World
Global Food Price Index Trends Downward in May
By Adedapo Adesanya
Global food prices dropped in May 2023, the United Nations Food and Agriculture Organisation (FAO) said on Friday.
The FAO Food Price Index (FFPI) averaged 124.3 points in the month under review, down 3.4 points (2.6 per cent) from April and as much as 35.4 points (22.1 per cent) from the all-time high it reached in March 2022.
The decline in May was underpinned by significant drops in the price indices for vegetable oils, cereals and dairy, which were partly counterbalanced by increases in the sugar and meat indices.
The FAO Cereal Price Index averaged 129.7 points in May, down 6.5 points (4.8 per cent) from April and as much as 43.9 points (25.3 per cent) below its record-high value one year ago. International wheat prices declined by 3.5 per cent month-on-month, reflecting prospects for ample global supplies in the upcoming 2023/24 season and the extension of the Black Sea Grain Initiative.
World maize prices fell by 9.8 per cent in May. A favourable outlook for 2023/24 points to a rebound in global supplies, with higher production expected in Brazil and the US, two major exporters, weighed on prices.
A slow pace of US exports and China’s cancelled purchases also exerted downward pressure on world maize prices.
Among other coarse grains, world prices of barley and sorghum also declined, by 9.5 per cent and 9.7 per cent, respectively, influenced by declines in international maize and wheat prices.
By contrast, international prices of rice continued to increase in May, as previous deals with Asian buyers were executed, and supplies tightened in some exporters, such as Viet Nam and Pakistan.
The FAO Vegetable Oil Price Index averaged 118.7 points in May, down 11.3 points (8.7 per cent) month-on-month and standing as much as 48.2 per cent below its year-earlier level. The continued decline in the index reflected lower world prices across palm, soy, rapeseed and sunflower oils.
International palm oil prices fell markedly from April, as protracted weak global import purchases coincided with expectations of rising outputs in major producing countries.
In the meantime, world soyoil prices dropped for the sixth consecutive month, largely underpinned by the persistent pressure from a bumper soybean crop in Brazil and higher-than-expected stocks in the US, where higher supplies of alternative feedstock partially replaced the uptake from the biodiesel industry. As for rapeseed and sunflower oils, international prices continued to decline on ample global supplies.
The FAO Dairy Price Index averaged 118.7 points in May, down 3.9 points (3.2 per cent) from April and standing 25.5 points (17.7 per cent) below its corresponding value in 2022.
The decline in May was led by a steep drop in international cheese prices, principally due to ample export availabilities, including from inventories, amid seasonally high milk production in the northern hemisphere.
Following 10 consecutive monthly declines, international price quotations for milk powders rebounded, reflecting an upturn in purchases by North Asian buyers and seasonally falling milk supplies in Oceania.
Meanwhile, butter prices rose slightly, as increased price quotations for supplies from Oceania, due to high purchases by Southeast Asian buyers and seasonally falling milk supplies, were almost offset by a decline in European prices on high export availabilities.
The FAO Meat Price Index averaged 117.9 points in May, up 1.1 points (1.0 per cent) from April, marking the fourth consecutive monthly increase, but still 5.0 points (4.1 per cent) below its value in the corresponding month last year.
International poultry meat prices increased further in May, driven by the continued high import demand, especially from Asia, and some concerns over potential short-term supply challenges due to widespread avian flu outbreaks.
World bovine meat prices increased slightly, underpinned by higher global demand for Brazilian supplies and persistent supply tightness in the US despite the continued high cattle slaughter in Australia. Pig meat prices rose for the fourth successive month, although only marginally, as supply limitations stemming from high production costs and animal diseases elsewhere boosted demand for Brazilian supplies. Meanwhile, world ovine meat prices fell on high export availabilities from Oceania.
The FAO Sugar Price Index averaged 157.6 points in May, up 8.2 points (5.5 per cent) from April, marking the fourth consecutive monthly increase, and as much as 37.3 points (30.9 per cent) above its value a year ago.
Rising concerns over how the development of the El Niño phenomenon may affect the 2023/24 crops, together with lower-than-earlier-expected global availabilities in the 2022/23 season, triggered the increase in international sugar prices in May. Shipping delays amid strong competition from soybean and maize in Brazil also supported the increase in world sugar prices.
However, the positive outlook for the 2023 sugarcane crops in Brazil, along with improved weather conditions benefiting the progress of the harvest, prevented larger monthly price gains. Lower international crude oil prices and a cut in fuel prices in Brazil further contributed to limiting the month-on-month increase in world sugar prices.
By Modupe Gbadeyanka
To strengthen its position in decentralized derivatives, Synthetix is considering the acquisition of a decentralized onchain options AI-powered platform, Derive.
Derive, known for its innovative structured product offerings, has quickly gained recognition in the DeFi space for bringing intuitive and institutional-grade financial tools to the blockchain.
By integrating Derive’s front-end expertise and RWA strategies with Synthetix’ robust derivatives and liquidity infrastructure, Synthetix is positioned to accelerate the adoption of decentralized derivatives trading.
The strategic acquisition marks a significant step forward in Synthetix’s mission to launch the most renowned decentralized derivatives exchange on Ethereum Mainnet.
