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Sticker Shock for Olive Oil Buyers After Bad Italian Harvest

From specialty shops in Rome to supermarkets around the world, lovers of Italian olive oil are in for some sticker shock this year, with prices due to jump by as much as 20 percent.

 

The combination of bad weather and pests hit the harvest in Southern Europe, most of all in Italy, where production is halved from last fall. That’s pushing up Italian wholesale prices by 64 percent as of mid-February compared with a year earlier, which translates to shelf price increases of 15 to 20 percent in Italy.

 

In other countries, the ultimate price increases will depend on several factors — such as how much retailers take on the costs themselves and the change in currency values. The U.S., for example, is likely to see a more modest rise in price as a stronger dollar keeps a lid on the cost of imports.

 

Italy’s harvest was especially hard hit by the combination of early rains that knocked buds off the trees and the threat of an olive fly that forced an early harvest, further cutting yields. Wholesale prices of olive oil from Spain, the world’s largest producers, are up a more modest 10 percent, with yields similar to last year’s.

 

Vincenzo Iacovissi, the owner of the Sapor d’Olio olive oil shop in Rome, says sales have dropped, though he’s tried to ease the shock for customers by explaining why prices have gone up.

 

“When there are increases of 15 to 20 percent there is some impact on sales. However, explaining the reasons for this increase has in part helped to make up for this,” Iacovissi said.

 

Italians collectively consume about 35 percent of the world’s olive oil, leading Spain at 30 percent, and that affinity makes them pretty resilient as consumers.

 

Flaminia Leoni, a 50-year-old mother of four, buys 80 to 100 liters of olive oil a year for her family and says that at most she will consider substituting lower quality olive oil for extra virgin for cooking — but not on the table, where olive oil is a staple giving accent to pasta, meats, salads and vegetables.

 

“I buy it more or less always at the same price, in truth, maybe a euro more. But I haven’t found this enormous growth in price,” she said.

 

Cedric Casanova, the owner of an Italian grocery in Paris, said he was hoping to get 30,000 liters of olive oil delivered, but received just 8,000 liters. He will have to rely on leftover stock from last year to help make up for the remaining difference — and absorb some of the price increase himself.

 

“I’m working with a standard price, by trying to assume the cost myself,” he said.

 

With global stocks down just 14 percent, no one is predicting general olive oil shortages, even with a 75 percent increase in consumption of olive oil over the last 25 years as demand pushed into non-traditional markets. The market for olive oil in the period has grown by two-fold in the United States, seven-fold in Britain and 14 fold in Japan, according to Italy’s Coldiretti farm lobby, even if continental Europe remains by far the largest market.

 

Italian olive oil is more vulnerable than that of other major producers to climate shifts and pests due to its varied topography, from hills in the north to larger groves in the south. This also lends great variety to Italian olive oil, where unique flavors are derived from a combination of the terrain, topography and the more than 400 olive varieties, according to Nicola Di Noia, an olive oil expert for the Coldiretti farm lobby.

 

“We have hundreds of different varieties of olives that are more difficult to defend compared with Spain or northern Africa, where there are big groves that are easier to manage,” Di Noia said.

 

He said the challenge is educating consumers about why they pay for quality.

 

“We need to learn to choose oils with awareness. Extra-virgin is the juice of a fruit. The primary material from which it derives is very important. Therefore, oil should be tasted and smelled,” he said.

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China’s Fight Against Air Pollution Suffers Setback

A recent recovery in steel and coal production in China has posed a challenge to the country’s war on pollution, aimed at reversing the damage done to its skies, soil and water.

As both industries represent two of the largest polluting sectors in China, some analysts are expressing concerns over their negative impact on the country’s air quality although many remain convinced that, in the long run, China will achieve its 2020 environmental targets for energy consumption and reduction of carbon and pollutant emissions, laid down in its latest five-year plan.

Rising steel output

A recent report released by Greenpeace East Asia said China’s steel industry actually saw a net increase of 36.5 million tons in operating capacity last year, despite October claims that the country had already met its 2016 reduction target of 45 million tons of steel capacity.

