Baltic Dry Index. 956 -01 Brent Crude 54.00
Change is the law of life. And
those who look only to the past or present are certain to miss the future.
John F. Kennedy
As President Trump makes his first overseas trip as
President, promoting his “America First” protectionist agenda, the rest of the
world is moving on, with China aiming to step into the leadership void vacated
by President Trump. While the cat’s away, the mice will play, and play is
exactly what the world’s mice are doing. Today we take a look at 2017 China.
While it’s too early to tell is China will succeed in its aim, Pax Americana
will never be the same as 1945-2010.
Below, a confusion of
trends.
China's favored trade deal in focus at Asian meeting
Asian trade ministers met on Monday to discuss a proposed free trade
deal that is backed by China and has been given new impetus by the U.S.
withdrawal from the Trans-Pacific Partnership Agreement.
The Regional Comprehensive Economic Partnership (RCEP) would create a
free trade area of more than 3.5 billion people, bringing together China,
India, Japan, South Korea, Australia and New Zealand as well as Southeast Asian
nations.
"RCEP is the biggest trade agreement being negotiated at the
moment," Vietnam's trade minister, Tran Tuan Anh, said at the opening.
"RCEP will provide a unified framework which further facilities and
promotes good services investment and trade vision."
Monday's meeting in Hanoi followed heated discussions there at the
weekend at the first gathering of trade ministers from Asia Pacific Economic
Cooperation (APEC) countries since U.S. President Donald Trump's switch to an
"America First" agenda.
APEC countries failed to come out with their usual joint statement after
the United States rejected language on fighting protectionism which Asian
countries wanted to include.
Members of the TPP trade deal, which does not include China, agreed on
the sidelines of the meeting to pursue it despite Trump's decision to abandon
the agreement in favor of bilateral arrangements with Asian countries.
The RCEP and TPP trade deals are not mutually exclusive and some
countries would be members of both.
More
Farming the World: China’s Epic Race to Avoid a Food Crisis
By Bloomberg News
China’s 1.4 billion people are building up an appetite that
is changing the way the world grows and sells food. The Chinese diet is
becoming more like that of the average American, forcing companies to scour the
planet for everything from bacon to bananas.
But China’s efforts to buy or lease agricultural land in
developing nations show that building farms and ranches abroad won’t be enough.
Ballooning populations in Asia, Africa and South America will add another 2
billion people within a generation and they too will need more food.
That leaves China with a stark ultimatum: If it is to have
enough affordable food for its population in the second half of this century,
it will need to make sure the world grows food for 9 billion people.
Its answer is technology.
China’s agriculture industry, from the tiny rice plots
tended by 70-year-old grandfathers to the giant companies that are beginning to
challenge global players like Nestle SA and Danone SA, is undergoing a
revolution that may be every bit as influential as the industrial
transformation that rewrote global trade.
The change started four decades ago when the country began
to recast its systems of production and private enterprise. Those reforms
precipitated an economic boom, driven by factories, investment and exports, but
the changes down on the farm were just as dramatic.
Land reforms lifted production of grains like rice and
wheat, and millions joined a newly wealthy middle class that ate more
vegetables and pork and wanted rare luxuries like beef and milk.
----So how can China produce enough safe food for its
growing population if they all start eating like Americans?
The simple answer is it can’t.
It takes about 1 acre (half a hectare) to feed the average
U.S. consumer. China only has about 0.2 acres of arable land per citizen,
including fields degraded by pollution.
So China’s Communist government has increasingly shifted
its focus to reforming agriculture, and its approach divides into four parts:
market controls; improving farm efficiency; curbing land loss; and imports.
In each case, technology is the key to balancing the food
equation. The nation is spending billions on water systems, seeds, robots and
data science to roll back some of the ravages of industry and develop
sustainable, high-yield farms.
It needs to succeed quickly, because China’s chief tool
during the past decade for boosting domestic production is backfiring.
China has a goal of being self-sufficient in staple foods
like rice, corn and wheat. To ensure farmers grew those crops, it paid a
minimum price for the grains and then stored the excess in government silos.
Farmers responded, saturating their small plots with
fertilizers and pesticides to reap bumper crops that filled government reserves
to bursting.
---Total state grain reserves were estimated to
be to be more than 600 million tons last year, enough for more than a year’s
supply. About half the stockpile is corn, which the government is trying to
sell before it rots, forcing provinces to turn the grain into motor fuel.
“We have exhausted our resources and environment and used
as much fertilizer and pesticide as possible to address supply shortages,” Han
Jun, deputy director of the Office of the Central Rural Work Leading Group,
wrote in the government-backed People’s Daily on Feb. 6. “We urgently need to
increase production of green and good-quality agriculture products.”
