2024-06-20 06:10

JAKARTA, June 20 (Reuters) - In a jungled corner of Indonesia's Papua, the Awyu tribe await a Supreme Court verdict that will determine whether thousands of hectares of rainforest will be cleared for a vast palm oil concession to be planted atop the graves of their ancestors. "Birds of paradise, cassowaries... sacred places, and the paths of our ancestors are there," said Awyu man, Hendrikus 'Franky' Woro. "If the graves of our ancestors are removed, we will be committing a sin against them." At stake in three cases being decided by the court is the fate of nearly 115,000 hectares of forest, part of the single largest, collective palm oil bloc in the world's largest palm oil exporter, Indonesia. Located in Papua's Boven Digoel, the 270,000-hectare bloc is divided into seven concessions, three of which are now legally contested. The court decision, which lawyers expect this month, will set an important precedent in a country that has pledged to both protect a $30 billion export industry, and improve governance amid allegations of deforestation and human rights violations. "This is the first time a clear indigenous-climate nexus argument has been presented in this type of case," said Difa Shafira, from conservation group the Indonesian Center for Environmental Law, referring to calculations that clearing the land would emit approximately 23 million tonnes of environmentally harmful carbon dioxide. Representing the Awyu people's Woro clan, which claims customary ownership of the land, Franky has been fighting against a concession granted to PT Indo Asiana Lestari (IAL) on 36,000 hectares, an area more than half the size of Jakarta. A case filed at lower courts in 2023 was rejected and is now at the final stage in the Supreme Court. In a statement IAL said it had obtained all the permits legally required and had reached agreements with 12 indigenous clans in the area. "The Woro clan is acting on behalf of individuals and does not represent the clans who provide their support to the company," it said. According to internet archive, the Wayback Machine, IAL was listed as being owned by Malaysia's Whole Asia Group. The website was taken down in June and IAL did not immediately respond to questions about its ownership. Alongside the IAL case, other Awyu members are also seeking to revoke the permits of PT Kartika Cipta Pratama and PT Megakarya Jaya Raya, two other palm oil companies granted concessions within the bloc. Lawyer Eddy Marek Leks, who represents those two firms, said the companies had obtained permits in accordance with all laws. The court has not provided the date of the verdict, but is expected to rule on all cases concurrently. DEFORESTATION Home to a third of the world's rainforest, Indonesia introduced a moratorium on forest clearance for activities such as palm oil and logging in 2011. The policy has been extended, but some forests continue to cleared due to a lack of oversight, regulatory cohesion and land classification, including for palm oil. Used in everything from chocolate, soap, fuel and lipstick, palm oil is the world's most widely used vegetable oil, with nearly 60% originating from Indonesia. The ubiquitous oil's link to deforestation was a driving factor behind the European Union's new regulation banning the import of products linked to forest clearance. The forest area Franky is seeking to protect was classified by the environment ministry in 2012 as an "other use area", meaning it can be used for palm oil. But there now seems to be a change in official tune. Questioned in parliament last week, environment minister Siti Nurbaya Bakar said primary forest could not be cleared, and the government was currently re-classifying intact primary forest as customary forest, or forest designated for the indigenous people of the area. Travelling to Jakarta with a symbolic piece of land, Franky says the decision will dictate his tribe's future. "We can live without mining, without palm oil," he said, "But if we don't have customary forests, we can't live." Sign up here. https://www.reuters.com/world/asia-pacific/papuan-tribe-palm-oil-firms-battle-land-rights-indonesian-top-court-2024-06-20/

2024-06-20 06:01

MEXICO CITY, June 19 (Reuters) - Mexican President Andres Manuel Lopez Obrador said on Wednesday that he would ask the country's foreign minister to speak with the U.S. ambassador to the country to restart U.S. imports of Mexican avocados. The U.S. suspended inspections of avocados last week due to a safety incident in the Mexican state of Michoacan, effectively halting the flow of avocados into the country. Sign up here. https://www.reuters.com/world/americas/mexico-foreign-ministry-speak-with-us-end-avocado-conflict-president-says-2024-06-20/

