and mould on crops, is the most used pesticide in the UK, applied to millions of hectares of fields, and is the most popular fungicide in the US. Farmers called the ban “overly precautionary”.

But EU states voted for a ban after a review by the European Food Safety Authority (Efsa) was unable to exclude the possibility that breakdown products of the chemical cause damage to DNA. Efsa also said “a high risk to amphibians and fish was identified for all representative uses”. Recent research further identified chlorothalonil and other fungicides as the strongest factor linked to steep declines in bumblebees.

Regulators around the world have falsely assumed it is safe to use pesticides at industrial scales across landscapes, according to a chief scientific adviser to the UK government. Other research in 2017 showed farmers could slash their pesticide use without losses, while a UN report denounced the “myth” that pesticides are necessary to feed the world.

Chlorothalonil has been used across the world since 1964 on barley and wheat, as well as potatoes, peas and beans. The ban will be passed formally in late April or early May and then enter into force three weeks later, the commission spokeswoman said.

Read the full article from The Guardian +

Plastics

European Union Bans Single-Use Plastic Fortune

European Union legislators have voted to ban single-use plastic used by consumers, in an effort to curb ocean pollution. The 10 products affected include plates, balloon sticks, food and beverage containers, cutlery, straws, and stirrers. The legislation, approved Wednesday, will take effect in 2021, CNN reports.

In addition to the single-use plastic ban, member states of the European Parliament will be required by 2029 to collect and recycle at least 90% of beverage bottles. Tobacco companies will also play a role, covering the cost of collecting littered cigarette butts, which are the second most littered single-use plastic items, according to Al Jazeera.

The “polluter pays” model will be applied to other producers of products such as plastic cups, sanitary towels, and wet wipes, which will all be required to explain to consumers how to properly dispose of each item. Packaging will also include warnings about the environmental impacts of such products. The effort will place more responsibility on producers of pollutive plastics, instead of placing blame solely on consumers.

Curbing plastic pollution could avoid nearly $25 billion-worth of environmental damages by 2030, according to TIME.

Read the full article from Fortune +