May 2015 Economic Digest - Importing and Exporting

May 2015 Edition

MUSTARD

Canada is a world leader in the production and export of mustard and Saskatchewan is responsible for 75 per cent of the country’s production. M More than a quarter of world mustard exports in 2014 originated in Saskatchewan. It is claimed that if Canadian farmers stopped using pesticides and GMOs, Canada would need another Saskatchewan, 37-million more acres, to grow the same amount of food that we do today.

DISASTERS

Some 12,700 people died as the result of natural or man-made disasters last year. Payouts from insurance companies fell by a fifth to US$35-billion but the number of natural disasters rose as thunderstorms caused damage in the US and Europe. Insured losses from storms have grown by an average of nine percent a year since 1990. The year’s biggest humanitarian disaster was caused by an earthquake in the Chinese province of Yunnan in which 731 people perished.

TRAFFIC

Traffic congestion in most major Canadian cities is getting worse according to a large GPS maker. Tom Tom’s fifth annual traffic index suggests that the average computer lost 84 hours in 2014 while delayed in traffic in Toronto, Vancouver and Montreal. Vancouver’s traffic is the worst in Canada with an overall congestion factor of 35 per cent which means an average trip would take more than a third longer than if that driver was unencumbered by traffic. During the evening rush-hour Vancouver commutes are 66 per cent longer. The main factor in Vancouver’s score is the “automatic bottlenecks” at the mouths of bridges leading to the downtown core. Istanbul topped the global ranking of 218 cities with 58 per cent overall congestion.

LUXURY

During the lunar New Year Chinese tourists thronged to Japan in record numbers. Many came home lugging a high-end Japanese luxury, a heated toilet seat complete with pulsating water jets, deodorisers and even music. Most popular was a new variety with hands-free lid opening. Chinese visitors bought more high-tech toilet seats costing around US$540 than almost any other Japanese product and some bought several including portable, battery operated ones.

SPEED

Ford is to sell a car in Europe that can read road signs and adjust its speed to ensure the vehicle is not driving too fast. The speed-limiting technology can be activated via the steering wheel and be briefly overridden by pressing firmly on the accelerator. The adjustable speed limiters use sensors mounted in a car’s wheels to detect how fast it is going. Once software detects the vehicle is at a maximum preset speed, it limits the amount of fuel that reached the engine, rather than applying the brakes. Drivers will be able to set the new system to let them speed at up to 5mph (8km/h) beyond the detected limit.

VEHICLES

The collapse in the price of oil is now impacting vehicle sales. Sales of pickups and commercial vans rose by double digits in the first two months of the year in Canada, while deliveries of more fuel-efficient entry level cars, trucks and crossovers dipped by 9 per cent. Sales of large vans soared 35 per cent and pickup trucks by nine per cent. Honda Civic has been knocked out of first place so far this year trailing the Hyundai Elantra and the Toyota Corolla.

SKYSCRAPERS

The world is in the middle of a skyscraper boom. Last year, nearly 100 buildings over 200 metres tall were built, more than ever before. This year China’s business capital will welcome the Shanghai Tower which will be the world’s second-tallest building. Saudi Arabia is building Kingdom Tower, which will be the world’s tallest (and twice the height of One World Trade Centre in New York, the tallest in the Americas).

RESOURCES

The value of Canada’s natural resource assets stood at C$744-billion in 2013, down 13 per cent from 2012.Energy resources accounted for 66 per cent of the value of all natural resource assets, followed by minerals (19%) and timber (15%), Energy resource assets consist of coal, crude bitumen, crude oil and natural gas and were valued at $494-billion. Reserves are defined by the amount of proven and probable stocks that are economical to extract using available technology.

DRONES

American farmers want the Federal Aviation Administration to relax proposed regulations on commercial drone so that the unmanned aircraft can be used over longer distances at any time of day or night. They also want to make sure farmers can register drones and qualify to fly them easily, quickly and safely. Agriculture is seen as a major beneficiary of commercial drones, which could help farmers to tend to crops more effectively as well as a range of other applications.

WINE

In South Africa, as in many other wine-producing countries, China represents the future. Squeezed by low margins and tough competition in Europe and North America, wineries are turning to a fledgling market that could expand swiftly as Chinese wealth increases and its consumer class grows. The strategy seems to be paying off as South Africa’s wine sales to China soared by 63 per cent last year. Last year, after several years of spectacular growth, China became the world’s biggest market for red wine, bolstered by the fact that red is the unofficial national colour and considered a symbol of wealth and good fortune. South Africa’s wine industry directly and indirectly employs about 290,000 people and contributes 1.2 per cent of the country’s gross domestic product.

SHOPPING

Canadians are proving to be slow to switch to online purchase-and-delivery retailing. New research indicates that online sales are expected to account for just 4.8 per cent of all retail sales in Canada in 2015. That is a paltry number compared to similar projections of 12.7 per cent in the US and 8.4 per cent across Europe. The highest rate of per-capita online spending in Canada is found in the Yukon.