2024-06-20 06:00

Spain's pig farmers stand to lose most in China dumping probe Spain's pork industry says it is resilient Car industry more important than pork sector for Spain: analyst MADRID, June 20 (Reuters) - China's dumping probe into EU pork imports following duties slapped on Chinese EVs, caught Spain's pig farmers on the hop this week, but the sector has proved it is resilient and far less vulnerable than the bloc's car industry. Spain supplied 22% of China's imported pork in 2023, worth 1.2 billion euros ($1.29 billion), and stands to lose more than any of the bloc's members from the probe into underpriced pork after the EU took aim at China's subsidised electric vehicle imports last week. "It was like a shock of cold water, we didn't expect it," said Giuseppe Aloisio, general director of the National Association of Spanish Meat Industries (ANICE), of the announcement. "This is a concern because the volume is significant, but it will not bankrupt the pork sector if the Chinese end up deciding to impose tariffs," he added. The investigation was prompted by a complaint submitted by the China Animal Husbandry Association on behalf of the domestic pork industry, China said, without giving further details. The subsidies received by the pork industry comply with World Trade Organization rules, Spain's Agriculture Minister Luis Planas said in a press conference on Tuesday, adding that Spain is speaking to the EU about possible solutions. With the probe likely to take at least a year to complete, there is plenty of time for negotiation. Spain's pork sector has shown itself to be resilient though, and the greater strategic importance of its car industry - the second-largest in Europe behind Germany - means Spain is unlikely to try and push the EU to row back its measures against Chinese EVs despite the threat of pork tariffs, said Miguel Otero, a senior analyst at Elcano Royal Institute in Madrid. European automakers are being challenged by an influx of lower-cost EVs from Chinese rivals. The European Commission estimates their share of the EU market has risen to 8% from below 1% in 2019 and prices are typically 20% below those of EU-made models. SACRIFICE THE PORK "If the trade-off is you're not going to export any pork to China but you keep the car industry as it is or you expand it, you sacrifice the pork," Otero said. Spain hasn't stated a position on EV tariffs. The Economy Ministry declined to comment. Cars and car parts accounted for 18% of Spain's total exports and 10% of its gross domestic product in 2023, according to the Spanish Institute for Foreign Trade (ICEX). The industry was worth about 40 billion euros, according to the Spanish Carmakers Association. The EU on June 12 placed extra duties on Chinese EVs to combat what it said were excessive subsidies and to protect an industry worth more than 1 trillion euros, according to McKinsey & Company. Spain's pork industry, meanwhile, withstood import bans by Russia over swine flu fears in 2009 and 2013 and after EU sanctions were imposed in 2014 on Russia for its annexation of Crimea. Russia was Spain's biggest customer outside the EU in 2012, importing 153 million euros of frozen pork before falling to just 180,000 euros in 2014. The sector is ready to pivot to other markets again, as it did from Russia, said Alberto Herranz, director of Spain's pork producers' association Interporc. "When the Russian market was closed, we didn't go crying to the European Union, nor did we go crying to the Ministry of Agriculture, but what we did was to take a step forward and look for diversification," Herranz said. Trade with China picked up just as exports to Russia ground to a halt. Spain's exports of frozen pork to China reached a peak of 2.5 billion euros in 2020 as an outbreak of swine flu ravaged China's domestic production. While China remains its largest market, exports have since fallen and are expected to keep falling as China's production returns to normal. Meanwhile, exporters are already making contingency plans, growing other Asian markets such as Japan, South Korea and the Philippines, according to ICEX data. Still, the bloc's biggest pork producer, which has benefited from swine fever hitting Germany's production, feels aggrieved it has become collateral damage in a fight between two of the world's largest trading powers, said ANICE's Aloisio. "We see ourselves as spectators and victims of a train crash between great economic powers, and we are beginning to pay the price," he said. But the response from China could have been far worse given that the pork industry is a small percentage of EU exports to China and that producers have time to adapt and suggests an unwillingness to square up for a fight, Eurointelligence analysts wrote in a note. "It may show that China is willing to cut a deal with the EU over the tariffs, rather than treat them as the opening salvo of a trade war," Eurointelligence said. ($1 = 0.9312 euros) Sign up here. https://www.reuters.com/markets/commodities/chinas-dumping-probe-another-test-resilience-spains-pig-farmers-2024-06-20/

