Q1
EDITOR’S NOTE Q1 EDITION
2024
The EU’s ‘Regulation on Deforestation-free products’ (aka EUDR) came into force in June 2023, we take a look at the timelines for implementation, the differences to the EU Timber regulation that it replaces, and how this has been a key aspect of the spectacular rally in Cocoa.
Sugar, Cocoa, Chocolate, Potatoes, French Fries, Deforestation, Regulation, Weather, Unemployment, Energy, Transition, Efficiency, Hedging
Welcome to the Q1 edition of the Ghost In The Machine, as the world continues to be blighted by disruptions, national and geopolitical risks remain all too evident, above all the tragic and brutal conflicts in the Ukraine and Gaza, and yet risk appetite appears to remain robust, despite the push back on central bank rate cut timelines.
In this edition, there is a general discussion about investor sentiment towards agricultural commodities after a turbulent 2023, with a deeper dive into the Sugar market, which is looking for some direction, above all given the challenges in formulating demand estimates.
Following ADM ISI’s acquisition of DCA Finance, our new colleagues delve into the world of potatoes, be that the increasing weather-related disruptions to output, the increased demand to hedge risk and accompanying challenges, and how President Macron’s has been attempting to put the ‘French’ back into fries.
Economic data drives markets, perhaps none more so than the monthly and weekly US labour data. It is typically taken at face value, despite frequent and sometimes substantial revisions, and post-pandemic has defied widespread expectations of a sharp rise in Unemployment as interest rates have risen sharply. But does this offer a true reflection of what is actually happening in the US labour market, or do appearances deceive?
A hefty burden is being placed on improved efficiency as the energy transition gathers pace, but as the Jevons Paradox highlights, the really big political and cultural challenge lies in preserving, and not consuming these efficiency gains.
THE GHOST IN THE MACHINE
EDITORS IN CHIEF Eddie Tofpik
E:
eddie.tofpik@
admisi.com Marc Ostwald
E:
marc.ostwald@admisi.com
PRODUCTION & CIRCULATION CREATIVE DESIGN Alfred Michelin
Simrat Kaur Sounthe
MARKETING Alfred Michelin
Simrat Kaur Sounthe
ADM CONTRIBUTORS Eddie Tofpik Marc Ostwald
EXTERNAL CONTRIBUTORS Alberto Peixoto Edwin Burgers Lou Brien
© 2024 COPYRIGHT ADM INVESTOR SERVICES INTERNATIONAL LIMITED - ALL RIGHTS RESERVED
ADM Investor Services International Limited, registered in England No. 2547805, is authorised and regulated by the Financial Conduct Authority [FRN 148474] and is a member of the London Stock Exchange. Registered office: 3rd Floor, The Minster Building, 21 Mincing Lane, London EC3R 7AG. A subsidiary of Archer Daniels Midland Company. The information within this publication has been compiled for general purposes only. Although every attempt has been made to ensure the accuracy of the information, ADM Investor Services International Limited (ADMISI) assumes no responsibility for any errors or omissions and will not update it. The views in this publication reflect solely those of the authors and not necessarily those of ADMISI or its affiliated institutions. This publication and information herein should not be considered investment advice nor an offer to sell or an invitation to invest in any products mentioned by ADMISI. © 2021 ADM Investor Services International Limited.
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