The World Trade Organization chief voiced cautious optimism Sunday as global trade ministers gather to tackle food security threatened by Russia’s invasion of Ukraine, overfishing and equitable access to COVID vaccines.

Speaking just hours before the opening of the WTO’s first ministerial meeting in nearly five years, Ngozi Okonjo-Iweala acknowledged that “the road will be bumpy and rocky, there may be a few landmines on the way.”

But she told journalists she was “cautiously optimistic that we’ll get one or two deliverables,” adding she would consider that “a success.”

With its first ministerial meeting in years, the WTO faces pressure to finally eke out long-sought trade deals and show unity amid the still raging pandemic and an impending global hunger crisis.

Top of the agenda as the four-day meeting kicks off is the toll Russia’s war in Ukraine, traditionally a breadbasket that feeds hundreds of millions of people, is having on food security.

EU trade commissioner Valdis Dombrovskis said the bloc had been “working hard with all the members to prepare a multilateral food security package,” and slammed Russia for “using food and grain as a weapon of war.”

The WTO is hoping to keep criticism of Russia’s war in Ukraine to the first day of talks, when many of the more than 100 ministers due to attend are expected to issue blistering statements.

But with many flatly refusing to negotiate directly with Moscow, there are fears this could bleed into the following days, when the WTO wants to focus on nailing down elusive trade deals.

“There is a real risk that things could go off the rails next week,” a Geneva-based diplomatic source said.

Fisheries deal in sight?

The tensions have not curbed Okonjo-Iweala’s zeal to press for agreements on a range of issues during the first ministerial gathering on her watch, especially as the global trade body strives to prove its worth after nearly a decade with no new large trade deals.

There is cautious optimism that countries could finally agree on banning subsidies that contribute to illegal and unregulated fishing, after more than 20 years of negotiations.

The WTO says talks have never been this close to the finish line, but diplomats remain cautious.

The negotiations “have made progress recently, but these remain difficult subjects,” a diplomatic source in Geneva told AFP.

One of the main sticking points has been so-called special and differential treatment (SDT) for developing countries, like major fishing nation India, which can request exemptions.

A draft text sent to the ministers for review proposes exemptions should not apply to member states accounting for an as yet undefined share of the global volume of fishing.

The duration of exemptions also remains undefined.

Environmental groups say anything beyond 10 years would be catastrophic. India has demanded a 25-year exemption.

India ‘creating problems’

“Twenty-five years is an unreasonable length of time,” Isabel Jarrett, head of the Pew Charitable Trusts’ project to end harmful fisheries subsidies, told AFP, warning so much leeway would be “devastating for fish stocks.”

Colombian Ambassador Santiago Wills, who chairs the WTO fisheries subsidies negotiations, stressed the urgency of securing a deal.

“The longer we wait, the more the fish lose. And the more the fish lose, the more we all lose,” he said in a statement Saturday.

India however appears to be stubbornly sticking to its demands on fisheries and in other areas, jeopardizing the chances of reaching deals since WTO agreements require full consensus backing.

“There is not a single issue that India is not blocking,” a Geneva-based ambassador said, singling out WTO reform and agriculture.

A source with knowledge of the negotiations towards a text on food security also said “the Indians are still creating problems.”

Elvire Fabry, a senior research fellow at the Jacques Delors Institute, said India had appeared eager to “throw more weight around” in international organisations, warning New Delhi was capable of scuppering talks.

Patent waiver?

The ministers are also set to seek a joint WTO response to the pandemic, although significant obstacles remain.

Back in October 2020, India and South Africa called for intellectual property rights on Covid-19 vaccines and other pandemic responses to be suspended in a bid to ensure more equitable access in poorer nations.

After multiple rounds of talks, the European Union, the United States, India and South Africa hammered out a compromise that has become the basis for a draft text sent to ministers.

The text, which would allow most developing countries, although not China, to produce COVID vaccines without authorization from patent holders, is still facing opposition from both sides.

Britain and Switzerland are reluctant to sign up, arguing along with the pharmaceutical industry that the waiver would undermine investment in innovation.

Public interest groups meanwhile say the text falls far short of what is needed by covering only vaccines and not Covid treatments and diagnostics.

“The negotiations are still aeons away from ensuring access to lifesaving COVID medical tools for everyone, everywhere,” medical charity Doctors Without Borders warned.
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Legislation that Britain will unilaterally bring forward on Monday to scrap some of the rules that govern post-Brexit trade with Northern Ireland will not break international law, minister Brandon Lewis said on Sunday.

“The legislation that we will outline tomorrow is within the law; what we are going to do is lawful and it is correct,” the Northern Ireland Secretary told Sky News.