2024-06-20 05:19

NEW YORK, June 20 (Reuters) - Wall Street shares pulled back from record highs hit early on Thursday in sympathy with rallying overseas indexes, as Treasury yields shook off soft U.S. data and rose anticipating new supply next week. The dollar firmed, as higher U.S. yields widened differentials with non-dollar rates that are trending lower. It drew closer to the 160 yen area that prompted Tokyo to intervene in late April to support its currency. The Dow Jones Industrial Average was the only major index that held gains. The S&P 500 (.SPX) New Tab, opens new tab and Nasdaq (.IXIC) New Tab, opens new tab extended their string of intraday all-time highs before reversing, and the Nasdaq ended a seven-session streak of record closing highs. Disappointing housing starts and building permits data, along with a jobless claims report suggested a gradual cooling in the labor market, appeared to make the case that the Fed's restrictive policy is having its intended effect. "The weaker-than-expected economic data is suggesting that the higher-for-longer interest rates are achieving the Fed's objectives," said Greg Bassuk, chief executive officer at AXS Investments in New York. "These signs of a slightly slowing economy are going to be welcomed by the Fed as they consider a move toward interest rate cuts." This, combined with dovish sentiment expressed by the Bank of England as it held off easing before the looming British general election, and an interest rate cut by the Swiss National Bank, seemed to give the Fed some maneuvering room over the timing of its first interest rate cut. Minneapolis Federal Reserve President Neel Kashkari said while the U.S. economy has proven resilient, he sees some softening around the edges. Even so, expectations for a rate cut as soon as September have faded a bit. Financial markets are currently pricing in a 57.9% chance of a 25-basis-point rate cut in September, down from 61.1% a week ago, according to CME's FedWatch tool. The Dow rose 0.77% to close at 39,134.96, the S&P 500 (.SPX) New Tab, opens new tab lost 0.25% to 5,473.22, and the Nasdaq Composite (.IXIC) New Tab, opens new tab lost 0.79% to close at 17,721.59. Wall Street's rally has been driven by enthusiasm over artificial intelligence, led by chipmaker Nvidia (NVDA.O) New Tab, opens new tab, which recently claimed the mantle as the world's most valuable company by market cap. Nvidia also reversed morning gains and was down about 2%. TECH, REAL ESTATE BOOST EUROPEAN STOCKS European shares were given a boost by tech and real estate, and by a rally in Swiss equities after the central bank continued to loosen monetary policy. The STOXX 600 (.STOXX) New Tab, opens new tab index rose 0.93%, while Europe's broad FTSEurofirst 300 index (.FTEU3) New Tab, opens new tab rose 0.90%. MSCI's gauge of stocks across the globe (.MIWD00000PUS) New Tab, opens new tab hit a record high but closed off 0.15% at 803.89. Emerging market stocks lost 0.06%. MSCI's broadest index of Asia-Pacific shares outside Japan (.MIAPJ0000PUS) New Tab, opens new tab closed 0.16% lower, while Japan's Nikkei (.N225) New Tab, opens new tab rose 0.16%. U.S. Treasury yields initially backed away from their highs following the economic data, before resuming their climb. The market is looking ahead to next week's auction of about $183 billion in U.S. two-, five- and seven-year Treasury notes. Investors tend to sell Treasuries ahead of auctions to push up the yield before buying them back at a lower price, a practice called concession. The yield on benchmark U.S. 10-year notes rose 3.7 basis points from late Tuesday to 4.254%. The 30-year bond yield rose 3.7 basis points to 4.3908%. The 2-year note yield, which typically moves in step with interest rate expectations, rose 2.7 basis points to 4.7308%. The dollar index , which measures the greenback against a basket of currencies including the yen and the euro, gained 0.4% to 105.63, while the euro shed 0.34% to wrap up the day at $1.0703. Against the Japanese yen , the dollar strengthened to its highest since April 29 and was up 0.51% at 158.89 yen. Sterling fell to a five-week low against the dollar and was last trading 0.43% lower at $1.2662. "When we think about the strength of the dollar it feels as though for the first time in a while we have a diversion in global monetary policy ... the parade of Fed speakers we have in the U.S. continues to talk about being patient and needing more time," said Art Hogan, chief market strategist at B Riley Wealth in New York. "The dollar stands out but its got some pretty weak competition in Japan so I think that’s exacerbating the move." U.S. crude gained 0.74% to $82.17 a barrel and Brent rose to $85.71 per barrel, up 0.75% on the day. Spot gold added 1.36% to $2,359.22 an ounce. U.S. gold futures gained 1.01% to $2,354.00 an ounce. In cryptocurrencies, bitcoin gained 0.27% at $65,029.00. Ethereum declined 0.47% at $3,534.8. Sign up here. https://www.reuters.com/markets/global-markets-wrapup-1-2024-06-20/