According to its global coal campaigner Lauri Myllyvirta, local governments in China have maneuvered to shield zombie steel mills so as to minimize the impact of the central government’s environmental policies.

Yet increasing steel capacity makes neither economic nor environmental sense as global markets are still awash with steel and northern Chinese provinces suffer from worsening smog, he added.

“There was definitely a setback in the fight against air pollution in the sense that improvements in the most polluted areas surrounding Beijing and so on [had] stalled and even reversed during the past twelve months.” Myllyvirta told VOA.

China is already the world’s largest carbon dioxide emitter, accounting for more than one-quarter of global carbon dioxide emission.

Curbs on coal

Coal-fired power plants would pose another bigger headache to worsen the country’s air quality as they are the biggest contributors to sulfur dioxide and particle emissions nationwide, according to Greenpeace.

But positive steps have been taken according to the group.

“One thing that we’ve been very concerned about is that there was still very aggressive expansion in coal-fired generating capacities in 2015 and 2016. But luckily, in the past few months, the government has taken very strong steps to suspend new projects and even stop projects that are already under construction,” Myllyvirta said.

In early January, China ordered the suspension of 103 coal power projects, nearly half of those 210 new plants approved since 2015. By doing so, China hopes to cap its coal-fired capacity below 1,100 gigawatts.

Rising coal output

After an aggressive year to reduce excess coal capacity in 2016, China has earmarked a less ambitious goal this year as authorities foresee difficulty in scaling back coal production due to rising prices and concerns over lost jobs.

The government aims to close down 500 coal mines in 2017 totaling a combined production capacity of 50 million tons, or 20 percent of last year’s 250-million-ton goal, according to the National Energy Administration (NEA) on Friday.

The NEA expected coal output will rise 5.8 percent this year to 3.65 billion tons, which will mark an end to a three-year streak in declining output, according to local media.

Duan Lei of Qinghua University’s School of Environment, found this year’s scaled-back adjustments, seen in the steel and coal sectors, “reasonable and practical” as the government needs to strike a balance between economic growth and environmental protection.

“As the economy rebounds, the environment protection ministry will have a harder time to address [the country’s] environmental concerns,” Duan said, adding that the country’s fight against air, soil and water pollution remains a huge task ahead.

Difficulty remains in shutting excess capacity with heavy industry, which is seen as an important contributor to gains in energy efficiency and reductions in carbon and air pollution.

But, polluting industries which are currently ramping up output will be in a better financial position to put down investment in order to comply with environmental standards, the professor argued.

Shift toward renewables

Both Duan and Myllyvirta are upbeat with China’s abilities to meet its 2020 environmental targets, which include an 18 percent reduction in carbon dioxide per unit of GDP and a 15 percent reduction in energy consumption per unit of GDP, as the country’s overall drive and efforts to shift to cleaner energies have been in place.

To meet the targets, China has announced 2.5 trillion yuan ($373 billion) in total investment for new installed capacity of renewable energy by 2020, which includes some $75 billion for hydropower, $104.5 billion in wind and $149.3 billion in solar.

That has represented massive business opportunities for both domestic and international green companies, although some have argued that global investors remain unwilling to put down investment due to a number of government-related risks, including China’s preference for state-owned enterprises over independent firms, its opaque legal and regulatory framework and lack of an enforceable dispute resolution system.

 

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In Trump’s Future Looms a Familiar Shutdown Threat

Add a potential government shutdown to President Donald Trump’s growing roster of headaches.

Beneath the capital’s radar looms a vexing problem — a catchall spending package that’s likely to top $1 trillion and could get embroiled in the politics of building Trump’s wall at the U.S.-Mexico border and a budget-busting Pentagon request.

 

While a shutdown deadline has a few weeks to go, the huge measure looms as an unpleasant reality check for Trump and Republicans controlling Congress.

