2025-01-29 20:50

SAO PAULO, Jan 29 (Reuters) - A cargo of Louis Dreyfus Company soymeal destined for export from the southern Brazilian port of Paranagua was returned for reprocessing at one of the company's local plants, the grain processor told Reuters on Wednesday. LDC declined to provide details such as the timeline of the refusal, the size of the cargo and destination, or the nature of the issue with the cargo. However, a person with knowledge of the matter said LDC's soymeal was sent by trucks to the port but subsequently rejected last week for containing impurities. Brazil's ability to track agricultural commodities cargoes has come under heightened scrutiny after China suspended five local soybean exporters, citing product non-conformities earlier this month. "The Louis Dreyfus Company clarifies that, with regard to the aforementioned cargo, given the absence of any type of adulteration or harmful agents, it carried out the procedure established in current legislation, returning the cargo for reprocessing," the company said in a statement. The port authority said since January, 44 trucks loaded with soymeal have been turned down due to the presence of extraneous materials such as sticks and pieces of unprocessed soybeans. The port declined to name the companies responsible for the cargoes. In this case, there was no need to dispose of the loads, which may be returned to the origin for removal of the impurities. Confirmation that LDC's soymeal has been refused came after authorities at the port of Paranagua disclosed that 51 separate truck-loads carrying 2,200 tons of soymeal were rejected for "product adulteration", without naming the companies involved. LDC said none of its soy processing plants in the states of Parana, Mato Grosso and Goias had sent allegedly contaminated soymeal products to Paranagua. The source said the soymeal cargo's origin was LDC's factory in Ponta Grossa in the state of Parana. Sign up here. https://www.reuters.com/markets/commodities/ldc-says-brazil-soymeal-cargo-returned-port-reprocessing-2025-01-29/