When Britain left the EU, Prime Minister Boris Johnson agreed a protocol that effectively left Northern Ireland in the EU’s single market and customs union to preserve the open border with Ireland specified in the Good Friday peace agreement.

Any unilateral move by London to override the treaty will inflame a simmering argument with the European Union.

Ireland’s Sinn Fein, the nationalist party that won a historic victory in the Northern Ireland Assembly election last month, said on Sunday Britain would “undoubtedly” break the law by imposing unilateral changes to the protocol.

Lewis said however the protocol needed to be changed because it was “fundamentally undermining” the Good Friday agreement.

He said it was disrupting the lives of people in Northern Ireland, was stopping government institutions functioning, and was not respecting the UK’s own internal market. 

Lewis declined to say how the protocol would be changed, but said the government would set out the legal basis on which it was bringing forward the legislation.

Sinn Fein president Mary Lou McDonald said London could work with Dublin and Brussels to improve the application of the protocol.

“There is a willingness here, there is a willingness to engage by the European Commission, but the British government has refused to engage,” she told Sky News from Dublin.

“It has not been constructive, it has sought a destructive path, and is now proposing to introduce legislation that will undoubtedly breach international law.”
…

The World Trade Organization is facing one of its most dire moments, the culmination of years of slide toward oblivion and ineffectiveness. Now may be a chance to turn the tide and reemerge as a champion of free and fair trade — or face a future further in doubt.

For the first time in 4½ years, after a pandemic pause, government ministers from WTO countries will gather for four days starting Sunday to tackle issues like overfishing of the seas, COVID-19 vaccines for the developing world and food security at a time when Russia’s war in Ukraine has blocked the export of millions of tons of Ukrainian grain to developing nations.

Facing a key test of her diplomatic skill since taking the job 15 months ago, WTO Director-General Ngozi Okonjo-Iweala in recent days expressed “cautious optimism” that progress could be made on at least one of four issues expected to dominate the meeting: fisheries subsidies, agriculture, the pandemic response and reform of the organization, spokesman Fernando Puchol said.

Diplomats and trade teams have been working “flat out — long, long hours” to serve up at least one “clean text” for a possible agreement — that ministers can simply rubber-stamp and not have to negotiate — on one of those issues, Puchol told reporters Friday.

“It’s difficult to predict a result right now,” he said.

The Geneva-based body, barely a quarter-century old, brings together 164 countries to help ensure smooth and fair international trade and settle trade disputes. Some outside experts expect few accomplishments out of the meeting, saying the main one may simply be getting the ministers to the table.

“The multilateral trading system is in a bad way. The Ukraine situation is not helping,” said Clemens Boonekamp, an independent trade policy analyst and former head of WTO’s agricultural division. “But the mere fact that they are coming together is a sign of respect for the system.”

Alan Wolff, a former WTO deputy director-general, sounded optimistic that members could make at least some headway.

They might reach an agreement, he said, to help relieve a looming global food crisis arising from the war in Ukraine by ensuring the U.N. World Food Program receives a waiver from food export bans imposed by WTO countries eager to feed their own people.

Wolff, now senior fellow at the Peterson Institute for International Economics in Washington, expressed confidence in Okonjo-Iweala, saying, “I’m not willing to sell her short.”

He said members “seem to be making progress” on an agreement to scale back subsidies that encourage overfishing — something they have been trying to do for more than two decades.

“Do they wrap it up this time?” Wolff asked. “Unclear. It’s been a drama.”

One problem — among many — is that the WTO operates by consensus, so any one of its 164 member countries could gum up the works.

In short, the WTO has become an important diplomatic battleground between developed and developing countries, and some experts say reform is needed if it’s ever to get things done.

The trade body, created in 1995 as a successor to the General Agreement on Tariffs and Trade, has seen a slow unraveling. It hasn’t produced a major trade deal in years. The last big success was a 2014 agreement billed as a boost to lower-income countries that cut red tape on goods clearing borders.

Years ago, the United States started clamping down on the WTO’s appeals court, which in theory delivers the last word on trade disputes, such as a high-profile one between the U.S. and EU involving plane-making giants Airbus and Boeing.

Then, U.S. President Donald Trump came along, threatening to pull America out of the WTO over his insistence that it was unfair to the U.S. In the end, he didn’t, and simply bypassed the WTO — slapping sanctions on allies and foes alike and ignoring the trade organization’s rulebook and dispute-resolution system.

Once a champion of the WTO, the United States has rued the admission of China and insists Beijing has been violating the trade body’s rules too much. The U.S. accuses China of excessively supporting state-run companies and impeding free trade, among other things. China denies those allegations.

