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China’s Jan-Feb soybean imports in 2021 fall slightly on cargo delay

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BEIJING — China’s soybean imports in the first two months of 2021 fell slightly from a year earlier, customs data showed on Sunday, as rains in top exporter Brazil slowed some shipments.
The world’s top market for soybeans brought in 13.41 million tonnes of the oilseed in January and February, down 0.8% from 13.51 million tonnes a year earlier, according to data from the General Administration of Customs.

China’s customs office releases preliminary trade data for January and February together rather than separately to smooth out distortions caused by the week-long Lunar New Year holiday, which this year was in mid-February.
Soybean imports surged to a record last year as crushers ramped up purchases on improved margins and healthy demand from the pig sector.
Chinese importers typically turned to U.S. cargoes in the fourth quarter and early months of the year when American beans dominate the market. Beijing also boosted purchases of U.S. farm products, including soybeans, to fulfill its pledge in the bilateral Phase 1 trade deal reached in January 2020.
Crushers would also start buying from Brazil early in the year as the new crop in the South American country enters the market, but rains have slowed harvest there and boosted exports of U.S. beans.
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China’s demand has helped the rebuilding of a once massive pig herd that was decimated by the deadly African swine fever disease. Recent outbreaks, however, are hurting pig production in some northern and northeastern provinces, dampening demand for soymeal, a key ingredient in feed.
Chinese crushers brought in soybeans to crush into soymeal to feed the livestock sector, and soyoil for cooking oil.
China’s imports of edible vegetable oils in the January-February period soared 48% from a year earlier to 2.04 million tonnes, amid high domestic prices and strong demand.
China’s soybean oil futures prices rallied nearly 80% from year-earlier levels, while rapeseed oil futures rose 70%. (Reporting by Hallie Gu and Ryan Woo; Editing by William Mallard)

As Greensill’s Top Client, Gupta Sees Key Cash Source Evaporate

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Bloomberg News
Eddie Spence and Irene García Pérez

Publishing date:
Mar 07, 2021  •  43 minutes ago  •  3 minute read  •  Join the conversation

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(Bloomberg) — Over the past decade, Sanjeev Gupta has built a reputation as one of the globe’s biggest boosters of steel, sealing a slew of deals for mills and smelters from Romania to Australia — while racking up billions in debt for moribund assets that few others wanted.
The former commodities trader has sketched out a vision of a greener future for steel, with his loose network of companies — GFG Alliance — leading the way. But the near-collapse of his biggest lender, Greensill Capital, has abruptly choked off a key source of funding and is threatening that pace of breakneck expansion.

Prompted by concerns over the impact of the unraveling of Lex Greensill’s trade-finance firm, Spain’s government has asked a division of Gupta’s GFG to prove it’s solvent before the company will be allowed to push ahead with a takeover of an aluminum plant, according to people familiar with the matter. Athene Holding Ltd., which is in talks to buy assets tied to Greensill, has excluded Gupta-linked assets from the deal discussions, Bloomberg News reported on March 4.
There are also signs of stress at a lender owned by Gupta’s alliance, Wyelands Bank. The Bank of England ordered Gupta to inject 75 million pounds into the business to return retail deposits after news of Greensill’s troubles, prompted by concerns about Wyelands’ business model and its links to other Gupta companies, according to a person familiar with the matter. And Greensill’s ties to Gupta have emerged as the focus of a probe at Germany’s financial regulator BaFin.

