In Taiwan pig country, U.S. pork decision rankles, divides families

Staff make marks on a pig on a farm in Pingtung

Ann Wang
Tue, December 15, 2020

PINGTUNG, Taiwan (Reuters) - In southern Taiwan's pig-producing heartland, the government's contentious decision to ease restrictions on imports of U.S. pork is rankling some producers and dividing families.

President Tsai Ing-wen's decision in August to allow imports of U.S. pork containing ractopamine, an additive that enhances leanness but is banned in the European Union and China, has roiled Taiwan politics.

In Taiwan's southernmost county of Pingtung, a major pork-producing area, pig farmer Wu Jung-en, 63, said he was "furious and shocked" when he heard the news.

"I'm quite worried this will make people fear pork, so maybe they won't eat it anymore. It's a terrible thing for us," Wu, who has a heard of about 10,000 hogs, told Reuters.

His 32-year-old son Wu Hung-chi, however, doesn't see it that way.

"I've told my friends that if they're scared, then go and buy warm-body pork," said the younger Wu, referring to meat that is eaten shortly after slaughter, rather than frozen.

"It's a free market. If it's no good it will be phased out. Nobody is forcing you to eat it."

That's an argument the government makes, and says its decision brings Taiwan into line with international practice. Taipei is also hoping the move eases the way for a free trade deal with Washington.

The main opposition Kuomintang party opposes the move on safety grounds, holding noisy protests and flinging pig guts in parliament on one occasion.

Pork is Taiwan's most popular meat, with the average person consuming almost 40 kg annually.

Most pork consumed in Taiwan is domestically-reared, with only around 1% currently coming from the United States.



Teng Hung-chao, a pork farmer for more than three decades who runs an agricultural sales cooperative in Pingtung, said he too was angered by the move, fearing the impact at home.

"The United States is a major pork producer that is quite competitive, so imports will be cost effective. But it can't be forced on us, bringing chaos to our industry and taking it down."

(Reporting by Ann Wang; Writing by Ben Blanchard; Editing by Lincoln Feast.)

US regulators OK genetically modified pig for food, drugs

This undated photo provided by Revivicor, Inc., a unit of United Therapeutics, shows a genetically modified pig. U.S. regulators have approved a genetically modified pig for food and medical products, making it the second such animal to get the green light for human consumption -- but United Therapeutics, the company behind it says there are no imminent plans for its meat to be sold. (Revivicor, Inc. via AP)

CANDICE CHOI
Tue, December 15, 2020, 

NEW YORK (AP) — U.S. regulators have approved a genetically modified pig for food and medical products, making it the second such animal to get the green light for human consumption. But the company behind it says there are no imminent plans to sell it for meat.

The pig is genetically engineered to eliminate the presence of alpha-gal, a type of sugar found in many mammals. The sugar makes its way into many products — including medications, cosmetics and food — and can cause allergic reactions in some people.

The main goal of the company behind the pig, United Therapeutics Corp., is to develop medical products, such as blood thinners, that won't set off such reactions, said its spokesman Dewey Steadman. Eventually, the Silver Spring, Maryland-based firm hopes to develop a way for the pig's organs to be transplanted into people.

The pig, called GalSafe, also has commercial potential as food, but Steadman said the company doesn’t know when it might be able to secure an agreement with a meat producer to process and sell it. He noted the meat allergy the pig addresses, called alpha-gal syndrome, isn't yet considered a major issue.

“It's known, but it's not well known," Steadman said.

Health researchers don't fully understand how the allergy develops, but it has been tied to bites from certain ticks. In 2009, there were 24 reported cases, but more recent estimates exceed 5,000 cases, according to a report by a working group for the U.S. Department of Health and Human Services.

Symptoms can include hives, itching, cramping and vomiting. Unlike other food allergies, alpha-gal reactions typically happen several hours after eating beef, pork or lamb, making it difficult to diagnose.

Jaydee Hanson, policy director for the Center for Food Safety, noted that meat from the genetically modified pigs wasn’t tested in people with the allergies.

“You’re offering it up as something they can eat, without knowing whether it addresses their allergy,” Hanson said.

The FDA said it didn’t evaluate allergy-specific food safety, since the company’s application didn’t include data on the preventing such reactions.

The Center for Food Safety has sued the FDA over the first genetically modified animal the agency approved for human food — salmon engineered to grow faster. The group said it's reviewing the agency's decision on the GalSafe pig posted Monday.

Greg Jaffe of the Center for Science in the Public Interest said the FDA's approval of the GalSafe pig announced Monday is also concerning because it came without a chance for public comment.

“Nobody was given notice, and all of a sudden there’s an approved animal," he said.

The company didn't disclose exactly how it altered the animal's DNA. Jaffe said the pig was produced by knocking out a gene responsible for producing the sugar and adding another that serves as a marker for the silenced gene.