A generation ago, the WTO drew huge, vituperative, even violent protests — notably from anti-globalists and anarchists who detested its closed-door secrecy and elites-decide-all image.

William Reinsch, a former U.S. trade official, warned that the WTO is now in danger of becoming irrelevant. The best way to show that it still matters, he wrote this month, is to negotiate an agreement, perhaps on fisheries, COVID-19 vaccines or a more difficult issue: encouraging more free trade in farming.

Reinsch, now at the Center for Strategic and International Studies in Washington, said the United States needs to be doing more — including making compromises — to ensure the WTO can reach agreement on contentious issues.

“The future of the WTO is at risk,” he said. “Failure would be bad for the fish and the farmers, but it would also be bad for a rule-of-law-based global economy.”
…

An internet rumor blazed through the country that desperate people were selling their toes for cash. The false report became so widespread that the country’s Deputy Minister of Information Kindness Paradza visited street vendors in central Harare earlier this month to debunk it.

One-by-one the traders took off their shoes to show that they had all 10 toes, as Zimbabwe’s state media recorded the digital investigation.

Paradza declared the toes-for-money story a hoax, as did local and foreign fact-checkers. Police later arrested a street vendor who now faces a fine or 6 months in jail on charges of criminal nuisance for allegedly starting the story.

It’s starkly true, however, that Zimbabweans are finding it increasingly difficult to make ends meet. Since the start of Russia’s war in Ukraine, Zimbabwe’s inflation rate has shot up from 66% to more than 130%, according to official statistics. The war is blamed for rising fuel and food prices.

The war in Ukraine has exacerbated inflation around the world. Consumer prices in the 19 European Union countries that use the euro currency surged 8.1% in May, a record rate as energy and food costs climbed. In the U.S. and the United Kingdom, annual inflation hit or was close to 40-year highs of 8.3% and 9%, respectively, in April. Turkey approached Zimbabwe’s eye-watering prices, with inflation reaching 73.5% in May, the highest in 24 years.

In Zimbabwe, the impact of the Ukraine war is heaping problems on its fragile economy. The war “coupled with our historical domestic imbalances, has created challenges in terms of economic instability seen through the currency volatility and spilling over into price volatility,” Finance Minister Mthuli Ncube told Parliament in May.

Teachers “can no longer afford bread and other basics, this is too much,” tweeted the Progressive Teachers Union of Zimbabwe in early June. The three largest teachers’ unions are demanding the government pay their salaries in U.S. dollars because their pay in local currency is “eroded overnight.”

“Because of high inflation, the local currency is collapsing,” economic analyst Prosper Chitambara told The Associated Press. “Individuals and companies no longer trust the local currency and that has put pressure on the demand for U.S. dollars. The Ukraine war is simply exacerbating an already difficult situation.”

Many fear Zimbabwe could return to the hyperinflation of 2008, which was estimated at 500 billion percent, according to the International Monetary Fund. At that time, plastic bags full of 100 trillion Zimbabwe dollar banknotes were not enough to buy basic groceries.

The economic catastrophe forced then-President Robert Mugabe to form a “unity government” with the opposition and adopt a multi-currency system in 2009 in which US dollars and the South African rand were accepted as legal tender.

The U.S. dollar continues to dominate with prices in local currency often benchmarked to the rates for the American currency on the flourishing illegal market, where most individuals and companies get their foreign currency.

Across the country, currency traders line the streets and crowd entrances to shopping centers waving wads of both the local currency and U.S dollars.

Many Zimbabweans who earn in local currency such as government workers are forced to source dollars on the illegal market, where exchange rates are soaring, to pay for goods and services that are increasingly being charged in U.S. dollars.

Retailers said the rising rates for U.S. dollars on the illegal market are forcing them to frequently increase prices, often every few days, to allow them to restock.

The once-prosperous southern African country’s economy is battered by years of de-industrialization, corruption, low investment, low exports and high debt. Zimbabwe struggles to generate an adequate inflow of greenbacks needed for its largely dollarized local economy.

Ordinary Zimbabweans are returning to coping mechanisms they relied on during the hyperinflationary era such as skipping meals. Others now buy food items in smaller quantities, sometimes in such tiny packages they are enough for just a single meal. Locals call them “tsaona,” meaning “accident” in the local Shona language.

Promising better days ahead, Ncube, the finance minister, said the government “will not hesitate to act and intervene to cushion against price increases and exchange rate volatility.”

Many are skeptical of such vows from the government, saying nothing short of a miracle will pull Zimbabwe out of its economic crisis. Even while coping with constantly rising prices, many can’t help making grim jokes about the situation.

