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European stock markets slump as recession fears rise

Stock markets fell in Europe after the BoE warned inflation was heading to a 40-year high of 10%, while unemployment was set to hit 5.5% by 2025.
Stock markets fell in Europe after the BoE warned inflation was heading to a 40-year high of 10%, while unemployment was set to hit 5.5% by 2025. Photo: Dominic Lipinski/PA Images via Getty
European stock markets tumbled into the red on Friday after the Bank of England (BoE) warned of a “very sharp slowdown” to come, spooking investors.
In London, the FTSE 100 (^FTSE) fell 0.8% after opening, dragged down by major consumer stocks, while the CAC (^FCHI) tumbled 0.9% in Paris and the DAX (^GDAXI) was 0.5% lower in Frankfurt.
On Thursday, Threadneedle Street hiked UK interest rates to a 13-year high of 1% to combat soaring inflation.
However, it warned that inflation was heading to a 40-year high of 10%, while unemployment was set to hit 5.5% by 2025, sending the pound slumping to two-year lows.
Across the pond, S&P 500 futures (ES=F) were down 0.4%, Dow futures (YM=F) shed 0.3%, and Nasdaq futures (NQ=F) were 0.4% lower as trade began in Europe.
The dollar continued to gain against a basket of currencies as investors across the globe shifted away from riskier assets amid fears that higher US interest rates could affect growth.
Victoria Scholar, head of investment at Interactive Investor said: “The Nasdaq slumped 5% on Thursday amid a sell-off across US markets which saw the tech-heavy index as well as the Dow post their biggest one-day drops since June 2020.
“US equities staged a sharp reversal after the Fed-driven rally in the previous session, highlighting the current market volatility which saw the VIX jump almost 23% in yesterday’s trade.”
in the consumer discretionary and tech sectors as the initial relief that Powell wasn’t planning to get more aggressive on interest rates faded.
“Reality began to set in that inflation and interest rates are both moving in an unfavourable direction for markets, which have been underpinned by cheap money for many years.”
Elsewhere, April’s US jobs report is expected to continue to show strong hiring trends given weekly jobless claims are still at levels last seen in the late 1960’s, with expectations for 380,000 jobs to be added and the unemployment rate expected to remain steady at 3.6%.
Read more: McColl’s: 16,000 jobs at risk as convenience stores stand on brink of collapse
Meanwhile, Asian shares tumbled to their lowest level in seven weeks amid concerns that China’s reinforcement of its zero-COVID policy could hit growth hard.
MSCI’s broadest index of Asia-Pacific shares outside Japan fell on the day to its lowest point since 16 March, when Chinese vice premier Liu He boosted shares by pledging to support markets and the economy.
In Hong Kong, the Hang Seng (^HSI) fell 3.7% and the Shanghai Composite (000001.SS) dipped 2.2%. In Japan, the Nikkei (^N225) bucked the trend on its return from a three-day holiday, climbing 0.7% while other key markets lagged.
The Chinese yuan also tumbled to an 18-month low in both onshore and offshore markets.