2025-01-29 20:44

Lutnick: Saturday tariff deadline aims to curb fentanyl flows Commerce nominee says China, DeepSeek leveraged US technology Lutnick says he advised Trump to pursue across-the-board tariffs Nominee won't commit to honoring prior chips grant approvals WASHINGTON, Jan 29 (Reuters) - President Donald Trump's nominee to run the Commerce Department, Howard Lutnick, said on Wednesday that Canada and Mexico can avoid looming U.S. tariffs if they act swiftly to close their borders to fentanyl, while vowing to slow China's advancement in artificial intelligence. Lutnick, a billionaire Wall Street CEO, said at his U.S. Senate confirmation hearing that he has advised Trump to pursue across-the-board tariffs country-by-country to restore "reciprocity" to America's trading relationships. He also said he would erect stronger curbs on China's access to U.S. technology, including advanced AI semiconductors. Lutnick said Trump's Saturday deadline for imposing 25% tariffs on goods from Canada and Mexico was meant to pressure the two countries to stop the flow of fentanyl into the U.S. The threatened duties are separate from the broad review of U.S. tariffs, trade deals and other trade policy ordered by Trump when he took office last week. "So this is a separate tariff to create action from Mexico and action from Canada," Lutnick said of the 25% duty threat. "And as far as I know, they are acting swiftly, and if they execute it, there will be no tariff." Canada's Foreign Minister Melanie Joly, who is visiting Washington to help ease tensions, said Lutnick's "comments regarding the fact that we were addressing the border issue and fentanyl were positive." She said the ultimate decision on tariffs rests with Trump, but Canada is prepared to retaliate with its own trade penalties if the president makes good on his threats. In a hearing heavy with technical questions, Lutnick repeatedly called for a restoration of "reciprocity" on trade with other countries, which is in line with Trump's vow to erect a universal tariff of 10% on all U.S. imports. "My way of thinking, and I discussed this with the president, is country by country, macro," Lutnick said when asked his preference for how Trump should impose tariffs. "We are treated horribly by the global trading environment. They all have higher tariffs, non-tariff trade barriers and subsidies," Lutnick said. "They treat us poorly. We need to be treated better. We need to be treated with respect, and we can use tariffs to create reciprocity, fairness and respect." VAST AGENCY As Commerce secretary, Lutnick, who is worth $1.5 billion according to Forbes, would run a vast government agency with 47,000 employees responsible for U.S. export controls, anti-dumping and anti-subsidy duties, weather forecasting, fisheries, economic data and promotion of investment in the U.S. Trump also has designated Lutnick as the leader of his trade policy, with oversight of the U.S. Trade Representative's office, but he did not provide details of how Commerce and USTR would coordinate their work. He reiterated his plans to resign from his positions as the head of BGC Group (BGC.O) , opens new tab, its affiliate Cantor Fitzgerald and other companies, and sell all of his holdings to avoid any conflicts of interest. Lutnick's trade comments echoed those made by Trump, who last week said the European Union is "very, very bad to us" and called tariffs "the only way ... you're going to get fairness." He criticized Europe's higher auto tariffs and said that a $7,500 U.S. tax subsidy for leased foreign-made electric vehicles needs to be ended "as fast as we possibly can." Lutnick also said he wanted to improve U.S. access to Canada's largely closed dairy market and would work to protect the U.S. market from fisheries imports from Russia and China. "We gotta get rid of those communist fish," he joked. CHINA AI RACE Following the U.S. financial market reaction to the emergence of Chinese AI startup DeepSeek's powerful, low-cost generative AI model, members of the Senate Commerce, Science and Transportation Committee repeatedly asked Lutnick how he would maintain U.S. AI leadership. Lutnick said DeepSeek had misappropriated U.S. technology to create a "dirt cheap" AI model and vowed to impose new restrictions on Beijing's technology access. "They stole things. They broke in. They've taken our IP," Lutnick said of China. "It's got to end, and I'm going to be rigorous in our pursuit of restrictions and enforcing those restrictions to keep us in the lead, because we must stay in the lead." Lutnick said that former president Joe Biden's legislation to provide $52.7 billion in subsidies for American semiconductor production, research and workforce development is "an excellent downpayment" to rebuild the sector in the U.S., but needs to be reviewed. CHIPS GRANTS But he declined to commit to honoring CHIPS and Science Act grants that have already been approved by the Commerce Department, saying he wanted to "read them and analyze them and understand them." His comment follows Trump's order on Tuesday to freeze hundreds of billions of dollars in federal grants, loans and other aid, a move that was temporarily blocked by a federal judge. The Biden administration raised Trump's prior 25% duty on Chinese computer chips to 50% this year. But Trump said on Monday he would impose tariffs on all imported semiconductors and pharmaceuticals and add to steel tariffs to push companies to manufacture more of these products in the U.S. Lutnick said there were too many exclusions from steel tariffs, and these need to be simplified. He added: "I'm a more simple view of tariffs sort of guy, and the president is of like mind." Sign up here. https://www.reuters.com/world/us/trump-commerce-chief-pick-lutnick-says-he-prefers-across-the-board-tariffs-by-2025-01-29/