 

Despite the big power shift in Washington, the path to success — and averting a shuttering of the government — goes directly through Senate Democrats, whose votes are required to pass the measure. And any measure that satisfies Democrats and their new leader, Sen. Chuck Schumer of New York, is sure to alienate tea party Republicans. Trump’s determination to build his wall on the U.S.-Mexico border faces a fight with Democrats, too.

 

For now, the new Democratic leader is cautious.

 

“We’ll have to wait and see what happens,” Schumer said. “I hope they won’t jam up the supplemental [spending bill] with poison pills.”

 

At issue is the annual must-do legislation funding government agencies and departments. The path for the huge spending measure — by Republicans’ own choice a piece of leftover business from last year — would be difficult and complicated in a smoothly running Washington. But partisanship has engulfed the city, and the upcoming measure is made even more challenging once upcoming Trump requests for $18 billion or more for the Pentagon and money for his contentious border wall are added to the mix.

 

For years, Republicans needed President Barack Obama’s signoff and relied on Democratic votes to pass the measures and balance out opposition from tea partyers.

 

Trump’s election has shifted the balance of power in Washington, but the GOP’s grip on the Senate — where 60 votes are needed for most legislation — is actually weaker. Some House conservatives are demanding a round of budget cuts to “offset” new spending on the Pentagon and Trump’s wall.

 

“If all of a sudden we’re not worried about pay-fors for our spending, then we have been hypocrites,” said tea party Rep. Raul Labrador, R-Idaho. “I’m not going to vote for anything that just increases spending without looking for a way to pay for that in the future.”

 

That’s far easier said than done, especially with the budget year nearly half over. Democrats might accept the Pentagon funding — aimed at reversing what Pentagon hawks see as a slide in the military’s ability to prepare against new threats — even though it would unravel a hard-won 2015 budget pact. But they won’t stand for cuts to domestic programs to pay for it, and neither will more pragmatic Republicans.

 

“I don’t think we’d be able to jam anything through that didn’t have some significant buy-in by Democrats,” Sen. Roy Blunt, R-Mo., said.

 

Lawmakers face an April 28 deadline, which seems like plenty of time. The administration, however, is off to a slow start, just last Wednesday winning Senate confirmation of its budget director, Mick Mulvaney, who has his hands full with Trump’s broader budget submission for the upcoming year as well as plans for the supplemental Pentagon spending or the border wall

 

It’s all complicated by the tumult surrounding Trump’s presidency, including his low approval ratings and vehement opposition from rank-and-file Democrats still stinging from Trump’s upset victory and his provocative travel ban.

 

GOP leaders like House Speaker Paul Ryan of Wisconsin are eager to avert any shutdown. The most recent one, caused by House Republicans, came as tea party lawmakers insisted on a failed strategy of using shutdown threats as leverage to try to block implementation of Obama’s health care law.

 

An end-of-April shutdown still seems unlikely. Neither Republicans nor Democrats want that. But a stumble is possible if Senate Democrats filibuster the measure over budget additions like the border wall with Mexico.

 

And in the House, dysfunction is always possible, especially if conservatives shun the measure as they have with previous bipartisan versions of spending bills. That led top leaders like then-Speaker John Boehner, R-Ohio, to turn to House Democratic leader Nancy Pelosi, hat in hand, to get enough votes. Now, with Trump in the White House, House Democrats can’t be counted upon to help.

 

“If they need Democratic votes, because some of their people will vote for nothing, as you well know, then we’ll have to talk,” Pelosi said. “But I fear that if they don’t need Democratic votes, the product would be something very horrible for the American people.”

 

And there’s still the Senate, where Republicans hold a 52-48 edge, short of filibuster-proof 60.

 

“So it doesn’t mean just because [Republicans] have a majority in the House, we want,” Rep. Mike Simpson, R-Idaho, said.

 

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US Marijuana Industry Anxiously Awaits New AG’s Cannabis Position

From marijuana-laced candy to body lotion infused with marijuana, this controversial plant is becoming a big business in the United States as more states make it mainstream. 