Bank of England hikes interest rates to 13-year high, sees inflation hitting 10%

The Bank of England’s Monetary Policy Committee approved a 25-basis point increase by a majority of 6-3, taking the base interest rate up to 1%.
LONDON — The Bank of England on Thursday raised interest rates to their highest level in 13 years in a bid to tackle soaring inflation.
In a widely expected move, policymakers at the BOE voted for a fourth consecutive rate hike since December at a time when millions of U.K. households are grappling with skyrocketing living costs.
The Bank’s Monetary Policy Committee approved a 25-basis point increase by a majority of 6-3, taking the base interest rate up to 1%. The Bank said the members in the minority preferred to increase interest rates by 0.5 percentage points to 1.25%.
Like many central banks around the world, the BOE is tasked with steering the economy through an inflation surge that has been exacerbated by Russia’s unprovoked onslaught in Ukraine.
Annual U.K. inflation hit a 30-year high of 7% in March — more than three times the BOE’s target level — as food and energy prices continue to surge. U.K. consumer confidence, meanwhile, plunged to a near record low in April amid fears of slowing economic growth.
The Bank expects U.K. inflation to rise to roughly 10% this year as a result of the Russia-Ukraine war and lockdowns in China. It has also warned prices are likely to rise faster than income for many people, deepening the cost of living crisis.
Sterling hit a low of 1.2393 against the dollar on Thursday afternoon London time, the lowest level since Jul. 1, 2020. The U.K. currency was last seen trading at $1.2405, down more than 1.7%.
“Global inflationary pressures have intensified sharply following Russia’s invasion of Ukraine,” the Bank’s MPC said. “This has led to a material deterioration in the outlook for world and UK growth.”
‘A very narrow path’
“The point being is we are walking this very narrow path now,” Governor Andrew Bailey said at a press conference when asked why the Bank had taken its decision to raise rates.
“The proximate reason for raising [the] bank rate at this point is not only the current profile of inflation and what is to come and of course what that could mean for inflation expectations to come — but the risks as well,” Bailey said.
The BOE chief had previously said the Bank may look to take a more incremental approach to tightening rather than following the U.S. Federal Reserve with a 50-basis point hike.
The U.S. central bank on Wednesday raised its benchmark interest rate to a target rate range of between 0.75% and 1%. It marked the Fed’s biggest rate hike in two decades and its most aggressive step yet in its fight against a 40-year high in inflation.
In its updated forecasts, the Bank highlighted the looming recession risk for the world’s fifth-largest economy. The BOE said it now expects gross domestic product to contract in the final three months of the year, partly reflecting the projected large hike in household energy bills in October.
It is at this time that the Bank also sees U.K. inflation reaching its peak of 10.2% — the highest level since 1982.
“UK GDP growth is expected to slow sharply over the first half of the forecast period,” the Bank said. “That predominantly reflects the significant adverse impact of the sharp rises in global energy and tradable goods prices on most UK households’ real incomes and many UK companies’ profit margins.”
‘Autopilot mode’
“The combination of slower growth and higher inflation is a challenge for many policymakers, and is reflected in today’s split vote,” said Hussain Mehdi, macro and investment strategist at HSBC Asset Management.
“However, with inflation set to remain higher for longer in 2022, MPC policy tightening remains in autopilot mode amid concerns over second round effects from tight labour markets,” Mehdi said.
“Looking ahead, energy prices and China lockdowns are key risk factors, but scope for inflation to cool later this year and the impact of a significant household income squeeze on growth could eventually push the bank on a more dovish path,” they added.
“In my view, the combination of the pandemic and Brexit has changed the fundamentals of the UK economy – particularly its ability to generate persistent inflation,” said Karen Ward, chief EMEA market strategist at JPMorgan Asset Management.
“The Bank will have to keep raising rates to bring inflation down, but a gradual approach, as taken today, is understandable given the nature of the current risks,” Ward said.
“If post-pandemic pent-up demand continues to overwhelm the headwind of higher prices, then demand will remain resilient. In which case the BoE still has some way to go in this hiking cycle.” – cnbc.com