2025-01-29 20:24

Distillation violates terms of service of U.S. tech companies like OpenAI Stopping distillation is challenging due to open-source models and detection difficulties Commerce nominee Lutnick criticizes DeepSeek in congressional hearing Jan 29 (Reuters) - Top White House advisers this week expressed alarm that China's DeepSeek may have benefited from a method that allegedly piggybacks off the advances of U.S. rivals called "distillation." The technique, which involves one AI system learning from another AI system, may be difficult to stop, according to executive and investor sources in Silicon Valley. DeepSeek this month rocked the technology sector with a new AI model that appeared to rival the capabilities of U.S. giants like OpenAI, but at much lower cost. And the China-based company gave away the code for free. Some technologists believe that DeepSeek's model may have learned from U.S. models to make some of its gains. The distillation technique involves having an older, more established and powerful AI model evaluate the quality of the answers coming out of a newer model, effectively transferring the older model's learnings. That means the newer model can reap the benefits of the massive investments of time and computing power that went into building the initial model without the associated costs. This form of distillation, which is different from how most academic researchers previously used the word, is a common technique used in the AI field. However, it is a violation of the terms of service of some prominent models put out by U.S. tech companies in recent years, including OpenAI. The ChatGPT maker said that it knows of groups in China actively working to replicate U.S. AI models via distillation and is reviewing whether or not DeepSeek may have distilled its models inappropriately, a spokesperson told Reuters. Naveen Rao, vice president of AI at San Francisco-based Databricks, which does not use the technique when terms of service prohibit it, said that learning from rivals is "par for the course" in the AI industry. Rao likened this to how automakers will buy and then examine one another's engines. "To be completely fair, this happens in every scenario. Competition is a real thing, and when it's extractable information, you're going to extract it and try to get a win," Rao said. "We all try to be good citizens, but we're all competing at the same time." Howard Lutnick, President Donald Trump's nominee for Secretary of Commerce who would oversee future export controls on AI technology, told the U.S. Senate during a confirmation hearing on Wednesday that it appeared DeepSeek had misappropriated U.S. AI technology and vowed to impose restrictions. "I do not believe that DeepSeek was done all above board. That's nonsense," Lutnick said. "I'm going to be rigorous in our pursuit of restrictions and enforcing those restrictions to keep us in the lead." David Sacks, the White House's AI and crypto czar, also raised concerns about DeepSeek distillation in a Fox News interview on Tuesday. DeepSeek did not immediately answer a request for comment on the allegations. OpenAI added it will work with the U.S. government to protect U.S. technology, though it did not detail how. "As the leading builder of AI, we engage in countermeasures to protect our IP, including a careful process for which frontier capabilities to include in released models," the company said in a statement. The most recent round of concern in Washington about China's use of U.S. products to advance its tech sector is similar to previous concerns about the semiconductor industry, where the U.S. has imposed restrictions on what chips and manufacturing tools can be shipped to China and is examining restricting work on certain open technologies. NEEDLE IN A HAYSTACK Technologists said blocking distillation may be harder than it looks. One of DeepSeek's innovations was showing that a relatively small number of data samples - fewer than one million - from a larger, more capable model could drastically improve the capabilities of a smaller model. When popular products like ChatGPT have hundreds of millions of users, such small amounts of traffic could be hard to detect - and some models, such as Meta Platforms' (META.O) , opens new tab Llama and French startup Mistral's offerings, can be downloaded freely and used in private data centers, meaning violations of their terms of service may be hard to spot. "It's impossible to stop model distillation when you have open-source models like Mistral and Llama. They are available to everybody. They can also find OpenAI's model somewhere through customers," said Umesh Padval, managing director at Thomvest Ventures. The license for Meta's Llama model requires those using it for distillation to disclose that practice, a Meta spokesperson told Reuters. DeepSeek in a paper did disclose using Llama for some distilled versions of the models it released this month, but did not address whether it had ever used Meta's model earlier in the process. The Meta spokesperson declined to say whether the company believed DeepSeek had violated its terms of service. One source familiar with the thinking at a major AI lab said the only way to stop firms like DeepSeek from distilling U.S. models would be stringent know-your-customer requirements similar to how financial companies identify with whom they do business. But nothing like that is set in stone, the source said. The administration of former President Joe Biden had put forth such requirements, which President Donald Trump may not embrace. The White House did not immediately respond to a request for comment. Jonathan Ross, chief executive of Groq, an AI computing company that hosts AI models in its cloud, has taken the step of blocking all Chinese IP addresses from accessing its cloud to block Chinese firms from allegedly piggybacking off the AI models it hosts. "That's not sufficient, because people can find ways to get around it," Ross said. "We have ideas that would allow us to prevent that, and it's going to be a cat and mouse game ... I don't know what the solution is. If anyone comes up with it, let us know, and we'll implement it." Sign up here. https://www.reuters.com/technology/artificial-intelligence/why-blocking-chinas-deepseek-using-us-ai-may-be-difficult-2025-01-29/