Jaffe said he's not aware of any rules on how pork from genetically modified pigs would need to be labeled to be sold in supermarkets. A representative for the U.S. Department of Agriculture, which oversees meat labeling, did not immediately respond to a request for comment.

Steadman said the United Therapeutics pigs would be more difficult to produce than conventional pigs for meat because of requirements governing how they must be kept and slaughtered. He said there are about 25 GalSafe pigs at an Iowa farm.

Long term, he said the goal is to combine the genetic modification with multiple other changes to make their organs acceptable for transplants in people. For years, researchers have been looking into the idea of transplanting pig organs as a way of eliminating shortages of donated organs.

Though there aren't any plans yet to sell meat from GalSafe pigs, the genetically modified salmon could become available in the U.S. soon. AquaBounty, the company that produces the fish, says it is determining the best time to harvest the salmon, which have been growing in indoor tanks at a plant in Indiana.

___

The Associated Press Health and Science Department receives support from the Howard Hughes Medical Institute’s Department of Science Education. The AP is solely responsible for all content.

Technology beats humans at growing strawberries in Pinduoduo smart agriculture competition

Pinduoduo Inc.Tue, December 15, 2020,

Pinduoduo’s Smart Agri Competition

A member of the traditional farming teams tending to the strawberry beds at the Smart Agriculture Competition. (Source: Pinduoduo)

Pinduoduo’s Smart Agri Competition

Close-up shot of strawberries grown in automated greenhouses at the Smart Agriculture Competition (Source: Pinduoduo)

Pinduoduo’s Smart Agri Competition

Sensors deployed in the greenhouse to monitor plant growth at the Smart Agriculture Competition (Source: Pinduoduo)

Pinduoduo’s Smart Agriculture Competition took place over four months and pitted data scientists against top strawberry growers

Technology teams produced 196% more strawberries by weight on average compared with traditional farmers

Technology teams also outperformed farmers in return on investment by an average of 75.5%

SHANGHAI, China, Dec. 16, 2020 (GLOBE NEWSWIRE) -- Technology beat farmers at growing strawberries in the inaugural Smart Agriculture Competition organized by Pinduoduo Inc. (NASDAQ: PDD), China’s largest agri-focused technology platform, underscoring its potential to raise agricultural productivity and increase food security.

The four technology teams, which employed data analysis, intelligent sensors and greenhouse automation, produced an average of 6.86 kilograms of strawberries, or 196% more than the 2.32 kilograms average for the three teams of traditional growers.

The technologists also outperformed farmers in terms of return on investment by an average of 75.5%, according to the competition organizers.

CyberFarmer.HortiGraph, a team made up mostly of researchers from the China Agricultural University and National Agriculture Intelligence Equipment Engineering Technical Research Center, placed first in the competition.

The four-month competition, which ended on Nov. 30, 2020, was co-organized by Pinduoduo and the China Agricultural University, with the Food and Agriculture Organization of the United Nations as technical adviser. The contest is the first cross-disciplinary smart agriculture competition in China organized by a technology company and university to develop planting methods to raise productivity and yield.

The push into smart agriculture is part of Pinduoduo’s broader goal of helping China realize the full economic potential of its vast agriculture resources. One of the first steps in improving productivity is to raise the level of digitization across the value chain, from production to the transportation and sale of food.

Precision farming technology can help improve the crop on the production end, while agriculture analytics can cut food wastage by reducing mismatches in supply and demand. For the growers, e-commerce allows them to tap on a much larger market than the local wholesaler, freeing them from the constraints of geography.

“Technology is the force multiplier that helps both the people who grow the food and the people who eat it,” said Andre Zhu, senior vice president of Pinduoduo. “Investing in agriculture benefits the greatest number of people. We are happy to play the role of matchmaker and enabler.”

Pinduoduo will explore promoting the technology developed by the teams in the competition to working farms in China. The company operates the largest agricultural e-commerce platform in China and works with farmers from impoverished regions of the country to sell their produce to urban consumers.

In the competition, the technology teams had the advantage of being able to control temperature and humidity through greenhouse automation, the organizers noted. They were also more precise at controlling the use of water and nutrients. The traditional farmers had to achieve the same tasks by hand and experience.

CyberFarmer.HortiGraph, the winning team, employed knowledge graph technology to collect grower experience, historical cultivation data, and strawberry image recognition. This was then combined with water, fertilizer and greenhouse climate models to create an intelligent decision strategy for growing strawberries.

“This competition was a successful journey for the team to explore how technology can be used in agriculture,” said Lin Sen, the team leader for CyberFarmer.HortiGraph and a researcher based at Beijing’s National Engineering Research Center for Information Technology in Agriculture.

The Smart Agriculture Competition has inspired at least one of the technology teams to commercialize their research, showing the potential market demand for smart agriculture solutions.

Zhi Duo Mei, comprising a group of university researchers, set up a company of the same name to provide its strawberry-planting technology to farming cooperatives after receiving numerous inquiries during the competition.

