2024-09-18 06:54

CANBERRA, Sept 18 (Reuters) - Conditions in the Pacific Ocean have become more La Nina-like in recent weeks, but if the weather pattern does form, it is likely to be weak and short-lived, Australia's weather bureau said. La Nina and its opposite, El Nino, are caused by the cooling and warming of sea surface temperatures off western South America. Their development is of huge importance to global agriculture, with La Nina typically bringing more rain to Australia, Southeast Asia and India and less rain to cropping zones in the Americas, and El Nino bringing the opposite. A U.S. government forecaster this month assigned a 71% chance to a La Nina forming between September to November and said it could persist into March. Several other national weather forecasters also believe a La Nina is likely. Australia's Bureau of Meteorology has been more cautious. Its in-house climate model suggests La Nina will not develop. "While some atmospheric indicators such as pressure, cloud and trade wind patterns over the Pacific have been more La Nina-like over the past few weeks, it remains to be seen whether these conditions will be sustained," the bureau said in a report circulated on Wednesday. "It is possible a La Nina may develop in coming months but if so, it is forecast to be relatively weak (in terms of the strength of the sea surface temperature anomaly) and short-lived," it said. If a La Nina forms this year it would be the fourth since 2020, which is highly unusual given the weather pattern has historically occurred on average every three to seven years. Wet weather brought in part by La Nina led to record-breaking harvests in Australia between 2020 and 2023. The bureau said a sustained period of record and near-record high sea surface temperatures around the world was making forecasting less certain. Climate patterns like the swing between La Nina and El Nino "may not necessarily behave or evolve as they have in the past," it added. Sign up here. https://www.reuters.com/business/environment/la-nina-if-it-appears-will-likely-be-brief-australias-weather-bureau-says-2024-09-18/

2024-09-18 06:53

Campari CEO quits just months after taking role Predecessor to chair "leadership transition committee" Shares fall further after weakness in recent months MILAN, Sept 18 (Reuters) - Campari (CPRI.MI) , opens new tab CEO Matteo Fantacchiotti abruptly quit on Wednesday after only five months in charge of the Italian spirits group, with the company citing personal reasons for his departure. Shares in the Milanese company that makes the orange Aperol aperitif fell almost 6% before recovering some lost ground to stand just over 5% lower by 1130 GMT. Fantacchiotti took on the role in April, succeeding Bob Kunze-Concewitz who had been at the helm since 2007 and was a familiar figure in the industry, widely respected by investors. Kunze-Concewitz will chair a leadership transition committee including Chief Financial and Operating Officer Paolo Marchesini and the group's General Counsel and Business Development Officer Fabio Di Fede, who have been named interim co-CEOs. The committee will scout for a new CEO both internally and externally. Fantacchiotti previously served as Campari's managing director Asia Pacific before being promoted to deputy CEO last year as part of the succession process. "It has been a privilege for me to be part of Campari Group for almost five years and to lead this organization since April 2024," he said in a statement, adding it had been his decision to leave. HARD ACT TO FOLLOW Traders had last week cited comments by Fantacchiotti as driving a decline in Campari's share price after he told a financial conference that there was ongoing weakness in the spirits sector. In a note on Friday, Campari clarified that Fantacchiotti was speaking in general about the sector, especially trends in the U.S. market, with no specific reference to the group. Marco Scherer, a portfolio manager at Metzler Asset Management, said Fantacchiotti's departure raised questions and added more insecurity to an already struggling sector. Fantacchiotti took over from a "superstar" CEO at a difficult time for the industry – a challenge exacerbated by small mis-steps such as last week's, Scherer said. "This was an incredibly tough job to do and then little things added on top," he continued. Metzler invested in Campari until earlier this year, when it sold its stake amid concerns about headwinds facing the spirits industry. Campari's stock is down nearly 16% since the CEO's appointment in April. While Europe's food and beverage sector (.S600FOP) , opens new tab gained 2.8% over the last five months, Campari's rival Pernod Ricard (PERP.PA) , opens new tab fell 11% and Diageo (DGE.L) , opens new tab 9%. The group agreed last December to buy Courvoisier cognac in a $1.2 billion deal and its other brands include Espolon tequila and the Cinzano aperitifs. Campari cited "temporary headwinds" including poor weather in parts of Europe at its first first-half earnings in July, warning that its ability to grow its gross margin this year would likely be impacted. Campari, whose main shareholder is the holding company of Italy's Garavoglia family, said the financial terms of Fantacchiotti's departure were still under discussion. Sign up here. https://www.reuters.com/markets/commodities/campari-says-ceo-fantacchiotti-stepping-down-2024-09-18/

