Previously, only seven were allowed to trade the product with the neighboring state
Russia and China have agreed to expand the number of regions that are licensed to supply grain to China, Russia’s veterinary and phytosanitary surveillance department, Rosselkhoznadzor, said in a statement on Friday.
“On February 4, as part of the visit of Russian President Vladimir Putin to China and the negotiations between the head of state and Chairman of the People’s Republic of China Xi Jinping, bilateral agreements were adopted that expand the list and volume of grain supplied from Russia to China,” Rosselkhoznadzor said in its report.
Changes were made to a number of prior agreements, expanding both the list of regions that are allowed to trade, and the selection of products. Now all Russian regions are allowed to supply wheat, barley and alfalfa to China, while the authorities are also exploring the possibility of supplying peas.
“The changes cancel the regionalization of shipments of wheat and barley from Russia to China. Now these grain crops can be imported to China from all over the Russian Federation,” the report says.
Previously, the list of suppliers included only seven Russian regions – Altai and Krasnoyarsk Territories, Chelyabinsk, Omsk, Novosibirsk, Amur, and Kurgan Regions. The list did not include the country’s leading grain-producing regions.
Main crude benchmarks hit their highest levels in seven years amid supply concerns
Oil prices continue to move toward the $100 a barrel threshold amid growing supply concerns, as OPEC and allied producers are slow to boost output. Ransomware attacks on German storage facilities and winter storms in the US are also pushing prices higher.
European benchmark Brent Crude closed around $92.8 per barrel on Friday, its highest level in more than seven years, surging 1.8%. European oil majors Shell and BP also rallied on Brent gains, jumping 3%. Shell earlier reported that its annual profits quadrupled in 2021.
The Brent rally followed ransomware attacks on two German fuel storage facilities, Mabanaft and Oiltanking, earlier this week. A number of other storage sites across Europe also reported IT issues, but those have not been confirmed as related to the attacks in Germany.
Meanwhile, US benchmark West Texas Intermediate (WTI) also hit its peak since 2014, jumping nearly 2% and topping $91.9 a barrel. Experts link the gains to the winter storm that enveloped central and northeast regions of the US on Thursday and partly stalled oil production in the Permian Basin, the US’ largest shale site. Both benchmarks on Friday were on course for a seventh consecutive weekly gain.
Oil has been on the rise recently amid supply concerns and growing tensions between Russia and Ukraine, which could threaten Europe’s energy supply. Also, investors have not been happy with cautious steps to boost oil output taken by the Organization of the Petroleum Exporting Countries and allies (OPEC+), including Russia. The group last year agreed to gradually raise production by 400,000 barrels, and said earlier this week that it would stick to this plan in March. However, many OPEC+ producers are struggling to meet the target output increase. For instance, OPEC’s second-largest oil producer Iraq failed to make its OPEC+ quota in January, according to data from state-owned marketer SOMO.
Many analysts warned last year that amid the mounting troubles oil may reach $100 and more per barrel in the year to come.
Key vehicles and eight factories in US, Mexico and Canada will be affected
Major US carmaker Ford will suspend or cut production at eight of its factories in the US, Mexico and Canada for at least one week, a spokeswoman told Reuters on Friday.
Factories in Michigan, Chicago and in Cuautitlan, Mexico will stop work, while the Ford factory in Kansas City will run only one shift for the production of Ford Transit cargo vans. The carmaker also plans to reduce the schedule at factories in Dearborn, Kentucky and Louisville, and has slashed overtime at the Oakville factory in Canada. The changes will lower the output of vehicles such as Ford Bronco and Explorer SUVs, as well as the Ford F-150 and Ranger pickups, the Ford Mustang Mach-E electric crossover and the Lincoln Aviator SUV.
The company says the semiconductor chip shortage is to blame for the changes, which are planned to be in place for one week, starting on February 7.