2024-06-20 05:13

MUMBAI, June 20 (Reuters) - The Indian rupee was little changed on Thursday as weakness in Asian currencies offset a broadly positive bias on the rupee amid expectations of portfolio inflows and the Reserve Bank of India's stern defence of the currency. The rupee was at 83.4925 against the U.S. dollar as of 10:25 a.m. IST, compared with its previous close at 83.4550. The dollar index was at 105.3, while most Asian currencies declined, with the Indonesian rupiah falling to a four-year low and the Chinese yuan slightly lower at 7.28, its weakest level since November 2023. Weakness in the yuan may keep some pressure on the rupee during the day but the broad bias is tilted higher, a foreign exchange trader at a foreign bank said. Traders expect inflows into India's sovereign bonds on account of India's inclusion in the JPMorgan emerging market debt index later this month to support gains in the rupee alongside flows into local equities. Foreign investors bought local stocks worth about $948 million on a net basis on Wednesday, according to provisional exchange data. Foreign inflows into Indian bonds are expected to hit a decade-high of $2 billion around June 28 when they will be included in a widely tracked JPMorgan index. "While external factors have capped further gains, the outlook for the rupee remains stable," said Amit Pabari, managing director at FX advisory firm CR Forex. Investors will now keep an eye on U.S. jobless claims data which may offer cues on the future path of the Federal Reserve's policy rates. Interest rate futures are currently pricing in nearly a 64% chance of a rate cut in September, according to the CME's FedWatch tool. Sign up here. https://www.reuters.com/markets/currencies/rupee-edges-lower-decline-asian-peers-counters-upward-bias-2024-06-20/

2024-06-20 04:52

NEW YORK, June 20 (Reuters) - The dollar rose to a seven-week high against the yen on Thursday, while the sterling and euro fell amid on the U.S. economy is coming off the boil while traders watch for more data bolstering the case for a Federal Reserve rate cut this year. May retail sales released this week were tepid and the labor market appears to be weakening. The number of Americans filing new claims for unemployment benefits fell last week, but was still more than expected, data released on Thursday showed, indicating the jobs market remained strong despite a gradual cooling. "U.S. (purchasing managers' index) tomorrow could provide more of a catalyst for a higher volatility day, so we'll be keeping our eyes on that to wrap up the week," said Helen Given, associate director of trading at Monex USA, in Washington. The dollar hit its highest since April 29 against the yen and was last up 0.51% at 158.89 yen in New York trading. Traders remain on alert for signs of continued intervention by the Bank of Japan to boost a currency that hit 34-year lows in late April. Yen markets have been rattled since a dovish Bank of Japan last week maintained its policy target and said it intends to soon release a plan to trim bond buying. "I think the market was kind of disappointed in the Bank of Japan's actions. It felt a bit like kicking the can down the road again for the yen for the market," said Amo Sahota, director, Klarity FX, in San Francisco. "Well, in that case, we'll just carry on with a very simple carry trade that we've been doing. The Bank of Japan and the Ministry of Finance must be getting a little nervous or focusing back on the intervention risks." Japan's top currency diplomat Masato Kanda said earlier on Thursday there is no limit to the resources available for foreign exchange interventions, Jiji News Agency reported. Along with yen weakness, downturns in the euro and sterling have supported the dollar index , which tracks the currency against six peers, rise 0.4% to 105.61. The euro was last down 0.34% against the dollar at $1.0708. It hit a session low of 1.0706, but remained above the six-week low of $1.0667 hit on Friday. Sterling fell 0.42% to $1.2667, after hitting a five-week low in afternoon trading. Earlier in the day, the Bank of England left rates on hold, with some policymakers saying their decision not to cut was "finely balanced". The Swiss franc also fell after the Swiss National Bank lowered interest rates to 1.25%, following a cut in March. The dollar climbed 0.7% to 0.8909 francs as the Swiss currency fell from around a three-month high after the rate cut, which came with forecasts predicting a further fall in inflation to 1.1% in 2025. The dollar index rose after a volatile 10 days, with mixed U.S. economic data and political uncertainty in France that rocked European markets. "All told, it looks like the dollar is going to head toward its fifth straight week of gains simply because the U.S. economic situation is not as bad as that of many of its peers," said Given. In cryptocurrencies, bitcoin rose about 0.4% to $65,105. Sign up here. https://www.reuters.com/markets/currencies/sterling-steady-ahead-boe-decision-dollar-wobbles-against-yen-2024-06-20/