2025-01-29 20:15

CAIRO, Jan 29 (Reuters) - A fire aboard the Hong Kong-flagged ASL Bauhinia on Tuesday was not linked to Houthi attacks, the Red Sea and Gulf of Aden Joint Maritime Information Center said on Wednesday. The cause of the fire remains under investigation, JMIC said. A maritime security source told Reuters that the fire resulted from hazardous cargo on board. There has been a spate of fires on board container ships in recent years due to flammable cargoes. The crew of the container ship abandoned it in the Red Sea on Tuesday, according to two maritime sources. Houthis have launched attacks on international shipping near Yemen since November 2023 in solidarity with Palestinians in the war between Israel and Hamas in the Gaza Strip. Earlier this month, the Houthis said the group would limit its attacks on commercial vessels sailing through the Red Sea to Israel-linked ships, provided the Gaza ceasefire is fully implemented. Since the Houthi attacks began, most vessels have diverted to the longer east-west route via the southern tip of Africa. Sign up here. https://www.reuters.com/world/middle-east/ship-fire-red-sea-not-linked-houthi-attacks-maritime-center-says-2025-01-29/

2025-01-29 20:09

WASHINGTON, Jan 29 (Reuters) - China's DeepSeek was able to create a powerful artificial intelligence model "dirt cheap" by leveraging stolen U.S. technology and advanced U.S. semiconductors, President Donald Trump's U.S. commerce secretary nominee Howard Lutnick told senators on Wednesday, vowing to address that. Lutnick also said the U.S. needs to set a "light touch" model to create global standards in AI, similar to the U.S. standard for cybersecurity, to maintain its leadership in the sector. We need to make sure we set standards that the world meets," Lutnick told the U.S. Senate Commerce, Science and Transportation Committee. "And I think that's the way we'll keep our lead. Do it the American way, which we know is the winning way." Sign up here. https://www.reuters.com/world/us/trumps-commerce-secretary-pick-says-biden-era-chips-investments-need-review-2025-01-29/

2025-01-29 19:59

NEW YORK, Jan 29 (Reuters) - Global arabica coffee prices hit record highs above $3.60 per lb on Wednesday as Brazil, by far the world's largest producer, has few beans left to sell and as worries over its upcoming harvest persist. Dealers said 70%-80% of Brazil's current arabica harvest has been sold and new trades are slow. Brazil produces nearly half the world's arabica beans, a high-end variety typically used in roast and ground blends. The country's recent weather has been more favorable after a severe drought last year. Still, the upcoming crop will be 4.4% smaller than the previous, according to Brazilian food supply agency Conab. "Global coffee supplies remain limited. Vietnam is progressing slowly with sales of its robusta crop. The arabica harvested in Central America and Colombia is taking longer to get to the market, and Brazilian farmers don't show much interest in selling more," said broker HedgePoint Global Markets on Wednesday. Arabica coffee futures on the ICE exchange , a contract used globally to price physical coffee trades, hit a record high of $3.6945 per lb earlier, bringing gains for the year up nearly 15%. The contract later closed up 2.5% at $3.6655 per lb. Robusta coffee , a generally cheaper variety used mostly to make instant coffee, rose 0.9% at $5,609 a metric ton. Coffee exports from India, the world's fifth largest robusta producer, are expected to decline more than 10% in 2025 due to lower production and reduced carry-forward stocks from last season's crop. Dealers said farmers in both India and Vietnam, the world's top robusta producer, are holding back sales in anticipation of further price gains and that in Brazil, some 80-90% of the current harvest has been sold. Broker Sucden said in a report that Brazilian farmers are also prioritizing local sales over dollar-priced exports even though the latter fetch more money as their financial position has improved significantly over the past two years. It added the country's current buffer stocks have eroded to an estimated 500,000 bags versus some 8 million bags traditionally, meaning any additional weather disruptions could have an outsized impact on global coffee prices. Sucden sees the global coffee market recording a fourth successive deficit this season. In other soft commodities traded, raw sugar rose 1.1% at 19.45 cents per lb, rebounding strongly from last week's five-month low, while white sugar gained 2.2% at $522.90 a ton. New York cocoa futures rose 3.3% to $11,745 a ton, while London cocoa gained 1.6% to 9,138 pounds per ton. Sign up here. https://www.reuters.com/markets/commodities/coffee-prices-surge-record-highs-above-360-per-lb-2025-01-29/