2024-09-18 06:52

People in Poland's Wroclaw work overnight on flood defences Hungary opens dam to protect city of Mosonmagyarovar Czech local authorities demand elections be postponed Pope Francis says he is praying for victims WROCLAW, Poland, Sept 18 (Reuters) - Volunteers and emergency personnel worked through the night to fortify the Polish city of Wroclaw against approaching flood waters, while Hungary opened a dam as the prime minister warned a "crucial period" was approaching. The worst floods to hit central Europe , opens new tab in at least two decades have left a trail of destruction from Romania to Poland, spreading mud and debris in towns, destroying bridges, submerging cars and leaving authorities and householders with a bill for damages that will run into billions of dollars. "A lot happened tonight," Polish Prime Minister Donald Tusk told a crisis meeting in Wroclaw. "We will need urgent information...from those places that received high water." Lines of people in Wroclaw passed sandbags to fortify river banks and to protect buildings. Authorities expect waters to peak in Wroclaw on Thursday. The Polish defence ministry said more than 14,000 soldiers had been deployed to flood-hit regions, with the armed forces using helicopters to evacuate people and strengthen flood defences, while drones monitored the situation from above. Towns to the south of Wroclaw, such as Lewin Brzeski, have already felt the full might of the floods, forcing residents to wade through the streets in waist-high water or seek refuge on the roofs of the entrances to blocks of flats. Polish Finance Minister Andrzej Domanski told the crisis meeting that 2 billion zlotys ($521 million) in funds had been secured for dealing with the effects of the floods. Tusk said there had been reports of soaring prices for many products in flood-hit areas and he did not rule out the introduction of price controls. He also said the government would pay instalments of the mortgages of people whose houses had been flooded for a year. 'TRAGIC HARDSHIPS' Pope Francis talked about the "tragic hardships" caused by the floods during his weekly general audience in St Peter's Square. "I assure everyone of my closeness, praying especially for those who have lost their lives and their families." In Hungary, authorities opened a dam in the country's northwest to channel water from the Lajta river into an emergency reservoir in a bid to protect the city of Mosonmagyarovar. The water was allowed to flow onto agricultural land. In the capital Budapest, the Danube is still expected to peak around or slightly above 8.5 metres, likely on Friday or Saturday. "Due to heavy rains and floods, the situation is critical all across Central Europe," Hungarian Prime Minister Viktor Orban said in a post on social media platform X late on Tuesday. "According to the latest forecasts, the crucial period for Hungary will begin tomorrow (Wednesday), so flood protection is going full steam ahead." Drone footage from Tuesday showed the Hungarian village of Venek, near Gyor in the north of the country, submerged under water. "I think it's kind of connected to the climate change because it's a sudden flood," said 51 year-old resident Georg Bercsanyi. In the Czech Republic, water levels were mostly receding, but rivers were still peaking in some parts of southern Bohemia. Finance Minister Zbynek Stanjura said on Tuesday he would like parliament to approve an amendment to the budget to make room for flood relief, even though the cost of the damage is still not known. Stanjura said it could perhaps be in the order of $4 billion. Mayors of some Czech towns in the Opava river area demanded that this weekend's elections for regional assemblies and one third of the upper house of parliament be postponed due to a lack of power and flooding of polling stations. However, the government has decided to carry on with the vote, saying that makeshift voting stations and other improvised solutions would be used. ($1 = 3.8385 zlotys) Sign up here. https://www.reuters.com/world/europe/more-areas-central-europe-race-against-time-floods-approach-2024-09-18/

2024-09-18 06:46

DUBAI, Sept 18 (Reuters) - Saudi Basic Industries Corp (SABIC) (2010.SE) , opens new tab, one of the world's biggest petrochemicals companies, said on Wednesday it will sell its minority stake in Aluminium Bahrain (Alba) (ALBH.BH) , opens new tab to Saudi mining firm Ma'aden for around $1 billion. The sale proceeds from the 20.62% stake are expected between 363 and 398 million Bahraini dinars ($963.25 million-$1.06 billion), SABIC said in a stock exchange filing. The proceeds will be used to help SABIC's growth in chemicals. "This transaction is in line with the company's priorities of optimizing its portfolio and focusing on its core business to drive improved returns and reallocate capital towards higher margin opportunities, and to be the preferred world leader in chemicals," SABIC said. Alba has a market capitalisation of nearly $4.8 billion, according to LSEG. ($1 = 0.3769 Bahraini dinars) Sign up here. https://www.reuters.com/markets/deals/sabic-sell-its-stake-alba-maaden-about-1-bln-2024-09-18/

2024-09-18 06:44

Sept 18 (Reuters) - India is prepared to keep buying oil from Russian companies that are allowed to make such sales, since prices are cheap, oil minister Hardeep Singh Puri said on Tuesday. Western sanctions on Russia over its war with Ukraine have capped the price Russia can charge for its crude oil, and India is prepared to buy oil and gas at the lowest possible prices from anyone, Puri told Reuters in an interview at the GasTech conference in Houston. "If an entity is not under sanctions, there is no question I will buy from the cheapest supplier," he said. European countries and Japanese businesses are buying from Russia, so India is not alone, he said. India is one of the world's largest consumers of energy, importing 88% of its oil needs, and Puri expects energy use to grow, with increased use of natural gas and renewables. India, the world's third biggest oil consumer and importer, has annual refining capacity of about 252 million metric tons or 5.04 million barrels per day (bpd) and is looking to expand it. "Now, projects are in place to take it up to 300 million metric tons per annum (6 million bpd). We are brainstorming whether we should take it to 400 or 450," he added. A spike in global prices for superchilled gas after Russia's invasion of Ukraine has slowed India's adoption of natural gas. India plans to increase its gas usage to 15% of the energy mix by 2030 up from 6%, but the speed of change depends on prices. "If gas prices were to stabilize and come down then its share in our energy mix will go up," Puri said. Indian state and private companies have invested in liquefied natural gas projects and will continue to look for places to invest globally. Puri said India has held discussions with Guyana, which has over 12 billion barrels of recoverable oil equivalent resources. India also is in talks with the world's five largest oil and gas companies on the possibility of them exploring for hydrocarbons in India, he said. (This story has been corrected to fix the refining capacity to 6 million bpd, not 600,000 bpd, in paragraph 7, and a typo in the headline) Sign up here. https://www.reuters.com/world/india/indian-plans-keep-buying-cheap-russian-oil-oil-minister-says-2024-09-18/

