2025-04-22 23:25

Farmer setting up high-tech cocoa farm larger than Manhattan Production to be nearly 100% mechanized, using high-yield trees Cargill is a partner in the initial phase Chocolate maker Barry Callebaut a partner in another large project RIACHAO DAS NEVES, Brazil, April 22 (Reuters) - In the Brazilian state of Bahia, farmer Moises Schmidt is developing the world's largest cocoa farm. His plan is to revolutionize the way the main ingredient in chocolate is produced, growing high-yield cocoa trees, fully irrigated and fertilized, in an area bigger than the island of Manhattan that is not currently known for producing the beans. Sign up here. Schmidt's $300 million plan is the largest and the most innovative in that region, but not the only one. There are similar super-sized projects under development, some of them nearly as big, as well-capitalized farming groups look to apply industrial-scale agriculture expertise to cocoa production to profit from sky-high prices for the beans. If those plans work, the industry's center of gravity could shift back to Brazil, where the cocoa tree is native, from West Africa. "I believe Brazil will become the world's cocoa breadbasket," Schmidt told Reuters while walking amid row after row of young cocoa trees stretching to the distance in this flat savanna land in the country's Centre-North region. He estimates that as much as 500,000 hectares (1.236 million acres) of high yield cocoa farms could be in place in Brazil in 10 years, which would produce as much as 1.6 million tons of cocoa. By comparison, Brazil currently produces only around 200,000 tons, while the world's top grower Ivory Coast harvests 10 times more than that. Ghana, the second largest global grower, produces around 700,000 tons of the beans. Currently, the global cocoa industry is in crisis. Production is failing in Ivory Coast and neighboring Ghana, which between them grow more than 60% of the world's cocoa. A potent mix of plant disease, climate change and aging plantations has led to three consecutive years of falling output. That's been bad news for chocolate lovers. Cocoa prices nearly tripled in 2024, hitting a record high of $12,931 a metric ton in December. The price has since come off to around $8,200, but remains well above the historical averages. OPPORTUNITY IN CRISIS? For Schmidt and other farmers in Brazil, the crisis is viewed as an opportunity. The Schmidt Agricola family business started preparing to cultivate cocoa in 2019 after concluding with the help of an in-house assessment of the cocoa market that there would be a future supply shortfall. "We just didn't think it would happen so soon," he said, as he walked through the greenhouses on his farm that nurse seedlings. His planned 10,000-hectare (24,105 acres) farm would dwarf the size of the small farms in West Africa that typically span a few dozen hectares. There are large farms in other producing countries such as Ecuador and Indonesia, some of them going over 1,000 hectares (2,471 acres) in size, but still much smaller than Schmidt's planned giant. The plan is to apply large-scale agriculture techniques to the fully irrigated cocoa farm as if it were a soybean or corn field. The trees in the farm in the municipality of Riachao das Neves , opens new tab in the west of Bahia state will be packed together, leaving only enough room between them for mechanized watering and application of fertilizer and pesticides. Schmidt is planting 1,600 trees per hectare in the new areas, compared to only 300 trees in conventional farms. The concentration should mean a much higher yield per hectare. "The only thing that is not mechanized yet is the fruit picking from the trees," the farmer said. Some see this method of farming as a game changer. "Five years from now everything we used to know about cocoa production would have changed," said Tales Rocha, a cocoa agronomist for TRF Consultoria Agricola, a company that advises farmers in Brazil. Rocha said the savanna region in Western Bahia has the ideal topography for large scale agriculture, with its extended flat expanses. Farming groups such as Schmidt Agricola already produce soybeans, corn, cotton and fruits in thousands of hectares in Western Bahia, a region with ample water supplies. MILLIONS OF SEEDLINGS At the new farms, the cocoa trees are grown in the open, with plenty of sunlight. This contrasts with traditional cocoa plantations elsewhere in Brazil and worldwide, where cocoa trees share space with other types of trees and get some shade. Schmidt is developing high-yield trees through a seedling operation he has been running since 2019. His team has produced new cocoa varieties through so-called positive selection, a years-long project where seedlings are multiplied from material taken from the plants that produced the highest fruit load in test fields. The high-yielding trees planted on some 400 hectares (988 acres) in the first phase of the project are producing around 3,000 kilos per hectare (kg/h) (6,613 pounds), or 10 times the average yield of traditional cocoa areas in Brazil. Schmidt said his target is to get past 4,000 kg/h (8,818 pounds). That would be eight times the 500 kg/h (1,102 pounds) average yield in top producer the Ivory Coast. Very high yields above 2,000 kg/ha have been reached in small test fields run by the Executive Commission for Cocoa Cultivation Planning, Brazil's cocoa research agency, using high density of plants , opens new tab. The researchers, however, said the results would need to be confirmed with larger scale planting and added