SCOTUS weakens Clean Water Act | Palm oil demand, prices decline | The high price of pasta may soon fall

Welcome to Portfolio Intelligence Daily, where we spotlight under the radar investment themes and idiosyncratic risks, often involving emerging markets, supply chain issues, ESG risks, and the impact of regulatory changes.

Today:?

• SCOTUS weekends Clean Water Act enforcement
• Palm oil demand drops, prices follow
• Soaring pasta prices may soon come down

Theme summaries are curated by Auquan ’s analyst team using our Portfolio Intelligence Engine to uncover investment insights at scale using NLP and generative AI.?

SCOTUS weakens Clean Water Act enforcement

The US Supreme Court ruled that the Clean Water Act does not extend to groundwater, which could have a significant impact on the environment and public health.

• The 5-4 decision was a major victory for industry groups that had challenged the government's interpretation of the law and have fought such regulations for decades
• The decision is a major setback for President Biden's environmental agenda and his efforts to restore protections to millions of acres of wetlands
• Developers, farmers, and ranchers are among those who are likely to benefit from the decision

“Wetlands that are separate from traditional navigable waters cannot be considered part of those waters, even if they are located nearby.” — Justice Samuel Alito

“By narrowing the (Clean Water) Act’s coverage of wetlands to only adjoining wetlands, the court’s new test will leave some long-regulated adjacent wetlands no longer covered by the Clean Water Act, with significant repercussions for water quality and flood control throughout the United States.” — Justice Brett Kavanaugh?

Select timeline

• May 25, 2023 | Supreme Court weakens EPA power to enforce Clean Water Act (Washington Post)
• May 25, 2023 | Supreme Court dramatically shrinks Clean Water Act's reach (Politico)
• May 25, 2023 | Supreme Court rolls back federal safeguards for wetlands under Clean Water Act (CNN)

Tags: #scotus #cleanwateract #epa #environment #waterpollution ?

Palm oil demand drops, prices follow

Palm oil prices are expected to decline further in the second half of 2023 due to slack demand from China and India.

• Palm oil prices have declined by over 20% so far in 2023
• India's May palm oil imports are set to fall to their lowest in 27 months, as buyers switched to cheaper alternatives such as soy oil and sunflower oil
• The drop in palm oil imports by India, the world's biggest importer of vegetable oils, could bring down palm oil prices?
• Malaysia's crude palm oil production is expected to decline by 1-3 million tonnes in 2024 due to the El Ni?o weather pattern
• The environmental impact of palm oil production continues to be a major global concern for governments, NGOs, and global companies

"Palm oil has been replaced by sunflower oil in many parts of the country due to the price competitiveness of sunflower oil" — Rajesh Patel, managing partner at GGN Research (source )

Select timeline

• May 25, 2023 |? Palm oil likely to head further south on slack demand (The India Business Line)
• May 25, 2023 |? Malaysia's palm oil production seen falling in 2024 due to El Ni?o - MPOB (The Star)
• May 23, 2023 | Top palm oil buyer India's May imports set to fall to 27-month low (Reuters)

Tags: #palmoil #agriculture #malaysia #indonesia #india #china ?#esg

Soaring pasta prices may soon come down

Italian pasta prices have soared 17.5% over the past year through March due to rising energy prices and supply chain bottlenecks that have raised the price of wheat.

• The price of durum wheat, the main ingredient in pasta, has increased by more than 50% in the past year.
• The rate of inflation in Italy is 8.1%, and inflation jumped unexpectedly in April. Italy’s Industry Minister, Adolfo Urso, has convened a crisis commission to discuss the country's soaring pasta costs.?
• The Italian government is looking into whether the price increases are due to corporate greed or production cost increases.?
• Pasta companies have attributed rising pasta prices to higher energy and transportation costs.?
• Price Surveillance Guarantor Benedetto Mineo, who led the crisis discussions, promised that “a significant drop in the cost of pasta is expected shortly.”

“The latest price surveys are already showing the first, albeit weak, signs of price decrease, a sign that the cost of pasta may fall significantly in the coming months.” — statement from the government of Italy (source )

Select timeline

• May 22, 2023 | Pasta prices have surged, prompting crisis meetings in Italy and calls for a strike (CNBC)
• May 15, 2023 | Italy faces national pasta crisis forcing leaders to step in (NY Post)
• May 12, 2023 | Why pasta prices are soaring in Italy (Indian Express)

Tags: #pasta #italy #agriculture #wheat #supplychain ?

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