Oil, Inflation, Ivory – OZY


Africa

African nations challenge CITES over wildlife products

Several members of the Southern African Development Community have agreed to develop a joint plan to sell wildlife products, in a clear challenge to CITES.

CITES is the Convention on International Trade in Endangered Species of Wild Fauna and Flora which came into force on July 1, 1975 to protect endangered species of wildlife. It restricts the sale of wildlife products, including a ban on the sale of ivory that has been in place since 1989.

Tight conservation budgets along with relatively robust local elephant populations and growing incidences of human-wildlife conflict in Botswana, Namibia, Tanzania, Zambia and Zimbabwe have led these countries to cry out alarm. In a statement released on the final day of last week’s Elephant Summit in Zimbabwe, representatives of these African nations called on CITES Secretariat not to interfere in the questions of “internal trade, state sovereignty and their rights to sustainable use of wildlife.” The statement also said they would report to CITES signatory countries on the cost of living with wildlife.

Meanwhile, Katto Wambua of Kenya-based wildlife conservation organization Space for Giants said any sale of ivory would allow illegal products to be mixed with legal ones, and thus effectively encourage poaching.

CITES did not respond to OZY’s request for comment.

War in Ukraine slows African growth

The African Development Bank (AfDB) expects the continent’s growth rate to slow by 2.8 percentage points to 4.1% this year, from 6.9% in 2021. At the bank’s annual meetings, AfDB said last year’s strong growth was due to easing of COVID-19 restrictions, recovering global demand and rising global commodity prices which boosted countries’ incomes oil exporters, as well as growth in domestic consumption and investment. In 2022, however, the AfDB predicts that Africa’s growth will be hampered by inflationary pressures from Russia’s invasion of Ukraine as well as low immunization rates.. (Source: AfDB)

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Americas

Biden backs Fed to slow inflation

Writing in the Wall Street Journal on Monday, President Joe Biden defended the Federal Reserve’s efforts to fight inflation. Earlier this month, the Fed approved an interest rate hike of half a percentage point to address rising prices which are particularly strong in the energy and food sectors. . The Fed also announced that it would reduce its 9 trillion dollars balance sheet to reduce liquidity and curb rising prices. Biden said his office would use available means to reduce the rising cost of living, such as statistics report published last Friday by the Ministry of Commerce suggested a slight decline in consumer spending. (Source: The Wall Street Journal)

US companies consider cost-cutting measures

The world’s largest economy is experiencing its highest inflation – 8.3% in April – in nearly four decades. Companies are expected to see higher costs in the future, and 20% of companies surveyed in May with revenues ranging from $500 million to $100 billion said they plan to cut costs to offset inflation, according to market research and advisory firm Gartner Inc. (Source: The Wall Street Journal)

Latin American beverage maker expects lower demand

Chilean beverage titan Compañía Cervecerías Unidas SA (CCU) is bracing for lower demand amid shifting economic winds. While the company’s costs have increased due to inflation, it will now have to deal with reduced consumption rates. “I expect in the second half of this year people’s consumption will be a bit more restrained,” Antonio Cruz, chief commercial officer of CCU, told Bloomberg News. Regional seller of Heineken, CCU is controlled by the wealthiest family in Chile. (Source: Bloomberg)


Europe

EU agrees to ban most Russian oil

The European Council and the European Commission have agreed to ban 90% of Russian oil imports by the end of the year. According to the BBC, European Council President Charles Michel said the deal cuts off a major source of funding for Russia’s war machine. The European bloc has also agreed to cut off Russia’s largest bank (the state-owned Sberbank) from all SWIFT transactions and will ban EU companies from providing certain business services to Russia. (Source: Bloomberg, BBC, The Wall Street Journal, European Union)

Unilever to appoint US billionaire Nelson Peltz to its board

British multinational consumer goods company Unilever Plc., maker of Hellmann’s mayonnaise and Dove soap, among many other products, is set to appoint Nelson Peltz to its board of directors to reinvigorate the company’s performance. Peltz, who previously served on the board of Procter & Gamble Co., has a 1.5% stake in Unilever through his investment firm Trian Fund Management, LP. The announcement sent Unilever’s share price up 7.7%. (Source: The Wall Street Journal, Bloomberg)


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Asia

Putin looks to India and China to make up for EU ban

Russian President Vladimir Putin may turn to India and China for help when the European Union bans most Russian oil. The European Council and European Commission agreement to ban 90% of Russian oil imports by the end of the year is expected to cost Russia up to $10 billion in lost exports a year – and leave Russia without a market for its “Urals” brand of crude oil. While Asia may be able to partially offset the EU ban, several issues stand in the way, including refining capacity, as this type of crude oil requires sophisticated processing. (Source: AlJazeera, Bloomberg)

China mocks Biden’s Indo-Pacific pact

Minister of Foreign Affairs of China Wang Yi attacked President Joe Biden and his recently announced economic and trade pact with 12 Indo-Pacific countries. “The so-called Indo-Pacific economic framework recently deployed by the United States claims to build a free, open and inclusive new order, but how can an economic framework call itself free if it does not lower tariffs? Wang said, alluding to US tariffs on Chinese products. “How can it be called inclusive if it deliberately excludes China, the biggest market in the region and the world?” (Source: Bloomberg)


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