there were questions about the economic feasibility of such practice, that would require extensive crop care and workforce. Schmidt's nursery installation, which operates as a separate company called BioBrasil, uses propagation machinery from Denmark's forestry equipment maker Ellepot with capacity to produce 10 million seedlings per year. It produces the trees for the planned giant farm and also sells seedlings to other cocoa projects in Brazil. Some people in the market, however, are not so certain this kind of expansion will indeed happen in Brazil. "As always, price is the key determinant. At around $4,000 per ton Brazil was barely interested," said Pam Thornton, a veteran cocoa consultant and beans trader. "After talking to many Brazilian farmers and visiting a bunch of large commercial farms, I believe world prices have to demonstrate that they will remain near current price levels for another year or so for them to expand acreage, and probably several thousand dollars higher for it to be in a meaningful way," she said. Schmidt says that cocoa from his operation would be profitable even at around $4,000 per ton. "Above $6,000 it is super profitable, much better than soy or corn," he said. Long-term supply and demand projections seem positive for prices, considering that production in West Africa is stable or "locked into a long cycle of diminishing outcomes," said U.S.-based veteran cocoa broker and analyst Marcelo Dorea, Chief Executive of M3I Capital Management. "The market must, heretofore, seek alternative sources of meaningful production," he said, adding that Brazil looks like a natural option considering cocoa know-how and land availability. BIG COCOA IS WATCHING Schmidt Agricola cultivates more than 35,000 hectares with soybeans, corn and cotton in Bahia. It has preliminary agreements through memorandum of understandings with chocolate producers and cocoa traders, Schmidt said. Cargill, one of the world's largest commodities traders and food processors, is already a partner in the initial phase encompassing the 400 hectares, and is in talks to expand the partnership. Schmidt said that nearly all of the big cocoa traders or chocolate companies are talking to him and other farmers in Brazil regarding expansion and supply deals. The partnerships would include investment to develop the projects, and in return the investing companies would guarantee cocoa supplies, he said. "We are working on the contracts now," he said, declining to name the firms, citing non-disclosure clauses. Barry Callebaut (BARN.S) , opens new tab, the world's largest supplier of cocoa products and chocolate, is in talks to partner with farming group Fazenda Santa Colomba in an investment to form a cocoa farm of 5,000 (12,355 acres) to 7,000 hectares (17,300 acres) in the municipality of Cocos in Western Bahia, two sources familiar with the negotiation told Reuters. Santa Colomba declined to comment. Barry Callebaut confirmed it has signed a partnership with one farming group in Brazil for a 5,000 hectare cocoa farm in Bahia, but declined to name the group. The deal is part of the Future Farming Initiative launched by the company to boost high-tech cocoa farming and to diversify its geographical presence. "We are making good progress with FFI and continue to see interest from partners, clients, and investors globally," it said. Mars, the U.S. producer of Snickers bars and M&Ms, has set up a cocoa test field not far from Schmidt's farm in Riachao das Neves, Bahia. The company said its test field in the area is part of its efforts to deal with climate change and falling cocoa productivity around the world. "Bahia is attractive due to flat topography, fertile soils, reliable water availability and established agronomical infrastructure," said Luciel Fernandes, a manager at Mars Center for Cocoa Science in Brazil. POTENTIAL RISKS A leading cocoa researcher in Brazil, however, is worried. Plant pathologist Karina Peres Gramacho, who works for CEPLAC, believes there are risks to the plans for extensive cocoa fields in Western Bahia. The fact that each of those mega projects are based on thousands of clones of the same type of tree could leave the future fields vulnerable to diseases, which are very common in cocoa cultivation. Brazil was once second only to Ivory Coast in cocoa production, but a devastating fungus in the 1980's known as Witches' Broom decimated thousands of hectares of cocoa crops. Gramacho supports the idea of using more developed and regionally adequate varieties, usually hybrids that combine qualities from more than one genotype. Some industry analysts also have questions about the quality of the cocoa that would be grown in direct sunlight, because fruit that is produced in shade is typically considered to have superior taste. Cristiano Villela Dias, scientific director at Brazil's Cocoa Innovation Center (CIC), says that some initial tests with the fruits produced in Western Bahia indicated no discernible difference in taste. "The quality of the beans is very similar to the best cocoa produced in Brazil or other countries," Villela said, adding that optimal after harvest treatment, particularly with fermentation and drying, would make a bigger difference for beans' quality. Mars said it had tested the cocoa produced in the area and had not identified "a fundamental difference in taste or quality that is directly and exclusively associated with full-sun cultivation." https://www.reuters.com/markets/commodities/brazils-would-be-cocoa-king-aims-revolutionize-industry-with-giant-farm-2025-04-22/

