Agrowatch #19 Bayer's Q1 Earnings, Commodity Prices Rose To Highest In Year & Much More

In Today's Top Stories at Agrowatch Weekly

• Bayer Q1 Earnings Beat Analyst Expectations As EBITDA Down Only 1.3%
• Commodity Prices Rose To Highest Since April 2023, Raising Inflation Fears
• Singapore-based Rize Raises $14 Million To Expand MRV Technology For Rice Farming Emissions
• Microsoft's AI Boom Threaten Its Plan To Be Carbon Zero By 2030

Agribusiness

• Bayer, reported better-than-expected first-quarter earnings with EBITDA falling only 1.3% to €4.41 billion ($4.76 billion), exceeding analyst estimates. Reasons for better-than-expected earnings include growth and profitability from the Pharmaceuticals Division and outperformance by the Crop Science Division in a difficult market. Company shares rose 2.3% after the announcement while company lowered its full-year earnings outlook due to negative currency effects, but maintained its operating forecast. The new EBITDA target is between €10.2 billion and €10.8 billion, down from the previous range of €10.4 billion and €11 billion. CEO Bill Anderson remains focused on restructuring Bayer's management, reducing debt, and handling lawsuits related to the weedkiller glyphosate. Also, In Q1, the company cut the equivalent of 1,500 full-time jobs. Read more: Reuters
• Prices of raw materials like oil, metals and agricultural products have reached their highest point in over a year, according to a Bloomberg index. This surge in commodity prices could make it harder for central banks to control inflation. The rise in commodity prices is due to a combination of factors, including supply disruptions, geopolitical tensions, and people looking to protect themselves from inflation. For example, oil prices have been rising due to strong demand and concerns about supply issues in the Middle East. This increase in commodity prices comes at a time when overall consumer prices in the US are already rising. While the rate of inflation has slowed down slightly, it is still a concern for central banks. Read more: Bloomberg
• African leaders attending the second Africa Fertilizer and Soil Health Summit in Kenya endorsed the Nairobi Declaration on fertiliser and soil health. This commits them to tripling domestic production and distribution of certified organic and inorganic fertilizers by 2034, strengthening research and development on fertilizer use, reversing land degradation and restoring soil health on at least 30% of degraded soil by 2034 and fully operationalizing the Africa Fertilizer Financing Mechanism (AFFM) to improve fertilizer access for farmers. Summit noted that the recent global fertilizer crisis disproportionately affected Africa, leading to a decline in fertilizer consumption. Read more: Down To Earth
• US Department of Agriculture (USDA) and China disagree on how much corn China will import in the coming year, similar to a recent disagreement over soybeans. This has big implications for US corn exports. USDA predicts China will import 23 million tons, same as this year but China's ministry forecast is much lower at 13 million tons, a 5-year low. This 10 million ton gap is a significant portion (18%) of expected US corn exports. USDA believes domestic grain prices in China will be higher than world market prices but China expects a record corn crop, reducing import needs. It's unclear who's closer to the reality, but this disagreement could impact US corn exports. Read more: Reuters

Agritech

• Singapore-based Rize, a startup focused on sustainable rice cultivation, has raised $14 million in a Series A funding round to enhance Rize's technology for measuring, reporting, and verifying sustainable farming practices and expand operations in Indonesia and Vietnam. It will also strengthen Rize's team of agronomists and potentially reach over 20,000 farmers by the end of 2024. Rize's technology stack helps rice farmers become more climate-resilient by reducing water usage by 20%, cutting methane emissions by 50%, increasing crop yields, lowering farming costs and facilitating access to finance. Read more: The Edge Singapore

• Info Edge, a large Indian internet company, is increasing its investment in agritech startup Gramophone by ?15 crore ($1.8 million). This will increase Info Edge's stake in Gramophone to 39.5%. Founded in 2016, Gramophone sells agricultural products like seeds, fertilizers, and equipment directly to farmers and through small retailers. Gramophone is looking to raise additional funds. They have a total funding of about $20.5 million so far. Info Edge has been a long-term investor in Gramophone and has gradually increased its stake over time. Read more: Inc42
• Beyond Leather Materials, has started large-scale production of Leap, a sustainable leather alternative made from apple waste. Leap uses leftover pulp from juice and cider production and can be used in various products, from furniture to car interiors. The company aims to reduce reliance on animal materials and synthetic leather in different industries. With a production capacity of over 100,000 square meters in the first year, Beyond Leather Materials is aiming to meet the growing demand for sustainable alternatives. Read more: Vegconomist

Climate

• Microsoft's ambitious plan to be carbon negative by 2030 is at risk due to its booming AI business. The company's carbon emissions have jumped 30% since 2020 as it invests heavily in data centers to power its AI products. While Microsoft claims to be powered by renewable energy, some of that energy comes from unreliable sources that don't necessarily reduce emissions. The company is looking to improve efficiency and partner with others to develop greener materials like steel and concrete to meet its climate goals. Read more: Bloomberg