"In agriculture, traditional farmers distrust data scientists, thinking they are flashy yet useless; data scientists also look down on farmers, thinking they are too old-fashioned," said Cheng Biao, the leader of the Zhi Duo Mei team. "Through this competition, we realized the importance of combining both sides' advantages and working together."

The competition helped Sun Yuqing, a member of Yanjiutian, the all-women team of farmers in the competition, change her view of technology.

“For agriculture to advance, we need new techniques, new talent,” said Sun.

About Pinduoduo Inc.

Pinduoduo operates China's largest agri-focused technology platform, providing an online marketplace that connects millions of agricultural producers with consumers across the country. A pioneer of interactive commerce and the consumer-to-manufacturer model, Pinduoduo aims to bring more businesses and people into the digital economy so that local communities can benefit from the increased productivity and convenience through new market opportunities.

For more information on Pinduoduo news and industry trends, please visit our content hub at http://stories.pinduoduo-global.com/.

For media enquiries, please contact us at internationalmedia@pinduoduo.com

Photos accompanying this announcement are available at:
https://www.globenewswire.com/NewsRoom/AttachmentNg/66c60559-d746-4515-92a7-3424819da70b
https://www.globenewswire.com/NewsRoom/AttachmentNg/290ee609-0cfb-460b-99ec-0b91a9ec6045
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Why Alibaba rival Pinduoduo is investing in agritech

Rita Liao

Wed, December 16, 2020

Back in 2018, Pinduoduo sent shock waves through the investor community when it raised $1.6 billion from a Nasdaq listing as a three-year-old company. Online shoppers in China were excited to see its rise as an alternative to long-time market dominators Alibaba and JD.com.

But the startup founded by former Google engineer Colin Huang has ambitions well beyond e-commerce. It's answering the Chinese government's call to modernize the country's agriculture and bolster the rural economy.

Life in China has become highly digital in many facets, from retail and entertainment to education and healthcare. But agriculture remains an exception. A McKinsey report from late 2017 showed that agriculture was among the least digitized industries in China. Pinduoduo saw an opportunity in the gap and started life by selling fruits online. Over time it has grown into a comprehensive e-commerce platform rivaling Alibaba, but agriculture "has always been close to the heart of Pinduoduo since its inception," said Pinduoduo's senior vice president Andre Zhu.

"Investing in smart agriculture is an extension of what we do and guided by our goal of promoting digital inclusion."

Instead of a standalone department, the firm's agricultural endeavor is a company- and even society-wide effort. Its strategy and investment team takes the lead to identify solutions targeting all stages of agriculture that the company can help scale up. At the implementation stage, the team might then tap its operational colleagues for contacts at various local governments and traditional farms that want to try the technologies.

"At least on the downstream distribution side, on e-commerce marketplaces for agricultural products, I would say we are relatively ahead compared to the rest of the world," Xin Yi Lim, executive director of sustainability and agriculture impact at Pinduoduo, told TechCrunch in an interview.

In 2019, nearly 600,000 merchants sold farm produce through Pinduoduo. That translated to some 12 million farmers who supplied their fruits and vegetables to the merchants. In August, Pinduoduo pledged to sell $145 billion worth of farm produce annually by 2025. The number was $21 billion in 2019.

"But it's really the upstream portion that we're hoping to encourage and drive further investment in," Lim added.

As such, the e-commerce giant has been traveling up the agricultural lifecycle, from building logistics infrastructure for distribution to equipping farmers with marketing know-how. In 2019, it trained close to 500,000 farm operators through its online e-commerce business institute.

Farmers in Yunnan Province learn how to open and operate a store on Pinduoduo at the Duo Duo University. / Photo: Pinduoduo

When it comes to production, Pinduoduo is able to track purchase behavior from its hundreds of millions of buyers and tell farmers what they should plant and how much they should price their products, an approach in line with the firm's larger direct-to-consumer strategy to cut traditional middlemen costs.

The e-commerce firm is also hoping to gather agronomic expertise for its farm suppliers. It kickstarted a smart farming competition this year, calling teams from around the world to grow strawberries using artificial intelligence and connected devices. They were graded on criteria such as the fruit's sweetness, energy and fertilizer use, and their AI strategy. The winner's design would then be rolled out at one of the AI-powered Duo Duo Farms, a project jointly launched by Pinduoduo and the provincial government of Yunnan to let farmers sell directly on the e-commerce platform.

These examples are just the tip of the iceberg of Pinduoduo's agricultural long game. The firm doesn't disclose exactly how much it plans to invest in the field, though Lim said "compared to some of the other players in the industry, our involvement in agriculture is definitely more comprehensive."

The company looks for investment opportunities outside China as well. While domestic players come with more affordable hardware applications, especially drones and sensors, more mature solutions around crop modeling and prediction are found in Western countries where large commercial farms prevail, Lim noted.

Agritech adoption among Pinduoduo farmers is still "relatively small" because the firm's smart farming initiative is in the early stage. But the e-commerce upstart might be well-positioned to drive the development of agritech in China.