Also due to the chip shortage, Ford missed Wall Street expectations when it reported fourth-quarter earnings results earlier this week. The carmaker’s shares plunged 9.7% on Friday, but started to crawl back up in the after hours trading, regaining 0.67%. Ford warned that the persistent shortages would lead to a further drop in its vehicle production in the current quarter, ending in March. The company has forecast a slower recovery in car production in the first half of 2022, but was hopeful that output volumes will increase by year’s end.
The index of global food costs advanced 1.1% last month
A new report by the Food and Agriculture Organization (FAO) of the United Nations showed that global food prices soared last month, led by a jump in vegetable oils and dairy. The index of prices, up by 1.1%, is edging closer to 2011’s all-time high, the research showed.
The fallout from an energy crisis, reduced export availability, and other supply-side constraints, especially labor shortages and unfavorable weather, have pushed prices higher, the FAO said.
The vegetable oils index surged 4.2% month-on-month in January to reach record levels. Quotations for all major oils rose, supported in part by rising crude oil prices. The dairy price index also increased 2.4%, its fifth consecutive monthly rise, with the steepest gains registered by skim milk powder and butter. The cereal price index was up just 0.1%, with maize posting a 3.8% gain on the month, according to the FAO.
Meat prices edged up in January, while the sugar price index decreased 3.1% from the previous month due partly to favorable production prospects in majorexporters India and Thailand, the report said.
Meanwhile, world wheat prices dropped 3.1% on the back of large harvests in Australia and Argentina. “For 2022, global wheat plantings are expected to expand, buoyed by mostly conducive weather conditions in the northern hemisphere, although high input costs could deter a larger expansion,” the FAO said.
The UN body has raised its projection of global cereal production in 2021 to 2.793 billion tons from a previous estimate of 2.791 billion tons.
Higher food prices have contributed to a broader surge in inflation as economies recover from the Covid-19 crisis. The FAO has warned that higher costs are putting poorer populations at risk in countries reliant on imports.
The US Treasury Department says the rapidly growing token market could facilitate the illicit art trade
The US Department of the Treasury says the non-fungible tokens (NFTs) market could become a platform for money laundering using high-value art in a study published on Friday.
“The emerging digital art market, such as the use of non-fungible tokens (NFT), may present new risks, depending on the structure and market incentives,” the department stated in a press release. NFTs are units of digital data stored and traded online, which mostly comprise photos, videos and audio recordings.
In their 40-page study, analysts say high-value art is already used for money laundering but, most likely, not for financing terrorism. Physical art is easy to transport, and a number of art pieces have already been used to cover up illegally obtained funds, the study said.
Meanwhile, NFTs and the broader digital art sector could be used to facilitate more illegal transactions in the high-value art market, the study suggests.
“Recent sales of high-profile pieces of physical and digital art involving NFTs, including NFT-authenticated works such as Beeple’s ‘Everydays: The First 5000 Days’, which sold at a Christie’s auction for more than $69 million, indicate that this nascent art sector has reached similar valuations as traditional art mediums,” the document read.
The authors stated that licensed auction houses and art dealers “are increasingly offering NFTs,” pointing to platforms like Dapper Labs, OpenSea and SuperRare. However, if these platforms are considered virtual asset service providers (VASP) by the Financial Action Task Force (FATF), and are regulated as such, they may become subject to existing anti-money laundering (AML) laws. Still, the study says there are ways for art-related digital transactions to bypass regulators.
“NFTs can be used to conduct self-laundering, where criminals may purchase an NFT with illicit funds and proceed to transact with themselves to create records of sales on the blockchain. The NFT could then be sold to an unwitting individual who would compensate the criminal with clean funds not tied to a prior crime,” the study explained. Also, smart contracts designed to automatically send royalty payments to the content-maker every time the NFT is sold could encourage transactions that avoid regulations, while auction houses may not be able to keep up with all transactions or verify buyer identities, the analysts warned.
While the study did not outline specific regulatory recommendations, it did suggest that the Treasury Department should consider applying anti-money-laundering and counter-terrorist financing rules to the art market, including rules on customer identification and suspicious activity reports.
The NFT market saw $1.5 billion in trading in the first quarter of 2021, compared to some $20 billion in the physical US art market in 2020.