Fed raises rates by half a percentage point — the biggest hike in two decades 

Fed Chairman Jerome Powell underlined the commitment to bringing inflation down but indicated that raising rates by 75 basis points at a time “is not something the committee is actively considering.”
WASHINGTON — The Federal Reserve on Wednesday raised its benchmark interest rate by half a percentage point as the most aggressive step yet in its battle against generational highs in inflation.
“Inflation is much too high and we understand the hardship it is causing, we’re moving expeditiously to bring it back down,” Fed Chairman Jerome Powell said during a news conference which he started by saying he wanted to “directly address the American people.” He later noted the burden of inflation on lower-income people, saying, “we’re strongly committed to restoring price stability.”
That likely will mean, according to the chairman’s comments, multiple 50-basis-point rate hikes ahead though nothing more aggressive than that.
Along with the move higher in rates, the central bank indicated it will begin reducing asset holdings on its $9 trillion balance sheet. The Fed had been buying bonds to keep interest rates low and money flowing through the economy, but the surge in prices has necessitated a dramatic rethink in monetary policy.
Markets were prepared for both moves but nonetheless have been volatile throughout the year. Investors have relied on the Fed as an active partner in making sure markets function well, but the inflation surge has necessitated tightening.
Wednesday’s rate hike will push the federal funds rate to a range of 0.75%-1%, and current market pricing has the rate rising to 3%-3.25% by year’s end, according to CME Group data.
Stocks rose following the announcement while Treasury yields backed off their earlier highs.
Markets now expect the central bank to continue raising rates aggressively in the coming months. Powell, said only that moves of 50 basis points “should be on the table at the next couple of meetings” but he seemed to discount the likelihood of the Fed getting more aggressive.
“Seventy-five basis points is not something the committee is actively considering,” Powell said, despite market pricing that had leaned heavily towards the Fed hiking by three-quarters of a percentage point in June.
“The American economy is very strong and well-positioned to handle tighter monetary policy,” he said, adding that he foresees a “soft or softish” landing for the economy despite the tightening.
The plan outlined Wednesday will see the balance sheet reduction happen in phases as the Fed will allow a capped level of proceeds from maturing bonds to roll off each month while reinvesting the rest. Starting June 1, the plan will see $30 billion of Treasurys and $17.5 billion on mortgage-backed securities roll off. After three months, the cap for Treasurys will increase to $60 billion and $35 billion for mortgages.
Those numbers were mostly in line with discussions at the last Fed meeting as described in minutes from the session, though there were some expectations that the increase in the caps would be more gradual.
Wednesday’s statement noted that economic activity “edged down in the first quarter” but noted that “household spending and business fixed investment remained strong.” Inflation “remains elevated,” the statement said.
Finally, the statement addressed the Covid outbreak in China and the government’s attempts to address the situation.
“In addition, COVID-related lockdowns in China are likely to exacerbate supply chain disruptions. The Committee is highly attentive to inflation risks,” the statement said.
“No surprises on our end,” said Collin Martin, fixed income strategist at Charles Schwab. “We’re a little bit less aggressive on our expectations than the markets are. Do think another 50-basis-point increase in June seems likely. … We think inflation is close to peaking. If that shows some signs of peaking and declines later in the year, that gives the Fed a little leeway to slow down on such an aggressive pace.”
Though some Federal Open Market Committee members had pushed for bigger rate hikes, Wednesday’s move received unanimous support.
The 50-basis-point increase is the biggest hike the rate-setting FOMC has instituted since May 2000. Back then, the Fed was fighting the excesses of the early dotcom era and the internet bubble. This time around, the circumstances are quite a bit different.
As the pandemic crisis hit in early 2020, the Fed slashed its benchmark funds rate to a range of 0%-0.25% and instituted an aggressive program of bond buying that more than doubled its balance sheet to some $9 trillion. At the same time, Congress approved a series of bills that injected more than $5 trillion of fiscal spending into the economy.
Those policy moves came at a time when supply chains clogged and demand surged. Inflation over a 12-month period rose 8.5% in March, as gauged by the Bureau of Labor Statistics’ consumer price index
Fed officials for months dismissed the inflation surge as “transitory” then had to rethink that position as the pressures did not relent.
For the first time in more than three years, the FOMC in March approved a 25-basis-point increase, indicating then that the funds rate could rise to just 1.9% this year. Since then, though, multiple statements from central bankers pointed to a rate well north of that. Wednesday’s move marked the first time the Fed has boosted rates at consecutive meetings since June 2006.
Stocks have tumbled through the year, with the Dow Jones Industrial Average off nearly 9% and bond prices falling sharply as well. The benchmark 10-year Treasury yield, which moves opposite price, was around 3% Wednesday, a level it hasn’t seen since late 2018.
When the Fed was last this aggressive with rate hikes, it took the funds rate to 6.5% but was forced to retreat just seven months later. With the combination of a recession already underway plus the Sept. 11, 2001 terrorist attacks, the Fed rapidly cut, eventually slashing the funds rate all the way down to 1% by mid-2003.
Some economists worry the Fed could face the same predicament this time — failing to act on inflation when it was surging then tightening in the face of slowing growth. GDP fell 1.4% in the first quarter, though it was held back by factors such as rising Covid cases and a slowing inventory build that are expected to ease through the year. – ncbc.com