Different from the U.S. and Australia, China is dominated by small-scale farms that often can't afford to buy advanced farming equipment. Lacking demand, agritech startups have had difficulty fundraising to subsequently invest in customer acquisition and lowering their price point, Lim explained.

"Pinduoduo can already connect [agritech startups] with a wide pool of potential customers. I think that helps to ease a little bit of the initial pain point," said Lim.

Finally, injecting technologies into farming could help retain talent in China's vast rural hinterland, which is losing young labor to bigger, more affluent cities.

"In the long term, we [could] make farming more efficient and easier. There could potentially be a transformation in the whole structure of the farming industry. We could see young people feel that 'I can actually be an entrepreneur. There are these tools that can give me more control over the output,'" Lim suggested.

"There are potentially people who today are not farmers who could then start to see farming as a viable alternative."

Pinduoduo named digital agriculture pioneer at 2020 World Digital Agriculture Conference

Pinduoduo Inc. Tue, December 15, 2020

SHANGHAI, China, Dec. 15, 2020 (GLOBE NEWSWIRE) -- Pinduoduo Inc. (NASDAQ: PDD), China’s largest agri-focused technology platform, was named a pioneer in digital agriculture at a major conference, with its “cloud agriculture” model recognized as one of the top 10 achievements in digital agriculture in the world.

The accolades were handed out at the 2020 World Digital Agriculture Conference held in Guangzhou, China, on Dec. 12. The conference aims to demonstrate the integration of digital technology and modern agriculture, and the organizing committee selected several case studies to showcase how digital technology empowers agriculture.

Pinduoduo has focused on agriculture since its establishment in 2015 and has become the go-to destination for high quality, great value agricultural products. In 2019, the transaction volume of farm products reached RMB 136.4 billion (US$20.8 billion) on Pinduoduo’s online marketplace.
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As of the end of 2019, Pinduoduo has covered almost all agricultural production areas in China, with more than 12 million agrarian producers directly connected to the marketplace serving more than 700 million consumers.

Pinduoduo has brought a systems approach to tackling the inter-related issues at various points of the agricultural value chain, committing substantial resources and investments to solve entrenched structural problems in the industry.

The company’s initiatives include improving downstream market access for farmers and training younger e-commerce talent, revamping midstream logistics infrastructure to reduce waste, lower costs and speed up the delivery of agricultural products. Pinduoduo also works with industry partners and universities to develop upstream technology to increase the resilience of the food supply chain.

Earlier this year, Pinduoduo jointly organized the Smart Agriculture Competition with the China Agricultural University, under the technical guidance of the Food and Agriculture Organization of the United Nations. The competition sought to identify cost-efficient and scalable agricultural technology that can be promoted as standardized solutions across China. The final results are expected to be released on Dec. 16, 2020.

About Pinduoduo Inc.

Pinduoduo is an innovative and fast-growing technology platform that provides buyers with value-for-money merchandise and fun and interactive shopping experiences. The Pinduoduo mobile platform offers a comprehensive selection of attractively priced merchandise, featuring a dynamic social shopping experience that leverages social networks effectively.

For more information on Pinduoduo news and industry trends, please visit our content hub at http://stories.pinduoduo-global.com

A pandemic atlas: A virus widens Israel's religious rifts

JOSEF FEDERMAN

Tue, December 15, 2020,

BNEI BRAK, Israel (AP) — When Israel went into its second nationwide coronavirus lockdown in September, most of the country quickly complied. But in some ultra-Orthodox areas, synagogues were packed, mourners thronged funerals and COVID-19 cases continued to soar.

The flouting of nationwide safety rules in ultra-Orthodox areas reinforced a popular perception that the community prioritizes faith over science and cares little about the greater good. It also has triggered a backlash that threatens to ripple throughout Israeli society for years.

“Many Israelis understand that there is a serious challenge and we cannot just sort of allow time to pass and hope that this issue will go away,” said Yohanan Plesner, president of the Israel Democracy Institute, a think tank that studies Israeli society and politics.

Over the years, the ultra-Orthodox minority has wielded outsize influence over broader Israeli society, using its kingmaker status in parliament to secure generous budgets and benefits for its people and generating resentment among the broader public.

The events of 2020 brought long-simmering tensions to a boil. Medical experts estimate the ultra-Orthodox have accounted for about one-third of the country’s coronavirus cases, despite making up just 12% of the population.

Avraham Rubenstein, mayor of the ultra-Orthodox city of Bnei Brak, calls the uproar unfair. Rubenstein has been widely praised for overseeing a successful effort to bring one of Israel’s worst coronavirus outbreaks under control in just a few weeks. He believes the anger toward the ultra-Orthodox is motivated by ignorance, animosity and hostile media coverage.

“There is a creator of the universe," he acknowledged. "We are believers. But when you go outside in Bnei Brak, the first thing you will see is people wearing masks and keeping their distance.”