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Gupta’s travails highlight how Greensill’s fall from grace could affect the real world. Greensill’s companies were instrumental in funding the acquisitions that built Gupta’s empire. Finding replacement financing will be critical to his businesses, which employ 35,000 people in 30 countries. Gupta’s operations churned out 5 million tons of steel in 2019 and have the capacity to make more than 300,000 tons of aluminum per year for auto manufacturers, packaging producers, aerospace clients, and more.
A spokesperson for GFG Alliance said its businesses are running as normal and that the company is making progress in lining up new funding.
Though Greensill built his business in an arcane area called supply chain finance, what his company did wasn’t dramatically different from what most banks do: lending. But Greensill’s operation involved a loosely regulated area of finance working with relatively small companies that big lenders are reluctant to lend to. Gupta’s group of companies were beneficiaries of that.
In late February, Gupta was poised to close an agreement to buy Europe’s second biggest aluminum smelter, a massive facility on Spain’s northern coast owned by Alcoa Corp. And for much of the past year, Gupta was working on what would have been his most audacious acquisition ever, a takeover of the steelmaking operations of Germany’s Thyssenkrupp AG. But the Thyssenkrupp talks broke down last month as key stakeholders questioned Gupta’s ability to secure funding.

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Gupta has faced hard times in the past, an inevitability in the cyclical industries he operates in. One possible bright spot today is rising commodities prices. Since August, steel has almost tripled and aluminum is up more than 20%, driven by a rebound in industrial demand.
Still, turmoil in Gupta’s empire could have a dramatic effect on the customers, communities and countries it serves. Gupta controls companies ranging from industrial behemoths to renewable energy producers, a vast hunting estate in the Scottish Highlands, and a niche bicycle manufacturer.
France was involved in facilitating Gupta’s 2018 acquisition of Europe’s largest aluminum smelter, in the northern city of Dunkerque, from Rio Tinto Plc. And a hydroelectric station and aluminum smelter in Fort William, Scotland, that Gupta bought in 2016 for 330 million pounds is backed by a 25-year-financial guarantee from the Scottish government. The government says it has a “comprehensive security package” on the deal, but declines to disclose details, citing “commercial confidentiality.”
©2021 Bloomberg L.P.
Bloomberg.com

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China at least 30 years away from becoming manufacturing ‘great power’ -former minister

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BEIJING — China is at least 30 years away from becoming a manufacturing nation of “great power,” a former industry minister said on Sunday, despite boasting the world’s most complete industrial supply chains.
In recent years, China has become the world’s top manufacturing nation, accounting for over a third of global output, driven by domestic demand to produce everything from motor vehicles to industrial machinery. But its industries’ heavy dependence on U.S. high-tech products such as semiconductors constituted a strategic weakness.

“Basic capabilities are still weak, core technologies are in the hands of others, and the risk of ‘being hit in the throat’ and having ‘a slipped bike chain’ has significantly increased,” said Miao Wei, who was Minister of Industry and Information Technology for a decade before stepping down last year.
As the Chinese economy pivots towards a services-based model and polluting smoke-stack factories are mothballed, manufacturing output as a share of the economy has declined. In 2020, manufacturing accounted for slightly over a quarter of gross domestic product, the lowest since 2012.
“The ratio of manufacturing output to GDP has been declining too early and too quickly, which not only weighs on economic growth and affects employment, but also brings security loopholes to our industries and diminishes our economy’s ability to withstand risks, and its global competitiveness,” said Miao, now a member of the Chinese People’s Political Consultative Conference (CPPCC), the top advisory body to the government.
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President Xi Jinping said in November that innovation in the manufacturing industry is far from adequate, and firms need to tackle “bottleneck” technologies to become fully innovative.
“China’s manufacturing industry has made great achievements in recent years, but the situation of being ‘big but not strong’ and ‘comprehensive but not good’ has not been fundamentally changed,” Miao said in a speech to CPPCC delegates at the Great Hall of the People in Beijing.
There are many problems restricting the high-quality development of Chinese manufacturing, but the most fundamental one is insufficient market-oriented reforms, Miao said.
While the tax burden on companies remains heavy, and financial support on the manufacturing sector needs strengthening urgently, a shortage of innovative and high-tech talent has also significantly constrained development of the sector, Miao added.
“We must maintain our strategic resolve, stay clear-headed and deeply understand the gaps and deficiencies.” (Reporting by Stella Qiu, Ryan Woo, Hallie Gu and Yingzhi Yang; Editing by Simon Cameron-Moore and Christopher Cushing)