2024-09-18 06:08

LONDON, Sept 18 (Reuters) - The Bank of England may sit out this month's interest rate cutting bonanza, but Thursday's meeting will still be meaningful, as it will throw a spotlight on the BoE's delicate dance with the UK Treasury. The BoE's hesitation in delivering its second rate cut of the year is partly due to questions about how it will incorporate next month's budget statement from the new UK Labour government into its thinking on inflation and growth over the next year. The UK government's murmuring thus far indicate that it's going to put forward a tight budget. This should help the BoE in its efforts to cover the sticky "last mile" of disinflation in services and wages, and it may well clear the decks for more rapid monetary easing moving ahead. And the BoE may end up returning the favour, whether it intends to or not. The Bank is due to announce next year's target for reducing its pandemic-bloated balance sheet of gilts. This "quantitative tightening" (QT) plan is technically separate from its rate policy, and a programme it likely hopes it can pass off without much attention or disruption. But the BoE's QT announcement may be hard to shuffle away quietly. That's partly because it has been one of the few major central banks to engage in active sales of bonds to downsize its balance sheet. In other words, it's not just allowing the debt to mature and roll off organically like the Federal Reserve or European Central Bank. And this time around, there's a twist in the calculation - one that should affect both BoE activity in the bond market over the year ahead and the new Labour government's fiscal math for its keenly-awaited and controversial first budget statement. As it stands, the overwhelming market consensus is the BoE will simply recycle last year's goal of reducing the balance sheet by 100 billion pounds ($131.59 billion) over the coming 12 months. So far, so simple - and in keeping with the BoE's stated aim to be predictable. The issue, however, is that next year will feature a heavier schedule of maturing debt. So a 100 billion-pound targeted runoff would mean active gilt sales would be 75% lower compared to the totals recorded over the past 12 months. And analysts think that the roughly 13 billion pounds of gilt sales required could be completed by year-end, removing the BoE as a seller completely for most of next year. That's likely to be a boon for bond investors - but also for the Chancellor of the Exchequer. GILT FREE? A quirk in the QT process is that it crystallises valuation losses incurred on the bonds between the period in which the BoE bought them, when policy interest rates were near zero, and now, when rates are 5%. The price of those bonds will have plummeted in the meantime. Given that the Treasury is effectively on the hook for BoE losses, QT crimps the government's fiscal space and scope. True, these calculation may merely be shifting the periods in which balance sheet losses are booked, but this added wiggle room could still be a big help for an incoming government under pressure to fill what it claims to be an inherited fiscal hole of some 20 billion pounds. To be sure, not everyone thinks the BoE will stick to the 100 billion QT figure for the year ahead - so the "gift" of fiscal wiggle room may not materialise. Deutsche Bank's UK economist Sanjay Raja thinks the BOE may want to retain a "more consistent footprint" of gilt sales. So he sees it lifting the overall QT target to ensure quarterly gilt sales of 5 billion to 10 billion pounds - not least because active sales will have to rise again the following year. The BoE's estimate of its balance sheet's "steady state" - that is, the size it'll be comfortable with over the long term -implies another 230 billion-pound reduction at least. That suggests the QT process has at least another couple of years to run. Yet, the question of whether UK finance minister Rachel Reeves will use the Treasury's BoE exposure to game its own self-imposed fiscal rules is certainly a live one. There's much speculation about whether Reeves will change the definition of "public sector net debt" that it uses in its five-year debt reduction pledge by excluding BoE exposure, unlike the previous government. The independent Institute for Fiscal Studies , opens new tab last month estimated that based on the last budget, such a move could open as much 16 billion pounds of "fiscal headroom" for the government. The institute also noted this move could be justified if used for investment spending and would be tempting as it involves changes "few people understand or care about". But even so, the think tank said shifting goalposts to make the figures add up seemed hard to justify. "If the government wants to borrow more and spend more, it would ideally make the case for doing so on its own terms, rather than hide behind fiscal jiggery-pokery," it added. Whether the BoE QT plays ball on Thursday remains to be seen. The opinions expressed here are those of the author, a columnist for Reuters ($1 = 0.7599 pounds) Sign up here. https://www.reuters.com/markets/rates-bonds/boe-quantitative-tightening-goal-entangled-fiscal-jiggery-pokery-mike-dolan-2024-09-18/