Marijuana, also known as cannabis, is now legal in 28 U.S. states for either medical or recreational use. Of those states, four of them legalized recreational marijuana last November, including California. At a dispensary in Los Angeles, the experience for customers is more similar to a trip to the winery or high-end retail store. 

There are cannabis plants on well-lit display and available for a smell test, as well as other edibles. It’s an effort to dispel pot’s stigma and normalize its use.

“It’s inevitable. Get with it,” said a customer who would only give his first name, Eric. He sees it as an herb with fewer side effects than prescription pain medicine. 

Public opinion about legalization of marijuana has shifted in its favor. The Pew Research Center finds that 57 percent of those polled support the legal use of marijuana compared to 32 percent in 2006.

The cannabis industry is also growing. In 2016, the legalized marijuana business reached close to $7 billion. That number is expected to increase to more than $21 billion in five years, according to Arcview Market Research, which describes cannabis as the “fastest growing industry in the world.” 

State vs. federal laws

Underneath the growing public support and booming industry, federal law still considers marijuana as illegal, even though state law may say otherwise. The administration of former President Barack Obama took a hands-off approach and left it up to the states to govern and prosecute the use of marijuana. 

With the new Trump administration comes uncertainty.

“The marijuana industry is definitely an industry that is in flux and part of it is because of this very complex regulatory landscape. It’s legal at the state level, it’s illegal at the federal level and there are a lot of conflicting laws,” said Daniel Yi, a spokesman for MedMen, a management company for marijuana dispensaries.

“There are areas of law [in] which we have both federal and state laws. When those laws are in direct conflict, the federal law trumps – no pun intended of course – the idea being really the supremacy clause which is a clause in the United States Constitution that makes clear that the federal law is supreme,” said constitutional law and political science expert Martin Adamian at California State University, Los Angeles.

Adamian said even though federal agents can still enforce laws at a state level, federal law does not undo the state law if they conflict, making this a gray area and often confusing to the lay person. Ultimately, it is up to each administration to set enforcement priorities.  The new Trump administration is creating uncertainty among those in the cannabis industry.

“There’s a lot of fear from those involved in the medical marijuana as well as the recreational marijuana industries. There’s a lot of fear about the uncertainty that exists. And so it may be the case that the Trump administration could decide to prosecute individuals on some level for violations of those laws,” said Adamian. 

The new attorney general, Jeff Sessions, has in the past been a critic of marijuana. In a 2016 Senate Drug Caucus hearing, Sessions, then a senator from Alabama, said, “Good people don’t smoke marijuana.”

In his Senate confirmation hearing for attorney general, Sessions was vague when answering a question from Vermont Senator Patrick Leahy.

“Would you use our federal resources to investigate and prosecute sick people who are using marijuana in accordance with their state laws even though it may violate federal law?” questioned Leahy.

“I won’t commit to never enforcing federal law, Senator Leahy, but absolutely it’s a problem of resources for the federal government,” replied Sessions.

“With enough independence and freedom to decide the direction he wants to go, somebody like Jeff Sessions may very well try to enforce federal marijuana laws which could lead to additional raids even within states that have approved marijuana use,” said Adamian.

Some players in the cannabis industry, however, are more hopeful, including Yi.

“If you go by the theory that government follows the will of the people, and the fact that the marijuana industry’s already thriving – It’s already growing and it’s functioning within the bounds of law and is showing it’s a possible industry, I think we feel pretty optimistic about the future.”

Congress is responding to the growing popularity of marijuana. Four members of Congress formed a bipartisan Cannabis Caucus to bridge the disconnect between state and federal government, and capitalize on the growing industry.

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Rania Nashar Named Saudi Arabia’s First Female Commercial Bank CEO

Rania Nashar was named chief executive of Samba Financial Group on Monday, becoming the first female CEO of a listed Saudi commercial bank in line with the government’s economic and social reforms.

Nashar is a board member of Samba’s global markets subsidiary and a Pakistani unit, and has nearly 20 years of experience in banking.

Women, banned from driving in Saudi Arabia and subject to a system of male guardianship, hold few top posts in the financial sector.