“I still have all my toes intact but it wouldn’t hurt selling one,” chuckled Harare resident Asani Sibanda. “I could still walk without it, but my family would at least get some food.”
…

U.S. President Joe Biden said his administration is doing all it can to tackle inflation, placing blame for rising prices on oil and shipping companies, as new data show consumer prices have reached a four-decade high.

During a speech at the Port of Los Angeles on Friday, Biden said that oil companies are deliberately not increasing production to keep prices high.

He said oil companies “had 9,000 permits to drill. They are not drilling. Why aren’t they drilling?”

“Because they make money not producing more oil,” the president said.

Asked about Exxon’s profits, Biden said, “Exxon made more money than God this year.”

The president also criticized oil companies for spending billions to buy back the stock of their own companies and said the practice should be taxed.

Exxon objected to several of the president’s accusations.

Brian Deese, Biden’s chief economic adviser, met with the chief executives of Exxon and Chevron this week at the companies’ request, two people familiar with the matter told CNBC. Those discussions included prices, production and market conditions.

Exxon also said it plans a 50% increase in capital expenditures in the petroleum-rich Permian Basin in 2022 compared with 2021 and is boosting refining capacity for U.S. light crude oil to process about 250,000 barrels more per day, CNBC reported.

Labor Department data Friday showed that consumer prices rose 8.6% in May from the previous year. The cost of gas was up nearly 50% in one year, and groceries rose nearly 12% in that timeframe, the biggest such increase since 1979.

Biden said Friday that the major Asian shipping companies have increased their prices by as much as 1,000%. He called on Congress to consider taking action against them.

The president also repeated his view that inflation is being caused in part by Russian President Vladimir Putin’s war in Ukraine.

“We’ve never seen anything like Putin’s tax on both food and gas,” he said.

Biden touted his administration’s efforts to move cargo in and out of the Port of Los Angeles, which faced severe bottlenecks last year. However, while the number of ships waiting to enter the port for long periods of time has fallen by about 40%, according to the White House, inflation has not dropped.

The president is facing criticism from Republican lawmakers over his inability to stop prices from rising and is seeing decreasing support from voters. Two-thirds of Americans disapprove of Biden’s handling of the economy, according to a May poll from The Associated Press and NORC Center for Public Research.

The president argued Monday that the entire world is facing rising inflation and said, “America can tackle inflation from a position of strength.” He noted the country has a strong job market and an unemployment rate near historic lows.

During his speech Friday, Biden also addressed the January 6 attack on the U.S. Capitol after Thursday night’s first televised congressional hearing on the attack.

While Biden said he did not watch the hearing, he said the attack was “one of the darkest chapters in our nation’s history,” and said it is important the American public understands what truly happened. The hearings are scheduled to continue next week.

VOA’s Megan Duzor and The Associated Press contributed to this report.
…

Wall Street’s realization that inflation got worse last month, not better as hoped, sent markets reeling on Friday. 

The S&P 500 sank 2.9% to lock in its ninth losing week in the last 10, and tumbling bond prices sent Treasury yields to their highest levels in years. The Dow Jones Industrial Average lost 2.7%, and the Nasdaq composite dropped 3.5%. 

Wall Street came into Friday hoping a highly anticipated report would show the worst inflation in generations slowed a touch last month and passed its peak. Instead, the U.S. government said inflation accelerated to 8.6% in May from 8.3% a month before. 

The Federal Reserve has begun raising interest rates and making other moves in order to slow the economy, in hopes of forcing down inflation. Wall Street took Friday’s reading to mean the Fed’s foot will remain firmly on the brake for the economy, dashing hopes that it may ease up later this year. 

“Inflation is hot, hot, hot,” said Brian Jacobsen, senior investment strategist at Allspring Global Investments. “Basically, everything was up.” 

The growing expectation is for the Fed to raise its key short-term interest rate by half a percentage point at each of its next three meetings, beginning next week. That third one in September had been up for debate among investors in recent weeks. Only once since 2000 has the Fed raised rates that much. 

“No relief is in sight, but a lot can change between now and September,” Jacobsen said. “Nobody knows what the Fed will do in a few months, including the Fed.” 

The nation’s high inflation, plus the expectations for an aggressive Fed, have sent the two-year Treasury yield to its highest level since 2008 and the S&P 500 down 18.7% from its record set in early January. The worst pain has hit high-growth technology stocks, cryptocurrencies and other particularly big winners of the pandemic’s earlier days. But the damage is broadening as retailers and others are warning about upcoming profits. 

The S&P 500 fell 116.96 points to 3,900.86. Combined with its losses from Thursday, when investors were rushing to lock in final trades before the inflation report, it was the worst two-day stretch for Wall Street’s benchmark in nearly two years. 