Buy now, pay later will soon affect your credit score in the UK

Currently, most buy now, pay later services don’t impact a person’s credit score. That’s now set to change in the U.K.
Buy now, pay later giant Klarna says it will start reporting data on customers’ usage of its products to credit bureaus in the U.K., gearing up for incoming regulations aimed at reining in the sector over fears it is putting young people into debt.
Starting June 1, the Swedish fintech firm will share information on whether Brits paid off an installment loan in time or are falling behind on their payments to TransUnion and Experian, meaning such data will now start to appear on their credit reports. Klarna has around 16 million users in the country.
The move will apply to the firm’s “pay in three” and “pay in 30″ services, which allow customers to pay down their debt in three months or 30 days, respectively, without accruing interest. Klarna already reports data on longer-term lending agreements ranging from six to 36 months, which do incur interest.
Klarna said customers’ credit scores won’t immediately be impacted by the change — currently, most BNPL services do not impact a person’s credit score. However, after 12 to 18 months, a person’s usage of Klarna will appear for lenders when approving a loan or mortgage application. Purchases made before June 1 won’t be affected, Klarna said.
The development sets a major precedent for the nascent buy now, pay later, or “BNPL,” sector, which has flourished in no small part thanks to a smoother application process and lack of regulatory oversight. It could deter shoppers from using the company’s services, as it will now affect their credit history.
“Credit reporting is a double-edged sword in that it can be used to punish borrowers but also to incentivise and reward healthy financial habits,” Gwera Kiwana, product manager at U.K. fintech consultancy 11:FS, told CNBC.
“Klarna reporting to credit scoring agencies could be leveraged by thin file users such as immigrants and the underbanked as a tool for credit building. That would strengthen BNPL’s offering versus high-cost credit cards, if it could give customers the chance to improve their credit score through good repayment behavior.”
BNPL companies face a reckoning in the U.K. and other countries, as regulators look to crack down on such services amid worries they are encouraging consumers — Gen Z and millennials, in particular — to spend more than they can afford.
Last year, the British government announced it would regulate BNPL products after a review found one in 10 customers of a major bank using such services had already fallen into arrears. The rules are yet to be approved, but are expected to come into effect by 2023.
In the U.S., meanwhile, the Consumer Financial Protection Bureau is investigating Klarna, Affirm and other BNPL firms over concerns they are pushing people into debt.
Klarna said that, while U.K. regulation was relevant to its decision to report data to the big credit agencies, the company had been working on the change for two years. The firm says it hopes its competitors will follow suit.
“This will give other providers the ability to see whether someone has overextended themselves using Klarna; or, equally, as other providers come on board, we’ll be able to see whether consumers have overextended themselves using those providers,” a Klarna spokesperson told CNBC.
It’s not yet clear whether rival firms PayPal or Clearpay — which is now owned by Square parent company Block — plan to announce similar steps. The companies were not immediately available for comment when contacted by CNBC.
Klarna has often railed against the credit card industry for landing shoppers with burdensome interest and late payment fees.
“It is alarming that U.K. consumers are still being forced to take out high cost credit cards to demonstrate they can use credit responsibly and build their credit profile,” Alex Marsh, Klarna’s U.K. boss, said in a statement Wednesday.
“That will start to change on 1 June this year as the vast majority of the 16 million U.K. consumers who make Klarna BNPL payments in full and on time will be able to demonstrate their responsible use of credit to other lenders.” – cnbc.com

Abortion ruling: US Supreme Court says leak is real

Rival campaigners in Washington
A leaked document suggesting millions of US women could lose the legal right to abortion is genuine, the Supreme Court’s chief justice has confirmed.
But it does not represent the court’s final decision, said John Roberts.
The leak has stirred expectations that the 1973 decision which legalised abortion in the US could be overturned, allowing individual states to ban it.
President Joe Biden has argued that the decision – if it goes ahead – could call other freedoms into question.
The leaked document – labelled “1st Draft” – appears to reflect the majority opinion of the court.
Written by Justice Samuel Alito, it calls the 1973 Roe v Wade ruling – which legalised abortion across the US – “egregiously wrong from the start”.
The draft is not a final ruling, and opinions could change. But if Roe v Wade is overturned, around half of US states could ban abortion.
In a statement, Chief Justice Roberts described the leak of the draft – first published by US website Politico – as “a singular and egregious breach” and asked the Marshal of the Supreme Court to launch an investigation.
The work of the court would “not be affected in any way”, he added.
The draft’s release has caused a wave of reaction from both sides. Anti-abortion law firm Americans United for Life urged the court to disregard “the expectations of pro-abortion activists or proxy media allies”.
Planned Parenthood – the largest provider of reproductive health services in the US – has said it would “continue to fight like hell to protect the right to access safe, legal abortion”.
It says its research found that 36 million women could lose abortion access if Roe v Wade were struck down.
The ruling is in the court’s sights because Mississippi is asking for it to be overturned, with a final decision expected in late June or early July.
Thirteen states have already passed so-called trigger laws that will automatically ban abortion if Roe is overruled this summer. A number of others would be likely to pass laws quickly.
President Joe Biden warned that such a change – if the decision stays the same – would have far-reaching implications.
“It concerns me a great deal that we’re going to, after 50 years, decide a woman does not have a right to choose,” he said.
“But even more, equally profound is the rationale used. It would mean that every other decision relating to the notion of privacy is thrown into question.”
Mr Biden said he wanted legislation to enshrine the existing guarantees of abortion access.
“If it becomes the law, and if what is written remains, it goes far beyond the concern of whether or not there is the right to choose,” he said.
“It goes to other basic rights – the right to marriage, the right to determine a whole range of things.”
BBC North America reporter Anthony Zurcher says the basis for this lies in distinctions drawn by Justice Samuel Alito in the leaked opinion, which he wrote.
Some rights are spelt out in the US Constitution, the judge wrote, while others, such as access to abortion, are mere “unenumerated rights”.
Our reporter points out that the same argument could be used in the case of gay marriage, in vitro fertilisation or certain forms of contraception.