2025-04-22 22:49

SAO PAULO, April 22 (Reuters) - Brazilian planemaker Embraer (EMBR3.SA) , opens new tab said on Tuesday its order backlog ended the quarter through March at $26.4 billion, up 25% from a year earlier, according to a securities filing. Sign up here. https://www.reuters.com/business/aerospace-defense/brazils-embraer-ends-q1-with-backlog-264-billion-2025-04-22/

2025-04-22 21:40

April 22 (Reuters) - U.S. oilfield technology firm Baker Hughes (BKR.O) , opens new tab on Tuesday flagged a potential impact on its annual core profit of between $100 million and $200 million due to tariffs. U.S. President Donald Trump's trade policy has heightened uncertainty in the energy industry, as the ensuing trade war is expected to curb global economic growth and, subsequently, demand for energy. Sign up here. Shares of the company were down 2.1% in after-market trade. The company said the estimated impact is based on tariff rates applied during the 90-day pause and does not account for the potential hit of retaliatory tariffs or other levies that are not currently in place. However, Baker Hughes beat Wall Street estimates for first-quarter profit helped by robust demand for natural gas technology. With Big Tech pouring billions of dollars into artificial intelligence, the demand for electricity to feed power-hungry data centers has been increasing and, therefore, the demand for liquefied natural gas. Baker Hughes has been trying to leverage its Industrial and Energy Technology (IET) portfolio to drive growth and expand its presence in the natural gas and LNG sectors. Orders in Baker Hughes' gas technology jumped 17%, lifting revenue in its IET segment to $2.93 billion. The Houston-based company provides compressors, turbines, valves and other modular systems to customers for gas processing. Baker Hughes is the least likely of the Big 3 oilfield services firms to be impacted by tariff-related uncertainties and commodity prices due to the "heavy backlog" in its IET segment, analysts had told Reuters in the run-up to the earnings season. The company reported an adjusted profit of 51 cents per share for the three months ended March 31, compared with the analysts' average expectation of 48 cents per share, according to data compiled by LSEG. https://www.reuters.com/business/energy/baker-hughes-reports-first-quarter-profit-beat-2025-04-22/

2025-04-22 21:38

April 22 (Reuters) - Solar inverter maker Enphase Energy (ENPH.O) , opens new tab on Tuesday missed analysts' estimates for first-quarter profit, hit by softening U.S. demand, and forecast second-quarter revenue below market estimates. Shares dropped 12.5% in after market trading. Sign up here. The company's battery shipments rose in the reported quarter from a year earlier, but fell short of analysts' expectations as softening demand and a metering reform introduced in 2023 in top U.S. market California dented demand for Enphase's inverters used in residential solar units. Fremont, California-based Enphase's quarterly revenue rose 35% to $356.1 million in the quarter ended March 31 from a year earlier, but fell short of estimates of $360.9 million. The company expects second-quarter revenue to be between $340 million and $380 million, the midpoint of which is below analysts' expectations of $376 million. Earlier on Tuesday, U.S. trade officials finalized steep tariff levels on most solar cells from Southeast Asia, a key step toward wrapping up a year-old trade case in which American manufacturers accused Chinese companies of flooding the market with unfairly cheap goods. Enphase reported an adjusted profit of 68 cents per share for the January to March quarter, compared with analysts' estimate of 70 cents per share, according to data compiled by LSEG. https://www.reuters.com/sustainability/climate-energy/enphase-energy-misses-quarterly-profit-estimates-forecasts-weak-q2-revenue-2025-04-22/