Rubenstein says the lawbreakers are a tiny percentage of the ultra-Orthodox community and that the high infection rates are due to crowded conditions in his city. Ultra-Orthodox Jews live in some of Israel’s poorest cities and neighborhoods. It is common for families of eight or 10 people to be crowded together in small apartments.

Early on in the coronavirus crisis, Israel was seen as a model of success. The country moved quickly last spring to seal its borders and impose lockdown restrictions that appeared to bring the virus under control. But the reopening of the economy was mismanaged, and the virus quickly returned.

The neighboring Palestinian territories — the West Bank and the Gaza Strip — are coping with their own crises.

With a poorer population and much less advanced medical system after years of Israeli occupation, the Palestinian Authority in the West Bank has repeatedly imposed lockdown measures, devastating an already fragile economy.

The Hamas-ruled Gaza Strip, stifled by an Israeli-Egyptian blockade, did not report a single case of community-spread coronavirus until August. But the numbers have spiked since then, raising fears that its decrepit health system could collapse.

By mid-December, Israel reported 3,749 cases per 100,000 population. On the West Bank, there were 2,798 cases per 100,000 people; in Gaza, 1,327, according to the World Health Organization.

In Israel, the ultra-Orthodox were not the only ones who struggled. Israel’s Arab minority also has experienced disproportionately high infection rates, in large part because of the popular custom of holding large weddings. Young Israelis, Jewish and Arab, flocked to beaches and parties. And many middle-class Israelis have participated in mass demonstrations against Netanyahu as the economy has suffered and unemployment has soared.

Rubenstein won plaudits for bringing in a retired army general to manage the crisis last spring. His city operates numerous programs to assist the ill and their families and maintains a situation room that keeps close tabs on infections. It has enlisted hundreds of volunteers who have recovered from COVID-19, believing they are no longer contagious, to help older residents. Many people worship outdoors, and synagogues throughout the city have put up plastic sheets to keep attendees safe from one another.

Rubenstein says Israelis must understand that the ultra-Orthodox, who avoid computers and the Internet and consider religious study to be essential like “water and oxygen.” Their schools have remained open while other children study remotely. He says they must be allowed to manage things in their own way, but that doesn't mean people want to be sick or don’t consider themselves proud Israelis.

“We are an inseparable part of the country,” he said.

New and rediscovered species found in pristine Andes of Bolivia

Tue, December 15, 2020

LA PAZ (Reuters) - A scientific expedition high in the Bolivian Andes revealed 20 species new to science, including "lilliputian frog" plus four rediscovered species including the "devil-eyed frog" previously thought to be extinct, Conservation International said.

The expedition was led by the environmental group and the government of capital city La Paz. It included 17 scientists who went to the Chawi Grande, a locality belonging to the Huaylipaya indigenous community near La Paz.

"The remarkable rediscovery of species once thought extinct, especially so close to the city of La Paz, illustrates how sustainable development that embraces conservation of nature can ensure long-term protection of biodiversity," Conservation International said in a statement.

The lilliputian frog measures only about 10 millimeters in length, making it one of the smallest amphibians in the world.

"Due to their tiny size and habit of living in tunnels beneath the thick layers of moss in the cloud forest, they were difficult to find even by tracking their frequent calls," the environmental group said.

Four new butterfly species were also discovered, including two species of "metalmark butterflies", which feed on flower nectar in open areas and forest clearings.

The "devil-eyed frog, which was previously known only from a single individual observed more than 20 years ago, was found to be relatively abundant in the cloud forest," the group said.

Previous expeditions attempting to find this black frog with red eyes concluded empty-handed.

Also rediscovered was the "Alzatea verticillata," a small flowering tree that was previously known only from a single record in Bolivia and was found on this expedition after 127 years.

"Numerous expeditions had been made in Bolivia to find this mysterious tree over the years. All failed until now," Conservation International said.

Canada’s Largest Pension Says Inflation Could Rise in Rebound

Paula Sambo
Tue, December 15, 2020

(Bloomberg) -- Canada’s largest pension fund says policy measures across the globe to address the Covid-19 pandemic could fuel inflation after years of under-inflation while also spurring a rebound in employment and business investment.

“We’re keeping an eye on this because central banks have adjusted frameworks,” Mark Machin, chief executive officer of Canada Pension Plan Investment Board, said in an interview Tuesday. “There is also the risk of a wall of money in savings accounts -- $13 trillion in U.S. banks alone -- moving, and that transfer can cause inflation.”

Machin also sees the synchronized global economic upswing potentially creating further upward price pressure on commodities.


“Emerging markets are where you’re going to see a massive pickup in demand. And we’re very familiar with the infrastructure bottlenecks that exists and some economies’, especially in the Asian emerging markets, dependence on imports and commodities,” Machin said.

Another factor that could generate inflation is an uptick in infrastructure spending as a form of economic stimulus, he said.