The Dow lost 880.00 points to 31,392.79, and the Nasdaq tumbled 414.20 to 11,340.02. 

Stock prices rise and fall on two things, essentially: how much cash a company produces and how much an investor is willing to pay for it. The Fed’s moves on interest rates heavily influence that second part. 

Since early in the pandemic, record-low interest rates engineered by the Fed and other central banks helped keep investment prices high. Now “easy mode” for investors is abruptly and forcefully being switched off. 

Not only that, too-aggressive rate hikes by the Fed could ultimately force the economy into a recession. Higher interest rates make borrowing more expensive, which drags on spending and investments by households and companies. 

One of the fears among investors is that food and fuel costs may keep surging, regardless of how aggressively the Fed moves. 

“The fact is that the Fed has very little ability to control food prices,” Rick Rieder, BlackRock’s chief investment officer of global fixed income, said in a statement. He pointed instead to mismatches in supplies and demand, higher costs for energy and wages and the crisis in Ukraine, which is a major breadbasket for the world. 

That raises the threat that central banks will overly tighten the brakes on the economy, as they push against a string “and essentially fall into a damaging policy mistake,” Rieder said. 

The economy has already shown some mixed signals, and a report on Friday indicated consumer sentiment is worsening more than economists expected. Much of the souring in the University of Michigan’s preliminary reading was because of higher gasoline prices. 

That adds to several recent profit warnings from retailers indicating U.S. shoppers are slowing or at least changing their spending because of inflation. Such spending is the heart of the U.S. economy. 

 
…

WASHINGTON – U.S. consumer prices accelerated in May as gasoline prices hit a record high and the cost of food soared, leading to the largest annual increase in nearly 40 1/2 years, suggesting that the Federal Reserve could continue with its 50 basis points interest rate hikes through September to combat inflation.

The faster-than-expected increase in inflation last month reported by the Labor Department on Friday also reflected a surge in rents, which increased by the most since 1990. The relentless price pressures are forcing Americans to change their spending habits and will certainly heighten fears of either an outright recession or period of very slow growth.

High inflation also poses a political risk for President Joe Biden and his Democratic Party heading into the mid-term elections in November.

“There’s little respite from four-decade high inflation until energy and food costs simmer down and excess demand pressures abate in response to tighter monetary policy,” said

Sal Guatieri, a senior economist at BMO Capital Markets in Toronto. “The Fed might still raise policy rates ‘just’ 50 basis points next week, but it could easily ratchet up the pace beyond then if inflation keeps surprising to the high side.”

The consumer price index increased 1.0% last month after gaining 0.3% in April.

Gasoline prices rebounded 4.1% after falling 6.1% in April. Prices at the pump shot up in May, averaging around $4.37 per gallon, according to data from AAA. They were flirting with $5 per gallon on Friday, indicating that the monthly CPI would remain elevated in June.

Food prices jumped 1.2%. Prices of dairy and related products rose 2.9%, the largest gain since July 2007. Food prices have soared following Russia’s unprovoked war against Ukraine.

China’s zero COVID-19 policy, which dislocated supply chains, is also seen keeping goods prices strong.

Economists polled by Reuters had forecast the monthly CPI picking up 0.7%. In the 12 months through May, the CPI increased 8.6%. That was the largest year-on-year increase since December 1981 and followed an 8.3% advance in April. Economists had hoped the annual CPI rate peaked in April.

The inflation report was published ahead of an anticipated second 50 basis points rate hike from the Fed next Wednesday.

The U.S. central bank is expected to raise its policy interest rate by an additional half a percentage point in July. It has hiked the overnight rate by 75 basis points since March.

U.S. stocks opened lower. The dollar rose against a basket of currencies. U.S. Treasury prices were mixed.

Strong underlying inflation 

Underlying inflation was equally strong last month as prices for services like rents, hotel accommodation and airline travel maintained their upward push. There had been hope that the shift in spending from goods to services would help to cool inflation.

But a tight labor market is driving up wages, contributing to higher prices for services.

Excluding the volatile food and energy components, the CPI climbed 0.6% after advancing by the same margin in April.

The so-called core CPI increased 6.0% in the 12-months through May. That followed a 6.2% rise in April. Inflation by all measures has far exceeded the Fed’s 2% target.

The core CPI was lifted by rents, with owners’ equivalent rent of primary residence, which is what a homeowner would receive from renting a home, rising a solid 0.6%. That was the largest increase since August 1990.

Airline fares increased 12.6% after surging 18.6% in April. Used cars and trucks prices rebounded 1.8% after declining for three straight months. New motor vehicle prices rose a solid 1.0%, while the cost of medical care increased 0.4%.