But reforms which Saudi Arabia launched last year to make the economy more efficient and less reliant on oil exports include boosting the role of women in the economy.

The Saudi Stock Exchange last week appointed its first female chair, Sarah al-Suhaimi, who became the first female chief executive of a Saudi investment bank when she took the helm of NCB Capital in 2014.

The kingdom’s top sovereign wealth fund, the Public Investment Fund, holds stakes in major companies and is at the center of restructuring the economy. It is hiring Saudi women to help manage its assets, sources familiar with its operations said.

Saudi Arabia’s reform plans aim to have women account for 30 percent of the workforce in coming years, up from the current 22 percent.

Samba is Saudi Arabia’s third-largest bank by assets.

 

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ESM Head: Greece Needs ‘Far Less’ Money Than Agreed in Third Bailout

Greece will need less in emergency loans from international lenders than originally agreed in its third bailout program due to a better-than-expected budgetary developments, the head of the eurozone bailout fund was reported on Monday as saying.

Klaus Regling told German newspaper Bild that at the end of Greece’s money-for-reforms package in August 2018, the European Stability Mechanism (ESM) will “probably have paid out far less than the agreed maximum amount of 86 billion euros” because the Greek budget was developing better than expected.

The comments came shortly before eurozone finance ministers will meet in Brussels to assess Greece’s progress in fulfilling the conditions of its bailout.

Bavarian Finance Minister Markus Soeder called for a tougher stance in negotiations with Greece, suggesting Athens should only get fresh aid from its lenders against additional collateral such as cash, gold or real estate.

“We need a plan B,” Soeder told Bild newspaper.

The review of the Greek bailout program has been beset by delays and disputes between Athens and its European Union and International Monetary Fund creditors. As disagreement has arisen over Greece’s fiscal targets, debt relief and promised reforms, fears have grown that Europe could face a new financial crisis.

Greece has said it cannot cut pensions any further as demanded by the International Monetary Fund while some of its European lenders, led by Germany, have rejected the IMF’s demand to grant it debt relief of some sort – perhaps on payments and maturity – now.

The Fund has insisted on debt relief and precautionary fiscal measures to ensure that Athens can meet its fiscal targets before it will consider participating in the bailout.

The German government, gearing up for election in September, opposes debt relief for Greece as demanded by the IMF, and says the current program can only continue if the Fund joins in.

The IMF’s participation remains unclear and this question is likely to be one of the main talking points when German Chancellor Angela Merkel and IMF Managing Director Christine Lagarde meet on Wednesday.

The IMF declined to comment on a German magazine report on Friday that it was likely to contribute up to 5 billion euros ($5.3 billion) to a third bailout package for Greece, saying its views on the deal had not shifted.

The German magazine Der Spiegel said in an unsourced report that European lenders were now expecting the IMF to contribute a sum of this size after first having hoped for 16 billion euros.

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Alibaba Extends Bricks-and mortar Retail Push With Bailian Deal

Chinese tech giant Alibaba Group Holding Ltd has formed a strategic partnership with retail conglomerate Bailian Group, extending a push into bricks-and-mortar retail as online growth slows.

The move comes on the heels of a recent purchase of a stake in retailer Suning Commerce Group Co Ltd as well as plans to take a controlling stake in Intime Retail Group Co Ltd and privatize it.

There are currently no plans for financial investment, an Alibaba spokesman said.

Shanghai-based Bailian Group is one of China’s largest retailers by sales, operating 4,700 outlets in 200 cities including supermarkets, convenience stores and pharmacies. Alibaba has an active user base of around 500 million.

Shares in Bailian Group’s subsidiaries surged on Monday, with Shanghai Bailian Group Co Ltd climbing by the 10 percent daily limit, Lianhua Supermarket Holdings Co Ltd jumping close to 10 percent and Shanghai Material Trading Co Ltd up 5 percent.

Bailian and Alibaba will initially cooperate on supply chain technology using Alibaba’s big data capabilities as well as integrating Alipay payments with Bailian Group’s existing membership program.

