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Reuters
30 minutes ago
- Reuters
Importers struggle to resell Canadian canola meal caught in China tariff crossfire
SINGAPORE, Aug 14 (Reuters) - Importers are struggling to resell several cargoes of Canadian canola meal that arrived in China after Beijing imposed hefty import tariffs on the protein-rich ingredient, three trade sources said. Up to 400,000 metric tons of canola meal, used mainly in animal feed, is sitting in secure warehouses near Chinese ports, with importers facing a 100% duty if they release the cargoes for sale in the domestic market. "It is not viable to pay the duty, so we are looking at the possibility of re-selling it to other markets, maybe to feed-makers in Southeast Asia or South Korea," said an executive with a trading company that is one of the importers of canola meal. "But it will have to be at a discount," the person said, declining to be named as they were not authorised to speak to media. Traders said the canola meal was being offered at a discount of about 30%. The stuck cargoes underscore the struggles of agricultural companies caught in the middle of trade standoffs, at a time when Washington and Beijing's tariff war has disrupted trade in farm products including soybeans. China on Tuesday announced a preliminary anti-dumping levy of 75.8% on imports of canola oilseed from Canada, escalating a year-long trade dispute that began last August with Ottawa's tariffs on Chinese electric vehicle imports. In March, China imposed a 100% tariff on Canadian rapeseed oil, oil cakes and pea imports. "These measures show how the Chinese government is super angry with the Canadian government," said a trader at a company which runs oilseed processing plants in China. "They suddenly increased the duty to 100% on canola meal, which was not expected." Two of the traders estimated the stranded canola meal volumes at 400,000 tons, while one trader said it was around 200,000 tons. At 400,000 tons, the value of canola meal stuck at Chinese ports is worth around $120 million, traders said.
Reuters
an hour ago
- Reuters
Foxconn sees robust AI demand continuing after Q2 profit tops forecast
TAIPEI, Aug 14 (Reuters) - Foxconn expects higher third-quarter revenue, it said on Thursday, on robust demand for artificial intelligence servers, which helped the world's largest contract electronics maker report a forecast-beating 27% increase in second-quarter profit. Foxconn ( opens new tab said it should see significant year-on-year revenue growth in the third quarter, with AI server revenue expected to leap more than 170% year-on-year. Nvidia's (NVDA.O), opens new tab biggest server maker and Apple's (AAPL.O), opens new tab top iPhone assembler has been riding a data centre boom, as cloud computing firms such as Amazon (AMZN.O), opens new tab, Microsoft (MSFT.O), opens new tab and Alphabet's (GOOGL.O), opens new tab Google spend billions of dollars to expand their AI infrastructure and research capacity. That boom helped Foxconn's revenue from its cloud and networking business, which includes AI servers, exceed that from smart consumer electronics - such as iPhones - for the first time ever in the second quarter. Yet, global trade uncertainty could dim the prospects for its outlook this year, as it has a major manufacturing presence in China, though Washington and Beijing this week extended a tariff truce for another 90 days. Most of the iPhones Foxconn makes for Apple are assembled in China, but the bulk of those sold in the United States are now produced in India. The company is also building factories in Mexico and Texas to make AI servers for Nvidia. Foxconn has also been looking to expand its footprint in electric vehicles, which the company sees as a major future growth generator, though that has not always gone smoothly. Earlier this month, Foxconn said it had struck a deal to sell a former car factory at Lordstown, Ohio, for $375 million, including its machinery, that it purchased in 2022 to manufacture EVs. However, it will continue to occupy the facility. The company said in its earnings call with analysts and media on Thursday the Ohio plant would be used to manufacture cloud-related products. Foxconn has also expanded beyond its traditional role as an iPhone assembler into other areas too. Last month it formed a strategic partnership with industrial motor maker TECO Electric & Machinery ( opens new tab to build data centres. Net profit for the April-June period was T$44.4 billion ($1.48 billion), higher than the consensus estimate of T$38.8 billion compiled by LSEG, the company said. Foxconn, formally called Hon Hai Precision Industry, last month reported record second-quarter revenue on strong demand for AI products but cautioned about geopolitical and exchange rate headwinds. For its full-year revenue, it forecast significant year-on-year growth, in line with previous guidance given in May. It did not elaborate and the company does not provide numerical guidance. Foxconn's shares have risen 8.4% so far this year, outperforming the broader Taiwan index's (.TWII), opens new tab 5.2% gain. Its shares closed up 0.5% on Thursday ahead of the earnings release. ($1 = 29.9600 Taiwan dollars)
Reuters
an hour ago
- Reuters
India's long bond rally falters as fiscal risks mount, demand ebbs
MUMBAI, Aug 14 (Reuters) - The rally in India's long-duration bonds is faltering due to dwindling demand from banks, insurers and pension funds, coupled with rising fiscal concerns and limited potential for further rate cuts, according to several investors. Long bonds, or government securities with maturities of 10 years or more, are typically favoured by long-term investors who seek stable returns to match their future liabilities. Slowing tax revenues and weaker nominal GDP growth are straining government finances and souring bond sentiment, already hit by the Reserve Bank of India's signal that the bar for further rate easing will be high. The benchmark 10-year bond yield has risen 24 basis points since the RBI's surprise 50-basis-point rate cut in June, when it shifted its stance to "neutral" from "accommodative". The yield is now hovering at nearly 100 basis points above the policy repo rate. "The primary drivers of the 17 basis points rise in 10-year government securities yields in the past two weeks in our view are weak direct tax receipts, worries over higher supply, and investor positioning," Neelkanth Mishra, chief economist at Axis Bank wrote in a note on Thursday. The government received higher non-tax receipts in the form of RBI's dividend payout but gross direct tax revenues fell 2% between April 1 and August 11. Nominal GDP growth is expected at 8%–8.5% in the financial year 2026, below the budget assumption of around 10%. Still, economists do not expect the government to miss its fiscal deficit target of 4.4% of GDP for the year. "Traction in tax collections going forward could remain critical in achieving the fiscal deficit target for the year," economists at HDFC Bank said in a note. The bond market is also grappling with a growing mismatch between supply and demand for long-duration securities. Axis Mutual Fund pegs gross long-bond supply at 11.98 trillion rupees, outpacing expected demand of 10.82 trillion rupees from insurers, pension and provident funds, while ICICI Prudential Life's head of fixed income, Ketan Parikh said 30-year yields could rise to 7.30–7.40% from 7.20% without clarity on debt supply structure. Appetite is also capped by revised held-to-maturity norms for banks and a higher equity tilt in the national pension scheme, they said. "The 30-year bond is trading at a spread of 180 bps over overnight rates, but the supply-demand scenario is a problem," said Shantanu Godambe, vice president, fixed income investments at DSP Mutual Fund. "A lot of funds and investors have cut down duration as we're nearing the end of the rate easing cycle. But if a supply cut happens as the market is expecting, then we'll see sanctity coming back to that segment and some spread compression on the longer end." The RBI's bond purchases helped absorb supply in the first half of the year, but fresh buying is unlikely in the second half following the recent cut in the cash reserve ratio, said IDFC First Bank's chief economist Gaura Sen Gupta. Long-duration bonds may still offer value for long-term investors, though near-term volatility remains a risk, analysts said. "Unless India faces a significant growth shock or sees renewed momentum from Bloomberg index inclusion, the rally in long bonds is likely over," Devang Shah, head of fixed income at Axis MF wrote in a recent note.