Serbia eyes Kenya with wheat exports to bridge local gap

Narok is one of the counties to be hit hard by a dry spell.
Serbia is seeking to export at least 150,000 tonnes of wheat to Kenya to bridge the gap left by Russia and Ukraine in the wake of a war between the two countries.
Serbian ambassador to Kenya Dargan Zupanjevac says the country has had talks with millers and the Eastern Africa Grain Council (EAGC) for them to export the grain to Kenya and forestall an expected supply crisis.
Serbia is one of the top wheat producers in the world ranking among the top 50 countries in terms of yields per year.
“We want to see if Serbia can step in to fill the supplies from Russia and Ukraine by exporting wheat to Kenya to avoid a supply crisis that Kenya could face in the coming months,” said Mr Zupanjevac.
Serbia in March announced a temporary ban on exports of wheat and other commodities, with Kenya likely to benefit once the restrictions are lifted.
Kenya relies on wheat from Ukraine and Russia, importing a third of all the produce required to meet the local needs.
Currently, local millers are hardly accessing wheat from the Black Sea following the closure of ports along this shipping corridor due to the Russia-Ukraine war. Last month, they asked the government to lift the ban on imports from India, which they termed an alternative market.
Several countries are searching for alternative source markets following the current impasse in eastern Europe. Tanzania and Uganda have indicated that they would import the grain from India to cater to their local needs.
Millers have said their stocks would run up to August before they bring in grain, adding that the prices are likely to go up because of the expensive crop in the market.
“The new crop we are ordering will be expensive because of the current global price. What we are selling is from the stock that we had ordered before the Ukraine-Russia crisis,” said Rajan Shah, chief executive at Capwell Industries.
The price of a two-kilo packet of wheat flour has hit a high of Sh180 from Sh130 on the shortage locally, with millers warning that the supply will deteriorate in the coming months if the situation does not improve. – businessdailyafrica.com