Under the terms of the agreement, Synthetix has proposed to acquire Derive in a token to token transaction.
The exchange ratio will be 27 $DRV <> 1 $SNX, reflecting an approximate $27 million valuation. This transaction is subject to approval from both the Synthetix and Derive community votes, taking place next week.
The acquisition is structured as a token-based merger, with Derive’s community and contributors joining Synthetix governance. The combined team will continue delivering on the Synthetix V4 roadmap and roll out options markets later this year.
“We’re combining the best onchain derivatives stack in DeFi – Derive, with one of the most iconic DeFi projects in its history – Synthetix.
“This deal will get maximum leverage out of Derive’s technical stack, and bring us closer to our shared goal of accelerating the adoption of decentralised derivatives.
“This is just the beginning, and we can’t wait to see the impact of this team up on the market,” the founder of Derive, Mr Nick Forster, stated.
“The acquisition of Derive marks a significant milestone in Synthetix’s pursuit of developing the most robust decentralized derivatives platform in the crypto ecosystem.
“We are delighted to welcome Derive into the Synthetix family, leveraging our combined expertise to drive innovation and accelerate the launch of a comprehensive decentralized derivatives platform on Ethereum,” Mr Benjamin Celermajer of Synthetix stated.
By Adedapo Adesanya
The global markets are experiencing relief as the United States and China, the world’s two largest economies, have agreed to slash tariffs on each other, to ease effects of a trade war.
Speaking after talks with Chinese officials in Geneva, US Treasury Secretary, Mr Scott Bessent told reporters that the two sides had reached a deal for a 90-day pause on measures.
US trade representative Jamieson Greer said so-called reciprocal tariffs were now at 10 per cent each.
Business Post reports that in real terms, the deal means the US is reducing its 145 per cent tariff announced by President Donald Trump to 30 per cent on Chinese goods.
A tariff of 20 per cent had been implemented on China when President Trump took office over what his administration said was a failure to stop illegal drugs entering the US.
China has agreed to reduce its 125 per cent retaliatory tariffs to 10 per cent on US goods.
Sector-specific tariffs, such as the 25 per cent tax on cars, aluminium and steel, remain in place.
Last month, President Trump announced a 90-day pause on the reciprocal tarrifs. However, China was the only country exempt from the pause on the retaliatory tariffs above the base 10 per cent levies.
The development had impacted many markets across the world from stocks to oil to bonds and minerals.
Mr Bessent said after a weekend of negotiations in Switzerland, the countries had a mechanism for continued talks.
It is the second major trade announcement made by the US in the last week, after a deal was secured with the United Kingdom on Thursday.
The move signals a willingness from the Americans to make deals on tariffs.
The news was received positively by major markets.
Brent crude is currently up 2.9 per cent to $65.78 per barrel while the US West Texas Intermediate (WTI) is up 3.1 per cent to $62.91 a barrel.
Asian stock markets on Monday as major indexes were up. In China, the Shanghai Composite stock index rose 0.8 per cent, the Shenzhen Component gained 1.7 per cent, and Hong Kong’s Hang Seng index was up nearly 3 per cent.
Korea’s Kospi grew 1.1 per cent, Japan’s Nikkei was up 0.8 per cent while India’s Nifty 50 index of most valuable companies gained more than 3 per cent, as per Sky News.
CNBC reports that US stocks look set to rise on the open, based on after-hours trading. Wall Street’s tech-heavy Nasdaq is expected to rise by 3.3 per cent, and the S&P 500 index of companies relied on to be stable and profitable by 2.5 per cent.
Mr Bessent also said, “As long as there is good faith effort, engagement and constructive dialogue, then we will keep moving forward,” in response to questions from journalists.
The market will await further developments and possible ease to recent headwinds.
By Adedapo Adesanya
The new pope of the Catholic Church has been revealed as Robert Prevost of the United States, the first American pontiff in history.
Following his emergence, he will be known as Pope Leo XIV.
Voting commenced on Wednesday, and after three rounds of black smoke, white smoke billowed above the Sistine Chapel on Thursday evening.
This is the signal that cardinals had selected a new pontiff on the second day of the conclave.
Prevost, age 69, from Chicago, Illinois, is a leader with global experience. He spent much of his career as a missionary in South America and served as a Bishop in Peru. He most recently led a powerful Vatican office for bishop appointments. He is expected to build on Pope Francis’ reforms.
There were 133 voting cardinals, who had all been sequestered inside the Vatican during the conclave. Any one of them needed two-thirds of the vote to become the next pope.
“Peace be with you all,” said Leo XIV in his first remarks as pope.
“This is the first greetings of the resurrected Christ, the good shepherd who has given up his life for God,” he said, explaining the choice of his greeting. “And I should also like this greeting of peace to enter our hearts and our families.”
Leo XIV looked visibly emotional as he waved to the adoring crowd in the square below the balcony.
A leader with global experience, he spent much of his career as a missionary in South America and most recently led a powerful Vatican office for bishop appointments. He is expected to build on Pope Francis’ reforms.
He worked for a decade in Trujillo, Peru, and was later appointed bishop of Chiclayo, another Peruvian city, where he served from 2014 to 2023.
Prevost also holds a Peruvian passport and has been a Peruvian citizen since 2015.
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