AIRPORTS

The Hong Kong government has given approval for a third runway at the Asian financial centres airport, aiming to meet surging growth in passengers and air cargo. The project will begin next year and cost US$18.2-billion. About 1,600 acres of land will need to be reclaimed from the sea for the runway and a new passenger building. It is expected to be completed by 2023. Last year, the airport handled 63.4-million passengers and 4.4-million tons of cargo. It is predicted that a new runway will allow it to handle 102-million passengers and 8.9-million tons of freight a year by 2030.

RAIL

The growth in oil-train shipments fuelled by the US energy boom has stalled in recent months, dampened by safety problems and low crude prices. About 1.38-million barrels a day of oil and fuels such as gasoline rode the rails in March versus an average of 1.5-million barrels a day in the same period a year earlier. Railroads have been a major beneficiary of the US energy boom as oil companies turned to trains to move crude to refineries from remote oil fields in North Dakota and other areas not served by pipe lines. Rail shipments of oil have expanded from 20-million barrels in 2010 to just under 374-million barrels last year.

PLASTIC

Large quantities of plastic debris are building up in the Mediterranean Sea. A survey found around one thousand tonnes of plastic floating on the surface, mainly bottles, bags and wrappings. The Mediterranean Sea’s biological richness and economic importance means plastic pollution is particularly hazardous. Plastic has also been found in the stomachs of fish, birds, turtles, whales, and very tiny pieces of plastic have also been found in oysters and mussels. Scientists are saying that marine plastic pollution has spread to become a problem of planetary scale after only half a century of widespread use. Though the Mediterranean represents less than one per cent of the global ocean area, it contains between 4% and 18% of all marine species.

QUOTAS

European Union milk quotas have been scrapped after more than three decades of efforts to prevent overproduction. The system, set up in 1984, is ending so EU dairy businesses can compete with international rivals in supplying fast-growing markets in Asia and Africa .The Irish Republic, the Netherlands and Germany are all expected to increase production sharply. UK farmers are worried that it may lead to further falls in the price they receive for their milk. Belgian and other EU dairy farmers have staged protests fearing the lifting of quotas will drive small farms out of business. They argue that the lifting of quotas helps only big food companies and the largest milk producers whose efficiency allows them to operate with slim margins.

DIET

Between 2000 and 2003, the number of US children eating fast food on any given day went down, and the calories from some types of fast foods have declined as well. According to the National Health and Nutrition Examination Surveys, in 2003, almost 39 per cent of US children ate fast food on any given day. That dropped to less than 33 per cent by the 2009-2010 survey. Calorie intake from burger, pizza and chicken fast food restaurants also went down Calories from Mexican foods and sandwiches did not change though they were minor contributors to total fast food consumption.

LUGGAGE

New rankings reveal there is an airport that has not lost a passenger’s bags since it opened in 1994. Kansai International Airport in Japan has been voted the best in the world for reuniting passengers with their luggage with a remarkable zero items of baggage going missing. The study covered 550 airports in 112 nations around the world using reviews from 13-million users to decide rankings in 20 categories. Asian airports took the top six spots for baggage handling, with Copenhagen in seventh followed by Munich and Zurich.

SERVICE

British hotels are struggling to shed their reputation for poor service according to a new survey. An analysis of more than six million reviews left on the website Hotel.info found that UK hotels achieved an average score of 7.92 for service, lower than any other European country except Russia. Budapest was the best capital city for service and the top nation for courteous hotel employees was Finland with Germany, Austria Hungary and Slovakia completing the top five.

WATER

The governor of California has implemented the first mandatory water restrictions in the state’s history. The order mandates a 25 per cent reduction in water usage for cities and towns across the parched state. Vast areas of government-owned lawns will be replaced by drought-tolerant landscaping and towns will be banned from watering ornamental grass. The new order will require university campuses, cemeteries, golf courses and other large landowners to make major cuts in their water usage. Snow in the mountains is at its lowest level since records began so water supplies from melting snow will be lower than usual in the coming months.

BULBS

A light bulb made with graphene, said by its UK developer to be the first commercially viable consumer product using the super-strong carbon, is to go on sale later this year. The dimmable bulb contains a filament-shaped LED coated in graphene. It is said to cut use by 10 per cent and last longer due to its conductivity. The light bulb was developed by a Canadian-financed company. The discovery of graphene by two Russian-born scientists in the UK earned the pair the Nobel Prize for Physics. A micro-thin layer of grapheme is stronger than steel and dubbed a “wonder material” because of its potential uses.

STORES

The Benetton family has sold its controlling stake in World Duty Free to Switzerland’s Dufry. The deal creates the world’s largest travel retailer with a market share of 25 per cent and projected annual sales of US9-billion. World Duty Free operates 495 stores in 98 airports. Based in Basel Dufry has 1,650 stores in more than 60 countries with around 20,000 employees. Retail spending at airports is expected to rise in the years ahead, particularly in Asia where more than 350 new airports are set to be built.

SCRAP

A former builder in the UK who bought a 12 tonne hoard of brass doorknobs for scrap has discovered that they have been valued at nearly US$3-million He bought the 12 tonne load of fittings, including light switches, hat stands and letter boxes for around $30.000 believing that they were worth around three times that for scrap.

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