Consumers also paid more for household furnishings and operations as well as recreation. Apparel prices rose 0.7%. There were also increases in the cost of motor vehicle insurance, personal care, education and tobacco.
…

India’s surprise decision to ban wheat exports has raised concerns about potential curbs on rice exports as well, prompting rice traders to step up purchases and place atypical orders for longer-dated deliveries.

Government and trade officials have said India, the world’s biggest exporter of rice, does not plan to curb shipments for now, as local prices remain low and state warehouses hold ample supplies.

That’s a relief for import-dependent countries already grappling with surging food costs, but most of India’s rice growing season lies ahead and any change in prospects for the harvest could alter its stance on exports of the staple grain.

Monsoon rains determine the size of India’s rice crop, and plentiful rains this year would help it maintain its preeminent position in the global rice trade.

Patchy monsoon rains, however, would stunt the crop and cut yields and that might lead to a drawdown in state inventories that would trigger export curbs to ensure sufficient supplies for the country’s 1.4 billion people.

Why is India so crucial for global rice supplies?

India’s rice exports touched a record 21.5 million tonnes in 2021, more than the combined shipments of the world’s next four biggest exporters of the grain: Thailand, Vietnam, Pakistan and the United States.

India, the world’s biggest rice consumer after China, has a market share of more than 40% of the global rice trade.

High domestic stocks and low local prices allowed India to offer rice at deep discounts over the past two years, helping poorer nations, many in Asia and Africa, grapple with soaring wheat prices.

India exports rice to more than 150 countries, and any reduction in its shipments would fuel food inflation. The grain is a staple for more than 3 billion people, and when India banned exports in 2007, global prices shot to new peaks.

Who will suffer the most if India restricts rice exports?

Any move to restrict exports from India would hit almost every rice importing country. It would also allow rival suppliers Thailand and Vietnam to raise prices that are already more than 30% above Indian shipments.

Other than serving Asian buyers like China, Nepal, Bangladesh and the Philippines, India supplies rice to countries such as Togo, Benin, Senegal and Cameroon.

What’s the role of India’s monsoon?

India’s summer-sown rice accounts for more than 85% of the country’s annual production, which jumped to a record 129.66 million tonnes in the crop year to June 2022.

Millions of farmers start planting summer rice in June, when the monsoon lashes India. The monsoon, which delivers about 70% of India’s annual rainfall, is crucial for water-thirsty rice.

Indian farmers rely on monsoon rains to water half of the country’s farmland that lacks irrigation. In 2022, India is forecast to receive an average amount of rainfall. But since June 1, when the four-month monsoon season began, rains are 41% below average.

The rains are expected pick up by mid-June and spur the sowing of rice. Three years of average or above-average rains, and new, modern farming practices have ramped-up rice output.

Should the government worry about rice supplies?

India at present has more than sufficient stocks of rice, and local prices are lower than the state-set prices at which the government buys paddy rice from farmers.

Rice export prices are also trading near the lowest in more than five years.

Meanwhile, milled and paddy rice stocks at government granaries of 57.82 million tonnes are more than quadruple a target of 13.54 million tonnes.

Unlike for wheat, India did not see a surge in rice exports after Russia’s invasion of Ukraine in February, as the Black Sea region is not a major producer or consumer of rice.
…

Teslas with partially automated driving systems are a step closer to being recalled after the U.S. elevated its investigation into a series of crashes with parked emergency vehicles or trucks with warning signs. 

The National Highway Traffic Safety Administration said Thursday that it is upgrading the Tesla probe to an engineering analysis, a sign of increased scrutiny of the electric vehicle maker and automated systems that perform at least some driving tasks. 

Documents posted Thursday by the agency raise some serious issues about Tesla’s Autopilot system. The agency found that it’s being used in areas where its capabilities are limited, and that many drivers aren’t taking action to avoid crashes despite warnings from the vehicle. 

The probe now covers 830,000 vehicles, almost everything that the Austin, Texas, carmaker has sold in the U.S. since the start of the 2014 model year. 

NHTSA reported that it has found 16 crashes into emergency vehicles and trucks with warning signs, causing 15 injuries and one death. 

Investigators will evaluate additional data, vehicle performance and “explore the degree to which Autopilot and associated Tesla systems may exacerbate human factors or behavioral safety risks, undermining the effectiveness of the driver’s supervision,” the agency said. 

A message was left Thursday seeking comment from Tesla.

tesla 

 

An engineering analysis is the final stage of an investigation, and in most cases the NHTSA decides within a year if there should be a recall or if the probe should be closed. 