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New Zealand Judge Upholds Kim Dotcom Extradition Ruling

A New Zealand judge on Monday upheld an earlier court ruling that flamboyant internet entrepreneur Kim Dotcom and three of his colleagues can be extradited to the U.S. to face criminal charges.

The decision comes five years after U.S. authorities shut down Dotcom’s file-sharing website Megaupload and filed charges of conspiracy, racketeering and money laundering against the men. If found guilty, they could face decades in prison.

Dotcom, who lives in New Zealand, has been fighting extradition in a case which has moved with glacial slowness at times. And Monday’s decision won’t be the last, with the case likely to be appealed up to New Zealand’s Supreme Court, a process that could take another year or two.

U.S. prosecutors say that Megaupload raked in at least $175 million, mainly from people using it to illegally download songs, television shows and movies.

The New Zealand district court ruled in 2015 that Dotcom and the others were eligible for extradition on the charges.

High Court judge Justice Murray Gilbert found Monday that the district court made mistakes in its ruling but that those didn’t alter the big picture.

Dotcom tweeted Monday: “We won but we lost anyway.”

Dotcom’s lawyer Ron Mansfield said the high court agreed with a major part of their appeal – that copyright infringement on its own isn’t an offense that warrants extradition – but had erred in finding the men could be extradited on conspiracy grounds.

“Look, we’re disappointed it’s not all over in the high court,” Mansfield said. “But we’re one step away, as far as we’re concerned, from winning outright.”

Mansfield said they are determined to keep fighting. “There are substantial legal issues in play,” he said.

The U.S. argues that the site cost copyright holders, which included Hollywood’s major movie studios, more than $500 million. Prosecutors say intercepted communications show the men talking about being “modern-day pirates” and “evil” and that they were part of a conspiracy to profit from copyright infringement.

Dotcom argues that he can’t be held responsible for others who chose to use his site for illegal purposes, and that any case against him should have been heard in civil court.

Born in Germany as Kim Schmitz, Dotcom has long enjoyed a flamboyant lifestyle. He was arrested in New Zealand in 2012 after a dramatic police raid on his mansion.

Out on bail soon after, he released a music album, started another internet file-sharing company called Mega, and launched a political party which unsuccessfully contested the nation’s 2014 election.

In addition to Dotcom, who founded Megaupload and was its biggest shareholder, the U.S. is also seeking to extradite former Megaupload officers Mathias Ortmann, Bram van der Kolk and Finn Batato.

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IMF Approves Terms for $5 Billion Loan to Mongolia

The International Monetary Fund said Sunday that it and other partners have agreed on terms for a more than $5 billion loan package to the Mongolian government to help get the north Asian country’s economy back on track. 

 

The deal is subject to approval by the IMF’s executive board, which is expected to consider Mongolia’s request in March.

 

According to the terms agreed by the Mongolian government and IMF envoys, the IMF would provide $440 million over three years. The Asian Development Bank, World Bank, Japan and South Korea are together expected to provide up to $3 billion, and the People’s Bank of China is expected to extend its 15 billion RMB ($2 billion) swap line with the Bank of Mongolia for at least another three years, the IMF statement said. 

 

The economy of mineral-rich Mongolia has been hit hard in recent years by a sharp decline in commodity prices and a collapse in foreign direct investment. 

Adding to Mongolia’s woes is an exceptionally cold winter for the second successive year, which the Red Cross warned last week was putting the livelihoods of more than 150,000 nomadic herders and family members at risk. 

Mongolia’s national debt now stands around $23 billion, or twice the annual economic output, and a $580 million payment to foreign bondholders is due March 21.

 

The IMF statement said the loan agreement would mean Mongolia has to strengthen its banking system and adopt fiscal reforms to ensure that budget discipline is maintained. 

 

Generally, terms required by the IMF as a condition for such lending often prompt complaints in borrower countries that the conditions hurt the poor or undercut economic growth by reducing social spending or investment in public facilities. 

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