Full list of 46 independent presidential aspirants seeking to succeed Uhuru

Felix Kiprono, Nixon Kukubo, Reuben Kigame and Eliud Muthiora.
The Registrar of Political Parties has cleared a record 46 Kenyans as independent candidates in the August General Election, even as major political parties plot spirited fights against politicians going it alone.
Here’s the full list:
Kenyans cleared to run for President as independents
They were cleared by the Registrar of Political Parties.
Surname Other Names
KINYANJUI EDWARD NJENGA
OTIENO DUNCAN ODUOR
IRUNGU JAMES KAMAU
JEREMIAH NIXON KUKUBO
AOKO BENARD ONGIR
MUNGA DAVID CHOME
KARIARA ELIUD MUTHIORA
OUMA PIGBIN ODIMWENGU
WANYANGA GEOFFREY NDUNGU
AWUONDA BRIAN OLUOCH
KIHUHA ESTHER WARINGA
NGIGI FAITH WAIRIMU
KINGORI PATRICK KARIUKI
NYAGA JEREMIAH JOHN MWANIKI
NG’ANG’A GIBSON NGARUIYA
KATONI BENJAMIN KEVIN NDAMBUKI
ODHIAMBO KEVIN ONYANGO
LICHETE REUBEN KIGAME
KANYA JOE STANLEY KAMAU.B
GITHII DAVID MUHIA
KATHAE PETER NDONGA
MBUGUA BENSON MWAURA
MWARANIA PAUL MURIUNGI
NYAGOKO JACOB OANDA
WANJIGI HARRISON NJOROGE
NZANO JARED CHULA
NGECHU MOSES GICHUKI
GICHIRA PTAH SOLOMUZI
NYANGORI DOROTHY KEMUNTO
NG’ANG’A GIBSON NGARUIYA
NG’ANI VICTOR OBOTE
AWUONDA BRIAN OLUOCH
MUKENDA JEREMIAH SIMIYU
KAMAU GEORGE MUNYOTTAH
MASIRA ERASTUS NYAMERA
OGANGA STEPHEN OWOKO
OBUNGA BERNARD NETO
KIPRONO FELIX
NZAMALU SAMUEL MWANGANGI
MBUGUA ZABLON KARANJA
KOUE GRITA MUTHONI
KAGUMBA SAMUEL KIAMBATI
OJIJO OGILLO MARK PASCAL
WAWERU JOSEPH MBUGUA
MUNYEKI JUNE JULIET
BEGUM NAZLIN
Source: nation.africa.

It’s not just Russia – China’s also contributing to higher inflation

Restrictions and tariffs imposed by China in two major commodities — fertilizer and pork — have caused prices to surge worldwide.
Russia is guilty of creating a food security crisis and higher energy prices through its war with Ukraine, but China has — under the radar — also taken actions in three areas that are exacerbating inflation worldwide, said the Peterson Institute for International Economics.
“Russia’s war in Ukraine has taken a shocking toll on the region,” wrote PIIE analysts Chad Bown and Yilin Wang. “It has also contributed to a global food crisis, as Russia is blocking vital fertilizer exports needed by farmers elsewhere, and Ukraine’s role as the breadbasket for Africa and the Middle East has been destroyed.”
“But there is another, unappreciated risk to global food security,” they wrote in a note last week.
The trouble with China is that it continues to act like a small country … they can also be beggar-thy-neighbor, with China selecting the policy that solves a domestic problem by passing along its cost to people elsewhere.
The analysts singled out restrictions and tariffs imposed by China in two major commodities — fertilizer and pork.
China’s curbs have extended beyond food. The Asian giant, one of the world’s biggest steel producers, has also slapped on restrictions on the material, the Washington-based think tank noted.
All those moves have led to higher prices elsewhere, even as they benefited China’s own people, according to the report.
“The trouble with China is that it continues to act like a small country. Its policies often have the desired effect at home — say, reducing input costs to industry or one set of Chinese farmers or by increasing returns to another,” the analysts wrote.
“But they can also be beggar-thy-neighbor, with China selecting the policy that solves a domestic problem by passing along its cost to people elsewhere,” they added.
Fertilizer
Prices of fertilizer in China and around the world started rising last year, as a result of strong demand and higher energy prices, but have since pushed even higher following the Russia-Ukraine war.
Last July, authorities ordered major Chinese firms to suspend exporting fertilizer “to ensure the supply of the domestic chemical fertilizer market,” PIIE noted. By October, as prices continued to rise, authorities started mandating additional scrutiny on exports.
The curbs have continued through this year, and are set to last till at least after the end of summer, Reuters reported.
“This combination of nontariff barriers led Chinese fertilizer exports to decline sharply. With more production kept at home, Chinese fertilizer prices leveled off and have since even started to fall,” the analysts wrote.
That was in stark contrast to the situation worldwide, where fertilizer prices continued to soar more than twice the levels seen a year earlier, the think tank said.
China’s share of global fertilizer exports was 24% for phosphates, 13% for nitrogen and 2% for potash — before the restrictions, according to PIIE.
PIIE analysts said that China’s decision to take fertilizer supplies off world markets only “pushes the problem onto others.”
When there is less fertilizer, less food is grown, and that “could hardly come at a worse time” given that the Russia-Ukraine war is already threatening global food supply, they added. Russia and Ukraine are major exporters of crops such as wheat, barley, corn and sunflower oil.
“At such a critical moment, China needs to do more — not less — to help overcome the potential humanitarian challenge likely to arise in many poor, fertilizer- and food-importing countries,” the report said.
Steel
Steel prices in China and around the world accelerated in the last couple of years as the country announced it would bring down its steel domestic production in order to meet decarbonization goals.
In order to bring down surging prices domestically, authorities last year lifted a ban on steel scrap imports. They also implemented a few rounds of export restrictions, and increased export taxes on five steel products.
By March this year, China’s steel prices were 5% lower than before the restrictions.
“But as in the case of fertilizer, these decreases came at the expense of the rest of the world, where prices outside of China remain higher,” said the PIIE analysts. “The concern is the widening of the wedge between the world and Chinese prices of steel that has emerged since January 2021.”
Pork
The story of higher pork prices globally began in 2018, when China — which then produced half the world’s pork supply — saw its hog population hit by a major outbreak of African swine fever.
That compelled the country to cull 40% of its herd, which caused its pork prices to more than double by late 2019. World prices followed suit, jumping 25% as China imported more pork and pulled supplies off markets, according to PIIE.
“China reduced the price pressure at home beginning in 2019 by tapping into imports before more recently shutting them down. These policies affected the rest of the world,” PIIE analysts wrote.
Beijing also cut tariffs on pork imports in 2020, which likely caused consumers elsewhere to suffer higher prices as a result as supply fell, said the think tank.
However, authorities raised those tariffs again this year as the swine fever problem eased.
“A potential unintended benefit will be reaped if, in the current environment of high global meat prices, China’s tariff unexpectedly frees up world supplies and helps mitigate pressure on pork prices facing consumers outside China,” the report said.