In the majority of the 16 crashes, the Teslas issued collision alerts to the drivers just before impact. Automatic emergency braking intervened to at least slow the cars in about half the cases. On average, Autopilot gave up control of the Teslas less than a second before the crash, NHTSA said in documents detailing the probe. 

NHTSA also said it’s looking into crashes involving similar patterns that did not include emergency vehicles or trucks with warning signs. 

The agency found that in many cases, drivers had their hands on the steering wheel as Tesla requires, yet they failed to take action to avoid a crash. This suggests that drivers are complying with Tesla’s monitoring system, but it doesn’t make sure they’re paying attention. 

In crashes were video is available, drivers should have seen first responder vehicles an average of eight seconds before impact, the agency wrote. 

The agency will have to decide if there is a safety defect with Autopilot before pursuing a recall. 

Investigators also wrote that a driver’s use or misuse of the driver monitoring system “or operation of a vehicle in an unintended manner does not necessarily preclude a system defect.” 

The agency document all but says Tesla’s method of making sure drivers pay attention isn’t good enough, and that it’s defective and should be recalled, said Bryant Walker Smith, a University of South Carolina law professor who studies automated vehicles. 

“It is really easy to have a hand on the wheel and be completely disengaged from driving,” he said. Monitoring a driver’s hand position is not effective because it only measures a physical position. “It is not concerned with their mental capacity, their engagement or their ability to respond,” he said. 

Similar systems from other companies such as General Motors’ Super Cruise use infrared cameras to watch a driver’s eyes or face to ensure they’re looking forward. But even these may still allow a driver to zone out, Walker Smith said. 

In total, the agency looked at 191 crashes but removed 85 of them because other drivers were involved or there wasn’t enough information to do a definite assessment. Of the remaining 106, the main cause of about one-quarter of the crashes appears to be running Autopilot in areas where it has limitations, or in conditions that can interfere with its operations. 

Other automakers limit use of their systems to limited-access divided highways. 

In a statement, NHTSA said there aren’t any vehicles available for purchase today that can drive themselves. 

“Every available vehicle requires the human driver to be in control at all times, and all state laws hold the human driver responsible for operation of their vehicles,” the agency said. 

Driver-assist systems can help avoid crashes but must be used correctly and responsibly, the agency said. 

Tesla did an online update of Autopilot software last fall to improve camera detection of emergency vehicle lights in low-light conditions. NHTSA has asked why the company didn’t do a recall. 

NHTSA began its inquiry in August of last year after a string of crashes since 2018 in which Teslas using the company’s Autopilot or Traffic Aware Cruise Control systems hit vehicles at scenes where first responders used flashing lights, flares, an illuminated arrow board, or cones warning of hazards. 

 
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U.N. economists are warning that the war in Ukraine threatens to upend last year’s recovery of foreign direct investment to pre-pandemic levels and send global investment flows spiraling downward in 2022. UNCTAD, the U.N. Conference on Trade and Development, has just launched its World Investment Report 2022. 

Multiple global crises have seriously dimmed prospects for sustaining last year’s strong recovery, which saw global FDI, or foreign direct investment, reach nearly $1.6 trillion. That is an increase of almost 70% from the exceptionally low levels during the 2020 pandemic year.

UNCTAD Secretary-General Rebeca Grynspan says climate change, the pandemic and the war in Ukraine have dramatically changed the global environment for international business in the last three months.

She says multinational corporate investors are facing a year of uncertainties.

“Global value chains are greatly disrupted, consumers are worried, and interest rates are rising. Fears of a recession are high, and rising investor uncertainty will put significant downward pressures on global foreign direct investment in 2022,” she said.

The report notes last year’s recovery benefited all regions of the world. However, developed economies fared much better than those in the developing world. It says FDI flows rose 134% in developed countries, reaching $746 billion, more than double the 2020 level.

Grynspan says multinational companies raked in record profits, mainly from booming merger and acquisition transactions.

“Overall, FDI flows to developing economies grew much more slowly than those to developed regions, but still increased by 30%. The increase was mainly the result of strong growth performance in Asia, a partial recovery in Latin America and the Caribbean, and an uptick in Africa,” she said.

The United States, China, Hong Kong, Singapore, and Canada head the list of top 10 economies for FDI inflows in 2021.

UNCTAD economists say the growth momentum generated in 2021 cannot be sustained. They say global FDI flows this year likely will move on a downward trajectory or remain flat.