2025-04-22 21:10

NEW YORK, April 22 (Reuters) - Making sense of the forces driving global markets By Alden Bentley, Americas Finance and Markets Breaking News Editor. Sign up here. Jamie is away today so I'll provide a round-up of today's main market moves below. I'd love to hear from you, so please reach out to me with comments at [email protected] , opens new tab. If you have more time to read today, here are a few articles I recommend to help you make sense of what happened in markets. Today's Key Market Moves Stocks rebound with no new Powell-bashing or trade tirades from Trump Wall Street flipped to buy mode on Tuesday, without any fresh criticism of U.S. Federal Reserve Chairman Jerome Powell or flip-flops on tariffs from President Donald Trump to disquiet markets again. Indexes reversed Monday's tumble, hitting session highs following a report that U.S. Treasury Secretary Scott Bessent had said a tariff standoff with China was unsustainable and he expected the situation to de-escalate, raising hopes a bit on U.S. trade negotiations. With little other news on those fronts, investors were more focused on earnings. They were a mixed bag, with better-than-expected results from 3M Co sending its shares sharply higher as the biggest gainer on the Dow, while Northrop Grumman tanked. The most anticipated report of the day, arguably of the week, comes after the market close from Tesla. The electric car and battery maker run by Trump's billionaire DOGE chieftain Elon Musk kicks off earnings for the "Magnificent Seven" megacaps and was up 4.6% late afternoon. Magnificent Seven leaders Nvidia and Apple posted solid gains. The move back into stocks took a bit of the safety bid off the benchmark 10-year Treasury note. Gold continued to gleam as a default safe-haven, but likewise backed off after pricing at $3,500 per ounce for the first time ever. The dollar did not set a new low, even against the safe-haven Swiss franc, which is about the best you can say about it given global investors have turned up their noses at America and its assets, for now. The mood across markets remained fragile as investors awaited Trump's next utterance in his one-sided tussle with Powell over lowering interest rates, which has fueled concerns about the central bank's autonomy. That said, while the president appears to be preemptively scapegoating the central bank chief for any economic fallout, Trump must know that even if he strong-armed Powell out of the way before his term is up a year from now, Powell is not the sole vote on Federal Open Market Committee. Five rotating regional Fed presidents, seven Fed governors and the president of the New York Fed hash out policy decisions with him. The odd dissents aside, they have sung from the same tune sheet for months, and tariffs have only made their job harder. What could move markets tomorrow? Opinions expressed are those of the author. They do not reflect the views of Reuters News, which, under the Trust Principles , opens new tab, is committed to integrity, independence, and freedom from bias. Trading Day is also sent by email every weekday morning. Think your friend or colleague should know about us? Forward this newsletter to them. They can also sign up here. https://www.reuters.com/markets/global-markets-trading-day-graphics-2025-04-22/

2025-04-22 21:03

TSX ends up 1.2% at 24,305.98 Posts highest closing level since April 3 Technology and energy both add 2.1% NovaGold Resources shares jump 39.2% April 22 (Reuters) - Canada's main stock index rose to a near three-week high on Tuesday, helped by gains for the technology and energy sectors, as some optimism took hold of a letup in the global trade war. The Toronto Stock Exchange's S&P/TSX Composite Index (.GSPTSE) , opens new tab ended up 297.12 points, or 1.2%, at 24,305.98, its highest closing level since April 3. Sign up here. Wall Street also rallied, helped by a report that U.S. Treasury Secretary Scott Bessent had said a tariff standoff with China was unsustainable, and that he expects the situation to de-escalate. "The market is going to sniff out eventually that there’s only one way this (trade war) ends - with deals," said Barry Schwartz, chief investment officer at Baskin Wealth Management. "No one wants to miss the headline when tariffs go back to 20% with China." On Monday, worries about the independence of the U.S. Federal Reserve had spooked investors. On Tuesday, the Toronto market's technology sector rose 2.1%, with shares of e-commerce company Shopify Inc (SHOP.TO) , opens new tab adding 4.9%. Heavily weighted financials were up 2% and energy added 2.1%. The price of oil settled nearly 2% higher at $64.31 a barrel. Billionaire Carl Icahn has built an economic interest covering about 34% of Bausch Health's (BHC.TO) , opens new tab shares, according to a filing, days after the pharmaceutical firm adopted a "poison pill" to ward off hostile takeovers. Shares of Bausch Health gained 10.3%. Barrick Gold (ABX.TO) , opens new tab said it will exit the Donlin gold Project in Alaska by selling its 50% stake to billionaire John Paulson and NovaGold Resources (NG.TO) , opens new tab for up to $1.1 billion. Shares of NovaGold Resources jumped 39.2%, while Barrick's shares ended 2.5% lower. The materials group, which includes metal miners, was the only one of 10 major sectors to lose ground, falling 1%, as the price of gold pulled back from a record high. https://www.reuters.com/world/americas/tsx-futures-rise-higher-oil-gold-prices-2025-04-22/