EU Plans to Court Africa to Help Replace Russian Gas Imports

(Bloomberg) — The European Union will seek to step up cooperation with African countries to help replace imports of Russian natural gas and reduce dependence on Moscow by almost two-thirds this year.
Countries in Africa, in particular in the western part of the continent, such as Nigeria, Senegal, and Angola, offer largely untapped potential for liquified natural gas, according to a draft EU document seen by Bloomberg News. The communication on external energy engagement is set to be adopted by the European Commission later this month as part of a package to implement the bloc’s plan to cut energy reliance on Moscow.
The 27-nation bloc wants to shift away from its biggest supplier after President Vladimir Putin invaded Ukraine. Its draft energy strategy also seeks to prepare the region for imports of 10 million tons of renewable hydrogen by 2030 to help replace gas from Russia, in line with the ambitious EU Green Deal to walk away from fossil fuels and reach climate neutrality by mid-century.
The EU plan to increase LNG imports by 50 billion cubic meters and boost shipments of pipeline gas from countries other than Russia by 10 billion cubic meters requires setting relationships with traditional suppliers on a new basis and extending trade to new emerging suppliers, according to the document.
Key steps include fully implementing the agreement with the U.S. for the delivery of 15 billion cubic meters of additional LNG in 2022 and around 50 billion cubic meters annually until 2030. Another target is to sign a trilateral memorandum of understanding with Egypt and Israel to boost LNG supplies to Europe by summer this year.