“These things are happening because people are building the right things in the right way and there’s lots of investment happening, but you could flow through into some elements of fueling inflation, which will create challenges for some emerging markets and central banks over the time,” Machin said.

The global economic slump caused by the Covid pandemic has had a disinflationary effect, capping a decade in which the central banks of most advanced economies had already fallen short of their inflation targets. Now, the pension fund will be watching to see whether adjustments made by the central banks will spur more robust inflation as economies recover, CPPIB said in its Thinking Ahead report published Monday.

Inflation could still be held down below target levels if governments scale back plans for fiscal and monetary stimulus or if the recovery is unexpectedly weak, the board said. That would raise the risk that real interest rates remain near zero and business investment stays weak.

Widening Inequality

The overall pace of the recovery is the wild card. Machin says he doesn’t see the global economy rebounding to pre-pandemic levels before the second half of 2022.

Covid-19 will continue to be the biggest factor in the global economy in 2021, worsening the rich-poor divide, changing the pattern of trade and driving up public debt around the world, according to CPPIB.

“The pandemic has affected virtually everyone, but not equally,” it said in the report. “The economic crisis caused by the pandemic has exacerbated global inequalities, with social distancing and lockdown policies disproportionately hurting those who are more economically disadvantaged.”

For example, new immigration restrictions and an overall inability to travel for work have led to a significant loss of income for the working poor in developing countries, the pension fund said.

Machin said widening inequality could generate “a permanent scarring in the economy.”

Beyond the question of more economic stimulus, the pace of recovery will depend on how aggressively the disease continues to spread and how quickly vaccines are rolled out, the pension fund said.

Governments’ increased spending through the slowdown will probably push the global public debt-to-GDP ratio above 100%, which should be manageable for countries with control of their own monetary policies. For those without control or those that issue sovereign debt in foreign currency, “fiscal contraction over the medium term may be unavoidable as sluggish growth and high debt levels raise questions about fiscal sustainability,” the report said.

The nations that focused on testing and contact tracing and also managed to slow the spread of the virus through quarantines are in a better position to return to their pre-Covid trajectory, CPPIB says.

China Watch

The pension giant will be closely watching China’s pandemic exit strategy, it said, which could “serve as a helpful case study for policy makers in other countries.”

CPPIB expects global trade to rebound significantly next year. The pace of trade has accelerated regionally, particularly in Asia, it said, while in North America, the regional value chain linkage between the U.S. and Canada has continued to strengthen.

“Beyond 2021, more emphasis on resilience as compared to efficiency in production could reinforce tendencies towards intra-regional linkages, with both contributing to increased balkanization of international trade,” CPPIB said.

Australia Pensions Bet on Venture Capital in Record Raising Year

Matthew Burgess, Mon, December 14, 2020




(Bloomberg) -- Australia’s biggest pension funds are betting the nation’s first recession in about three decades will produce its next tech-unicorns, fueling a record year of venture capital fund raising.

AustralianSuper Pty. and Host-Plus Pty. were among investors backing Square Peg Capital Pty.’s $450 million fund, the venture capital firm said Tuesday. The Melbourne-based firm’s fourth fund adds to the best year for the Australian venture sector that’s raised at least A$1.3 billion ($980 million) in 2020, according to data compiled by Preqin and Bloomberg.

Funds managing Australia’s A$2.9 trillion in retirement savings are embracing the sector as they diversify investments to generate higher returns. As industries from health care to education get “re-imagined” from the pandemic, a boom in tech investing akin to the mid-1990s is looming, Square Peg co-founder Paul Bassat said in an interview.


“That was the best period for VC returns for the last 60-years,” said Bassat, who co-founded A$9.4 billion Seek Ltd. in that era. “The next two or three years are going to be the next best period for technology investing.”

Square Peg’s raise signals investors still favor Australia’s venture capital industry despite fears investment would slow amid the coronavirus-induced recession. Blackbird Ventures raised A$500 million from funds including Aware Super and the nation’s sovereign wealth fund in August, adding to the flood of bets on early-stage companies in Australia in the past three years.

It’s a boon for local startups too. Deal size is increasing as the some A$3.6 billion raised by local VC funds the past five years enables them to back tech unicorns through late stage funding rounds. Previously, funds like Square Peg were limited to early stage seed and series A rounds before startups sought U.S. venture firms, Bassat said.

“The worst thing is having to stand on the sidelines because you’ve run out of money,” he said.

Melbourne-based Square Peg, with $1 billion under management, is looking to back early-stage businesses tapping the massive changes brought on by Covid-19. The fund, created in 2012, is targeting companies in Australia as well as Israel and Southeast Asia and has backed tech-unicorns including Canva Pty. and cross-border financing firm Airwallex Pty.

It’s also on a hiring spree, looking for as many as four people for its investment team next year. Six of the fund’s 14-strong investment team were hired in 2020, with specialties in education, fintech and blockchain, including former Stripe Inc. executive Piruze Sabuncu as its first female investing partner, Bassat said.