They warn FDI flows to developing countries in 2022 are expected to be strongly affected by the war in Ukraine. They say the fiscal space in many countries will be significantly reduced. They add governments, especially in oil-and food-importing developing economies, will have fewer resources to spend on so-called greenfield or new projects.
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Even before the COVID-19 pandemic, Kenyan companies that unload freight ships and transport cargo faced growing competition from international shippers. Now, workers unions say unless steps are taken to protect local businesses an estimated 1,000 firms and 10,000 jobs may be lost. Juma Majanga reports from the port of Mombasa, Kenya.
Videographer: Amos Wangwa
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The OECD warned Wednesday that the world economy will pay a “hefty price” for Russia’s invasion of Ukraine as it slashed its 2022 growth forecast and projected higher inflation.

The Paris-based organization, which represents 38 mostly developed countries, is the latest institution to predict lower GDP growth due to the conflict, which has sent food and energy prices soaring.

In its latest economic outlook, the Organization for Economic Cooperation and Development said global gross domestic product would grow by 3% in 2022 — down sharply from the 4.5% estimated in December.

The OECD also doubled its forecast for inflation among its members — which range from the United States to Australia, Japan, and Latin American and European nations — to 8.5%, its highest level since 1988.

“The world is set to pay a hefty price for Russia’s war against Ukraine,” wrote the OECD’s chief economist and deputy secretary-general, Laurence Boone, adding that a “humanitarian crisis is unfolding before our eyes.”

“The extent to which growth will be lower and inflation higher will depend on how the war evolves, but it is clear the poorest will be hit hardest,” Boone said.

“The price of this war is high and will need to be shared.”

Before the war broke out, the outlook had appeared “broadly favorable” for 2022-23, with growth and inflation expected to return to normal after the devastating COVID-19 pandemic, said the OECD.

However, “the invasion of Ukraine, along with shutdowns in major cities and ports in China due to the zero-COVID policy, has generated a new set of adverse shocks,” it said.

Food shortage risk

The OECD was supposed to publish its outlook in March, but it delayed its detailed assessment until now due to uncertainty over the war. At the time, it said the conflict could cut global GDP growth by “over one percentage point.”

The World Bank revised its own figures on Tuesday, lowering its global growth forecast from 4.1% to 2.9%. The IMF cut its forecast by nearly one point to 3.6% in April.

The OECD cut its growth forecast for the United States from 3.7% to 2.5% and that of China, the world’s second biggest economy, from 5.1% to 4.4%. The eurozone’s GPD is now seen growing by 2.6% instead of 4.3% while Britain’s outlook was lowered to 3.6% from 4.7%.

The OECD noted that commodity prices had risen, hitting real income and spending, “particularly for the most vulnerable households.”

“In many emerging-market economies the risks of food shortages are high given the reliance on agricultural exports from Russia and Ukraine,” it said.

The report warned that the “effects of the war in Ukraine may be even greater than assumed”, raising as an example a scenario of Russia cutting gas supplies to Europe.

As central banks tighten their monetary policies to counter inflation, the report said sharp increases of interest rates could also hit growth more than anticipated.

COVID risk

The COVID pandemic, meanwhile, could take another turn for the worse.

“New more aggressive or contagious variants may emerge, while the application of zero-COVID policies in large economies like China has the potential to sap global demand and disrupt supply for some time to come,” the OECD said.

Faced with these challenges, governments needed to protect the most vulnerable from the economic shockwaves, it added.

In the short term, “temporary, timely and well-targeted” fiscal measures would help the poorest households, the OECD said.

Over the medium- and long-term, governments would have to invest more in clean energy and defense spending.

“The world is already paying the price for Russia’s aggression,” wrote Boone.

“The choices made by policymakers and citizens will be crucial to determining how that price will be distributed across people and countries.”
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The World Bank on Tuesday said the world is entering “a protracted period of feeble growth and elevated inflation,” as it cut global growth forecasts by 1.2% to 2.9% for 2022.

The bank added that many countries are likely to face recession.

The bank blames the COVID-19 pandemic for most of the problem and said the Russian invasion of Ukraine is also a factor.

“The danger of stagflation is considerable today,” World Bank President David Malpass wrote in the foreword to the report. “Subdued growth will likely persist throughout the decade because of weak investment in most of the world. With inflation now running at multi-decade highs in many countries and supply expected to grow slowly, there is a risk that inflation will remain higher for longer.”

The bank thinks global growth will hover around 3% in 2023 and 2024, with inflation remaining high in many economies.

Growth in the U.S., the bank said, would only be 2.5% this year, down from 5.7% last year.

Europe would also see growth of 2.5% compared to 5.4% last year, the bank predicted.

China was expected to grow 4.3% this year, down from 8.1% last year, the bank said. It blamed the country’s draconian COVID-19 lockdowns for the slowed growth.

Some information in this report comes from The Associated Press and Reuters.
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