More
Chinese paper applauds anti-spy efforts after report CIA sources killed
An influential state-run newspaper applauded China's anti-espionage
efforts on Monday after the New York Times said China had killed or imprisoned
up to 20 CIA sources, hobbling U.S. spying operations in a massive intelligence
breach.
The Chinese killed at least a dozen people providing information to the
U.S. Central Intelligence Agency between 2010 and 2012, dismantling a network
that was years in the making, the New York Times reported on Saturday.
China's Global Times, published by the official People's Daily, said in
an editorial in its Chinese and English-language editions that, if true, it was
a victory for China.
"If this article is telling the truth, we would like to applaud
China's anti-espionage activities. Not only was the CIA's spy network
dismantled, but Washington had no idea what happened and which part of the spy
network had gone wrong," the paper said.
"It can be taken as a sweeping victory. Perhaps it means even if
the CIA makes efforts to rebuild its spy network in China, it could face the
same result," it said.
However the widely read paper, which is known for its strongly
nationalist stance, said one part of the report was false.
"As for one source being shot in a government courtyard, that is a
purely fabricated story, most likely a piece of American-style imagination
based on ideology," it said.
The Chinese government has yet to respond to the report.
More
We close for the day
with commodities. In the decades ahead,
a massive change is coming in the way commodities are traded, and that’s going
greatly going to impact the west.
Commodity Traders Are Stuck in a World Where Everybody Knows Everything
by Serene Cheong, Dan Murtaugh, and Sharon Cho
21 May 2017, 22:00 GMT+1
- More transparency seen eroding profits from arbitrage trades
- Traders need to get involved in supply chain to gain advantage
Unlike the stock market in which transactions are typically based on information that’s public, firms that buy and sell raw materials thrived for decades in an opaque world where their metier relied on knowledge privy only to a few. Now, technological development, expanding sources of data, more sophisticated producers and consumers as well as transparency surrounding deals are eroding their advantage.
“Everything is transparent, everybody knows everything and has access to information,” Daniel Jaeggi, the president of Mercuria Energy Group Ltd., said on Thursday at the Global Trader Summit organized by IE Singapore, a government agency that promotes international trade.
Sitting next to him at a panel discussing ‘What’s Next for Commodity Trading: Drivers, Disruptors and Opportunities’, Sunny Verghese, the chief executive officer of food trader Olam International Ltd., lamented declining margins. “The consumers and producers are trying to eat our lunch. So we got to be smart about differentiating ourselves,” he said.
As market participants’ access to information increases, the traders highlighted the need to more than simply buy and sell commodities as profits from arbitrage -- or gains made from a differential in prices -- shrinks. That means getting involved in the supply chain by potentially buying into infrastructure that’s key to the production and distribution of raw materials, and also providing financing for the development of such assets.
Mercuria, for instance, is pooling together resources from its corporate finance, venture capital, risk management and legal teams to execute “more complex, structure-type deals,” according to Jaeggi. When oil prices crashed in 2014-2015, the trader channeled funds to producers of U.S. shale for pipeline development in exchange for cargoes as access to capital and equity shrunk, he said.
Last year, the company engineered a logistically complex trade to export U.S. oil after a four-decade ban on exports was lifted. It combined railways, barges, pipelines, trucks and a ship-to-ship transfer in the Caribbean to transport American crude to Africa for storage, joining others such as Vitol Group, the world’s biggest independent oil trader, in finding increasingly innovative ways to ship supplies overseas.
More
Men make history and not the
other way around. In periods where there is no leadership, society stands
still. Progress occurs when courageous, skillful leaders seize the opportunity
to change things for the better.
Harry S Truman
Crooks and Scoundrels Corner
The bent, the seriously bent, and the totally
doubled over.
With the Atlantic Hurricane season start just about
one week away, what are the projections
for the coming season?
Florida's Bone Dry and Burning While Rest of U.S. Is Soaking Wet
by Brian K Sullivan
19 May 2017, 12:00 GMT+1
- Wildfires hit Georgia too as rain stays away from both states
- Drought now may mean more hurricanes and tropical storms later
There’s no relief in immediate sight. “We are buckled up for a very long and very hot wildfire season,” said Adam Putnam, the commissioner of agriculture in Florida, the largest producer of orange juice behind Brazil.
The culprit is a high-pressure ridge that has stubbornly hovered since late last year over the region, pushing storms away. Interestingly enough, it’s the same atmospheric system that can steer hurricanes into the southeastern U.S., and if it doesn’t spin far out over the Atlantic this summer, it’ll be in position to catch a tempest and fling it toward land.