47 aspirants now cleared to run for President in August polls

Registrar of Political Parties Ann Nderitu.
A record 47 Kenyans have been cleared to run for President as independent candidates in the August General Election, even as major political parties plot spirited fights against politicians going it alone.
If all of them go through the final hurdle and are cleared to contest by the Independent Electoral and Boundaries Commission (IEBC), this could be Kenya’s longest presidential election ballot paper since multi-party elections in 1992.
They will face leading contenders Deputy President William Ruto and Azimio la Umoja One Kenya Coalition Party boss Raila Odinga and Safina flagbearer Jimi Wanjigi for the top job.
And it’s not just the presidential race that the number of independent candidates has shot up.
A total of 7,111 individuals are seeking to run as independents for various elective seats ahead of today’s deadline, according to a list by the Registrar of Political Parties seen by the Nation.
A breakdown of the numbers show that 104 individuals have been cleared to run for governor while another 141 are seeking to Senate seats as independent candidates. The 47 woman rep positions have attracted a total of 110 independent aspirants while the number of those gunning for the 290 parliamentary seats has hit 944. Another 5,765 have been cleared by the office to run for the 1,450 county assembly positions.
In 2017, IEBC cleared Japheth Kaluyu, Michael Wainaina and Joseph Nyagah to run for president as independent candidates.
In that election, the registrar cleared a total of 4,950 individuals but only 4,002 got the IEBC nod to feature in different ballots.
Declared war
As the number of independent candidates rise, the main political parties have declared war against their candidatures. President Kenyatta’s Jubilee Party, Mr Odinga’s Orange Democratic Movement (ODM) and Dr Ruto’s United Democratic Alliance (UDA) are among the parties that have vowed to lock out the hopefuls from eating into their strongholds.
However, some analysts see the drastic increase in the number of independent candidates as a major “indictment” on parties for conducting sham primaries.
The August 9 polls has also witnessed a drastic increase in the number of fringe parties fielding candidates. Registrar of Political Parties Anne Nderitu revealed that, out of 82 parties cleared to participate in the polls, 80 have fielded candidates.
Ms Nderitu attributed the surge to the realisation by politicians that they can run as independent candidates even after losing in the primaries.
She said most of the people seeking an independent ticket did not participate in party nominations.
“The increase is mostly because of awareness as compared to previous polls. A majority of them did not participate in the party primaries; they started applying before the primaries,” said Ms Nderitu.
Jubilee Secretary-General Jeremiah Kioni and his UDA counterpart Veronica Maina yesterday said a majority of the independents will be crushed at the ballot while suggesting that they were genuinely defeated in the party primaries.
Mr Kioni declared that Jubilee will viciously campaign against them so as to ensure they do not penetrate the ruling outfit’s perceived backyard of Mt Kenya.
“We are not going to allow independent candidates to eat into our support base; we will campaign very viciously against them because they have basically defied the management of political parties in this country,” said Mr Kioni.
He claimed that a majority of the politicians did not want to be vetted or subjected to a competitive process.
“Their decision to run as independent shows they are defiant and do not want to be answerable to anybody. There will be more independent candidates running in the polls but very few are likely to make it,” he added.
He said the party will soon begin to educate voters on why they should not back independents as they cannot “push for any agenda in the house”.
Ms Maina said those who lost in credible nominations will still lose at the ballot.
“The surge in numbers does not say anything much about the primaries because in the nominations you have 10 people competing and only one winning.”
“The nine who lose, may still choose to lose in a different way at the ballot by running as independents,” she said.
She admitted that there may be genuine cases of irregularity but was quick to point out that a majority do not just want competition at the party level.
Mr Odinga recently labelled individuals who jump ship to run as independent after losing in primaries as selfish politicians.
“Some of them applied to run on political parties but when they are subjected to nominations and lose, they decide to run as independents. Why didn’t they declare their interests in vying as independents without participating in party nominations?” he posed.
ODM Secretary-General Edwin Sifuna said the increase was not purely because of the alleged irregularities in party primaries but a sign of growing democratic space and the realisation that there are options to the ballot.
“More and more people are becoming interested in politics. In fact, a bulk of the independents did not participate in any party primaries. So the surge has nothing to do with parties,” said Mr Sifuna.
But ODM chairperson John Mbadi said the record increase should serve as a wake-up call for major parties to respond to claims of irregularities in nominations.
Mr Mbadi said claims of manipulation could be directly linked to the increase.
ODM largely issued direct tickets but also experienced technology hiccups in the primaries that were paperless. UDA also witnessed cases of destruction of poll materials as well as delays in delivery in some of the electoral areas.
“I see a possibility of more independent MPs in the next Parliament; that will be an indictment on the major political parties. What is it that we are not doing right in party primaries?” Mr Mbadiposed.
The current National Assembly has a total of 13 independent MPs. ODM lost Kisumu East constituency to Shakeel Shabbir, who is defending his seat as an independent, as well as Nyali’s seat to Mohamed Ali, now in UDA.
Jubilee lost Ainabkoi seat to William Chepkut, who lost in its primaries, as well as Meru Woman Representative Kawira Mwangaza.
Other independent MPs are John Paul Mwirigi (MP Igembe South), Patrick Wainaina of Thika Town, Turbo’s Janet Sitienei, Suna West’s Peter Masara, Mwambu Mabonga (Bumula), Kathuri Murungi (South Imenti), Zadoc Ogutu (Bomachoge Borabu), Charles Kilonzo (Yatta), Patrick Musimba (Kibwezi West). – nation.africa.