To be sure, it won’t make the fund’s job any easier.

Expectations for returns are even greater after $400 million was returned to its clients this year, the bulk of which was from its first fund in 2012 at about three times their initial investment, Bassat said.

“We have to work way, way harder in the next few years to achieve those same results,” he said.

GE Released a Manifesto for Climate Change. It Involves Hydrogen.

By  Al Root Updated Dec. 15, 2020 

A wind turbine used for training and research stands outside the General Electric Co. (GE) energy plant in Greenville, South Carolina   Luke Sharrett/Bloomberg

General Electric released a kind of manifesto for climate change Tuesday. It lays out a plan to help the world dramatically cut its carbon emissions while meeting its growing demand for power. Renewable technology plays a big role, but so does natural gas and eventually even hydrogen gas.

Manifesto is a charged word. And there are some big ideas in General Electric’s (ticker: GE ) white paper even though the title is somewhat benign: “Renewables and Gas Power Can Rapidly Change the Trajectory on Climate Change.”


The 20-page report points out that electricity demand is set to rise by about 60% over the coming four decades. And the company has done some provocative math. “If you double capital spending [on renewables], invest $10 trillion by 2050, and have zero fossil fuels you are short power [generating capacity],” says Scott Strazik, CEO of GE’s Gas Power division, tells Barron’s.

Even by 2050, with huge increases in spending, GE doesn’t believe renewable technology can meet all the world’s power needs. GE isn’t saying fossil fuel is here to stay, instead they are, in one respect, arguing for the more rapid conversion of coal electricity generating capacity to natural based generating capacity.


There are a few reasons for the gas conversion strategy. The world, for starters, will still need fossil fuels even in 2050, based on the math from GE. The company does have some electricity credibility. It was founded by Thomas Edison. And GE has relationships with about 90% of the world’s electricity producers.

Natural gas is less carbon intensive than coal. That is another reason to accelerate the switch. Natural gas releases about one-third the carbon dioxide when burned as the comparable amount of coal. The reasons link back to high school chemistry. Coal is almost all carbon by weight. Natural gas is about 75% carbon by weight.

That difference matters. The global power generation industry accounts for about 40% of all emissions of carbon-dioxide—the greenhouse gas primarily blamed for global warming. That is almost 14 billion metric tons of carbon dioxide emitted by power plants each year.

GE points out that, with current strategies and policies, global emissions from power generation are likely to fall from 14 billion metric tons to 10 billion metric tons a year between now and 2050. Not bad, but that could fall even further to 6 billion metric tons with more aggressive coal to gas switching.


Coal and natural power generation technologies are fundamentally different. With coal, water is boiled and the steam turns a generator. With natural gas, a jet engine-like turbine burns gas and the hot exhaust can turn a turbine. The excess heat from the exhaust can also boil water for a steam turbine.

What’s more, gas-based power plants are typically smaller than coal plants and cheaper to build. Switching from coal to gas usually means locating a gas plant on an existing coal plant foot print and adopting the electrical infrastructure on site.

Switching has worked in the U.S. Over the past decade “power sector [emissions] dropped by one third as coal went from 50% to 25% of the capacity mix and gas went from 20% to 37%,” says Strazik. “Renewables went from 1% to 9%” over the same span.


The U.S. has had the benefit of low-price natural gas. That also helped drive the switch. Natural gas commodity prices in the U.S. have averaged, roughly, $3 per thousand cubic feet, or mcf, for the past decade, down from $6 per mcf the decade prior. Some of that benefit is now being exported to the rest of the world in the form of liquefied natural gas, or LNG.


GE doesn’t appear to be arguing for fossil fuels to protect a legacy business. The company recently announced it was exiting the new coal plant building business. It’s also a large maker of renewable generating technologies.

It believes phasing out coal faster is key to meeting global emission goals. What’s more, gas turbines can also burn hydrogen gas down the road. Some GE turbines burn hydrogen today, and hydrogen gas, of course, has no carbon in it.

Wide scale adoption of hydrogen for electricity generation is a ways off though. There isn’t enough hydrogen yet. Vic Abate, GE Chief Technology Officer, tells Barron’s hydrogen-related capital costs need to come down a lot. That doesn’t happen over night. The world has “spent three decades developing wind power,” adds Abate.

The GE Power division, which includes the gas portion Strazik runs, generated about $17.6 billion in sales over the past 12 months, down from $18.6 billion in the comparable period a year ago. In the third quarter, however, gas power sales grew 7% year over year.


Better power results have helped GE stock, but lately, for shareholders, it has been all about Covid-19. Year to date, GE stock is down about 2%, trailing behind comparable returns of the S&P 500 and Dow Jones Industrial Average. GE is a large aerospace supplier and Covid-19 has decimated demand for commercial air travel. The stock, however, has rebounded recently as the outlook for effective vaccines has become much clearer in recent weeks. GE shares are up about 76% over the past three months.