But for now, all that’s certain is that the system has put much of Florida and Georgia in stark contrast to the rest of the continental U.S.: This April was the second wettest in the 123-year-old record, according to the National Centers for Environmental Information in Asheville, North Carolina.
Even California is for the most part out of a punishing years-long drought. By the measure of the Palmer Drought Severity Index, the U.S. probably hasn’t been this drought free since June 1993, said Brad Rippey, a meteorologist with the Department of Agriculture and a member of the U.S. Drought Monitor team in Lincoln, Nebraska.
Georgia, though, is 88 percent abnormally dry or in drought, just under double what it was a year ago, according to the monitor. In Florida it’s almost 82 percent, up from 6.47 percent last year.
The wildfires, the most intense in Florida since 2011, have burned at least 30 homes and at one point closed down parts of Interstate 75. The West Mims fire in southeast Georgia that started in April is raging over 150,000 acres of the Okefenokee National Wildlife Refuge.
While flames haven’t reached citrus groves, “certainly the trees are stressed by the drought,” Putnam said. Most Florida groves are irrigated, protecting them from drought. The commissioner said it’s too early to put a price on the damage to livestock and crops.
Last winter’s weak La Nina could have contributed to the region’s woes because the south often gets dryer when the equatorial Pacific cools, said Stephen Baxter, a seasonal forecaster at the U.S. Climate Prediction Center in College Park, Maryland. But summer usually delivers rainfall. “We are waiting for that seasonal shift,” Rippey said.
More
Atlantic hurricane season forecast: El Niño expected to deliver calmer year
A developing El Niño is likely to bring a quieter-than-average
Atlantic hurricane season, top forecasters announced Thursday.
Meteorologists from Colorado State University predict 11 tropical
storms will form, with four becoming hurricanes.
A typical year averages about 12 tropical storms, with seven spinning
into hurricanes, based on weather records that date back to 1950.
More
The entrepreneur always
searches for change, responds to it, and exploits it as an opportunity.
Peter Drucker
Technology Update.
With events happening
fast in the development of solar power and graphene, I’ve added this section.
Updates as they get reported. Is converting sunlight to usable cheap AC or DC
energy mankind’s future from the 21st century onwards? DC? A quantum
computer next?
Graphene-nanotube hybrid boosts lithium metal batteries
Prototypes store 3 times the energy of lithium-ion batteries
Date:
May 18, 2017
Source:
Rice University
Summary:
Scientists have built high-capacity lithium metal batteries with anodes made of
a graphene-carbon nanotube hybrid. The anodes quench the formation of damaging
dendrites.
Rice University scientists have created a rechargeable lithium metal
battery with three times the capacity of commercial lithium-ion batteries by
resolving something that has long stumped researchers: the dendrite problem.
The Rice battery stores lithium in a unique anode, a seamless hybrid of
graphene and carbon nanotubes. The material first created at Rice in 2012 is
essentially a three-dimensional carbon surface that provides abundant area for
lithium to inhabit.
The anode itself approaches the theoretical maximum for storage of
lithium metal while resisting the formation of damaging dendrites or
"mossy" deposits.
Dendrites have bedeviled attempts to replace lithium-ion with advanced
lithium metal batteries that last longer and charge faster. Dendrites are
lithium deposits that grow into the battery's electrolyte. If they bridge the
anode and cathode and create a short circuit, the battery may fail, catch fire
or even explode.
Rice researchers led by chemist James Tour found that when the new
batteries are charged, lithium metal evenly coats the highly conductive carbon
hybrid in which nanotubes are covalently bonded to the graphene surface.
As reported in the American Chemical Society journal ACS Nano,
the hybrid replaces graphite anodes in common lithium-ion batteries that trade
capacity for safety.
"Lithium-ion batteries have changed the world, no doubt," Tour
said, "but they're about as good as they're going to get. Your cellphone's
battery won't last any longer until new technology comes along."
He said the new anode's nanotube forest, with its low density and high
surface area, has plenty of space for lithium particles to slip in and out as
the battery charges and discharges. The lithium is evenly distributed,
spreading out the current carried by ions in the electrolyte and suppressing
the growth of dendrites.
Though the prototype battery's capacity is limited by the cathode, the
anode material achieves a lithium storage capacity of 3,351 milliamp hours per
gram, close to the theoretical maximum and 10 times that of lithium-ion
batteries, Tour said.
More
The monthly Coppock Indicators finished April
DJIA: 20,941 +149 Up. NASDAQ: 6,048 +190 Up. SP500: 2,384 +152 Up.
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