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.
Bilateral commerce smashed a record high last year
China wants to boost bilateral trade to $250 billion a year. The goal was voiced by Chinese President Xi Jinping during a meeting with Russian President Vladimir Putin, according to Kremlin spokesman Dmitry Peskov.
“For China, this is not so much, but for [Russia] it is a very ambitious goal,” Peskov said, adding that the task is quite achievable. He pointed out that the trade turnover between the two countries hit a historic high of $140 billion in 2021.
Russian and Chinese leaders had previously set a target of doubling the volume of trade from $100 billion (reached in 2018) a year to $200 billion by 2024.
China has been the main importer from Russia of non-primary, non-energy goods since 2016. According to the Russian Export Center (REC), deliveries of those have been growing for seven consecutive years, and the trend has continued through 2021. Copper, aluminum, fertilizers, lumber, oilseeds, paper, and cardboard were among the products most purchased by China, the REC said.
Mercedes-Benz to pay millions and fix rigged pollution-mitigation devices to comply with law in South Korea
The Korea Fair Trade Commission (KFTC) on Sunday demanded that major luxury car maker Mercedes-Benz pay $16.87 million in fines for providing falsified information on gas emissions from its diesel cars, Yonhap news agency reported.
The South Korean antitrust regulator discovered that the vehicle producer had installed illegal software on pollution-mitigation devices in some of its cars. The software allowed the devices to perform at lower levels in driving conditions than during certification tests. The vehicles therefore failed to meet the legally allowed emission levels, but the automaker was found to have covered up related facts in signs attached to its cars between April 2012 and November 2018, according to the KFTC.
The automaker also advertised that the cars’ nitrogen oxide emissions were at a minimum level and they fully met the Euro 6 emission standards. The inadequate ads were on 15 Mercedes-Benz models.
“Though Mercedes-Benz claimed that it only used typical phrases about well-known performances of the emission mitigation devices, concealing the intentional implementation of illegal software and claiming its vehicles perform the best are beyond simple exaggeration and deception,” the regulator stated, adding that “such practices will or are feared to hurt fair market order by preventing consumers from making a reasonable decision” when purchasing a car.
Apart from the fine, the KFTC also ordered the carmaker to fix the devices and install qualified software.
In 2021, the South Korean regulator slapped a number of other carmakers with fines or correction orders, including Audi-Volkswagen Korea, Nissan Motor, Stellantis Korea, and Porsche AG for similar emissions-tampering practices.
Despite the official figure of $30 trillion, actual US debt may be multiple times larger
US national debt topped $30 trillion for the first time in history last month, spurred on by high borrowing during the Covid-19 pandemic, according to data from the Treasury Department. However, Jim Rogers, legendary investor and co-founder of the Quantum Fund alongside George Soros, says the actual debt amount is likely to be much higher than Washington admits.
“That is just what they admit. It is the on-balance sheet debt, but there’s dozens of trillions more debt off-balance sheet,” Rogers said, in a note to RT. The actual debt volume is difficult to calculate, especially since the start of the Covid-19 pandemic and all the pressures it brought about. Still, the investor “once figured it out as over $200 trillion,” nearly seven times more than the officially recognized sum.
According to Rogers, the US has no chance of climbing out of the current debt hole, and the strategy that’s being implemented is to sit and wait until the younger generation has to deal with the problem.
“The endgame is to keep hoping because they hope it will be someone else’s problem someday. It is not a good time to be a young American,” he stressed.
The US owes a wide variety of creditors, and the debt is roughly divided into public debt and intragovernmental debt. The latter is owed by US Treasury to other federal agencies. The public debt represents funds owed to foreign governments (Japan being the largest holder), US banks and investors, the Federal Reserve, state and local governments, pension funds, insurance companies, and savings bonds. Most economists agree that national debt at a certain level is necessary to push the country’s economic growth. However, if it becomes too large it can result in cuts to government programs, to tax and interest-rate hikes, which in turn would propel prices and trigger an economic crisis.