Write to Al Root at allen.root@dowjones.com

Oil Sands Win Wall Street Favor After Years in Shale Shadow

WILL WALL ST SAVE KENNEY

Robert Tuttle and Michael Bellusci
Mon, December 14, 2020, 

  

Oil Sands Win Wall Street Favor After Years in Shale Shadow



(Bloomberg) -- After years in the shadow of the U.S. shale boom, the Canadian oil sands are emerging from 2020’s historic market crash with a slew of upbeat outlooks from Wall Street equity analysts.

Morgan Stanley and Goldman Sachs Group Inc. are the latest firms to point out the industry’s ability to generate healthy cash flow next year as a reason to buy stocks like Suncor Energy Inc., Canadian Natural Resources Ltd. and MEG Energy Corp. That follows similar reports from BofA Securities and BMO Capital Markets.

“With improved cost structures and increased propensity to be capital disciplined, Canadian producers are emerging from the downturn stronger, with greater ability to generate free cash flow,” Morgan Stanley analysts Benny Wong and Adam J Gray said in a note Friday.


Among tailwinds improving the prospects for the beleaguered heavy-crude producers of northern Alberta are declining competition from Mexico and the start of construction of three pipelines, following years of insufficient shipping capacity. Prime Minister Justin Trudeau’s decision last week to narrow the scope of Canada’s new Clean Fuel Standard, by including liquid fossil fuels but leaving out solid and gaseous fuels, is also seen as a positive for the sector.

Steady output from their mines means that oil sands producers are able to keep revenue coming for decades without too much investment, while the short life span of shale wells forces U.S. explorers to constantly burn cash just to keep up production.

The eight largest oil-sands producers by market value posted a combined free cash flow of $1.4 billion for the third quarter, compared with $163.7 million from the top eight U.S. exploration and production companies, according to data compiled by Bloomberg.

Exports of Mexico’s flagship Maya heavy crude grade are forecast to decline by 70% in the next three years, helping narrow Western Canadian Select oil’s discount to New York-traded futures to $5 to $7 a barrel next year, BMO Capital Markets said in October. The price gap is currently at about $12 a barrel.

Demand for WCS has also risen after OPEC countries cut output of their heavier, higher-sulfur grades similar to those from the oil sands. Canadian oil will continue to be “well supported” in 2021, according to Goldman.

Also See: Enbridge Pipeline Linking Oil Sands to Midwest Wins Approval

To be sure, oil sands companies also face potential headwinds. Increasing numbers of banks and investors have shunned the industry because concerns over high carbon emissions. The pipelines that are under construction still face potential court delays, as well as political opposition.

Adam Waterous, chief executive officer of Calgary-based private equity firm WEF GP, is among investors expecting more profitability from the oil sands than shale. He estimates U.S. crude production will fall by about 2.5 million barrels a day in the next year as oil prices are still too low to earn attractive returns.

WEF controls two Canadian oil producers including Cona Resources Ltd., which bought Pengrowth Energy Corp. in January for about C$790 million ($620 million), including debt, and is currently embroiled in an attempted hostile takeover of Osum Oil Sands Corp.

“The best days of the U.S. oil industry are definitely behind us,” he said. “We are very bullish on Canadian oil sands where others are not.”

Becoming Green Is Not an Easy Task For Oil Companies

Exxon Mobil Corporation  has revealed its new five-year climate change plan to be in line with the Paris Agreement reduction targets.

Tue, December 15, 2020

Exxon Mobil Corporation (NYSE: XOM) has revealed its new five-year climate change plan to be in line with the Paris Agreement reduction targets. But the reaction has been muted, as these small, yet meaningful, reductions put them more in line with Chevron (NYSE: CVX), which is not exactly a leader in this either.

Nonetheless, the plan reflects the current environment for oil and gas companies. They know they will have to evolve in order to survive.

One of the main issues troubling the energy sector is low oil and natural gas price, which is caused by the massive decrease in demand. This decline was caused by the economic slowdown, triggered by the coronavirus pandemic. Unfortunately, this might not even be the biggest issue.


For years now, U.S. onshore production has been increasing. While OPEC has been decreasing production to balance the U.S. production, we still entered 2020 with more oil being produced than ever before.

And then there's the rise of renewable energy. Alternatives like solar and wind power are becoming more and more desirable than the older, carbon-based energy production. The popularity of startups in the electric vehicle industry this year is a clear sign that demand for gasoline will likely fall in the future.

Keeping in the mind the issues of the oil sector, investors' focus should be on the large well-diversified companies with strong financial positions, and both Chevron and Exxon fit that description. However, it seems that Chevron is in a comparatively better position, having overtaken Exxon as the largest U.S. oil company by market value in October. Although Chevron has taken on some additional debt, its debt-to-equity ratio only increased from 0.2 from the start of 2020 to 0.25 at the end of the third quarter. Overall, its balance sheet is stronger, so its position to keep increasing the dividend, as it already has for 33 straight years, seems firm