Economic Digest – March 2018

MARCH 2018

AVOCADO

Avocado is fast becoming America’s favourite fruit. Although domestic production has stayed flat, imports have more than trebled over the past ten years. The Department of Agriculture estimates that the annual consumption of the average American has increased from about one pound (0.5 kilograms) in 1989 to more than seven pounds in 2016; total consumption that year weighed in at 2.3-billion pounds. However, enthusiasm may be diminishing as the wholesale price for a case of 48 avocados peaked at US$83.75 recently, up from $34.45 a year before. Shortfall has been brought about by droughts, storms and wildfires in California, Chile and Mexico, while production in California dropped by 44 per cent in 2017.

TRUCKS
About 400 jobs are expected to disappear at Suncor Energy Inc.’s oil sands mines in northern Alberta as it deploys driverless ore-hauling trucks to replace regular trucks. The company has been testing 400-tonne capacity trucks for about four years and has nine now. It will gradually build a fleet of more than 150 driverless trucks. Suncor is the first oil sands mining operation to adopt the technology. Rio Tinto recently announced its autonomous haul trucks in Australia had achieved the milestone of having moved one billion tonnes of material without being involved in any injury accidents. Tires on autonomous trucks last 40 per cent longer because the trucks avoid sudden acceleration and abrupt steering.

CATERPILLARS
The voracious fall armyworm has invaded Africa from the US, marching through Africa’s fields and threatening to cause a food crisis. When just a hungry caterpillar, the fall armyworm will munch on more than 80 plant species, but its favourite is maize. The Food and Agriculture Organization estimates that sub-Saharan Africa has about 35-million hectares of maize grown by smallholders and that almost all of it is now infested or at risk of infestation. It is estimated that the big producers such as Nigeria or Tanzania could lose more than half their maize harvest. Originally from the Americas, these worms, which become simple moths, were a plague there for hundreds of years but American farmers have beaten them back with the help of genetically modified plants and advanced pesticides. Lifting restrictions on GM crops would lead to fewer hungry caterpillars and fewer hungry people.

CARS
Many of the world’s big car markets grew in 2017. In Brazil and Russia, where the industries have been plagued by economic turmoil in recent years, car sales rebounded. New registrations in the European Union swelled by 3.4 per cent. China, the world’s largest car market saw only moderate growth as a tax cut which had boosted sales in 2016 began to be phased out. The picture was gloomier in Britain and the US. Light-vehicle sales in America recorded their first annual drop since 2009 as a result of interest-rate rises and a growing inventory of second-hand vehicles. In Britain, new registrations dropped by 5.7 per cent.

REST
New official guidance in the UK suggests that workers should be given places to rest at work to help boost productivity. Downtime at work can help employees switch off and get better quality sleep at night which maintains cognitive in employees as well as cutting health risks.

BANANAS
Japanese farmers have invented a new type of banana with edible peel using an innovative deep freezing technique. The bananas are made using a pesticide-free cultivation technique called “freeze thaw awakening” which involves replicating a process observed in the Ice Age by keeping the fruits in temperatures as low as -60 degrees Celsius. The result is a banana which appears normal at first glance but is much sweeter than conventionally grown fruits, plus, its peel is 100 per cent edible.

AUSTRALIA
Between 2015 and 2106, one Australian state lost 350,000 hectares of forest. Farmers have been clearing trees at a rate equivalent to 1,000 football pitches a day. That makes the east coast of Australia one of the world’s worst hotspots for deforestation. Environmentalists claim the bulldozing releases carbon dioxide, endangers wildlife and threatens the Great Barrier Reef, because the sediment which flows into its waters prevents coral from photosynthesising. It also negates billions of taxpayer dollars spent on emissions reduction and conservation.

COAL
Nearly two-thirds of US coal-producing states lost coal-mining jobs in 2017, even as overall employment in the pooper sector grew modestly. Total coal-mining jobs grew by 771 to 54,819 led by the Central Appalachian states where coal companies have opened a handful of new mining areas. Over all, the number of coal jobs is still lingering near historic lows at less than one-third the level in the mid-1980s. The election has had little impact on domestic demand for coal with US utilities still shutting coal-fired power plants at a rapid pace and shifting to cheaper natural gas.

GRAIN
Canada’s biggest grain terminal plans to open at Port Metro Vancouver in 2019, nearly one year ahead of schedule. The terminal, capable of handling 8 million tonnes of crops annually on the north shore of Burrard Inlet, will be the first new grain facility in 50 years at the port. To gather crops from farm areas to send by rail to the Vancouver terminal, five new country elevators have being added to the nine western elevators that already exist.

BAMBOO
One third of the world’s reserves of bamboo are in China. Around 40-billion pairs of disposable chopsticks are made from bamboo twigs each year. Steel scaffolding is still often shunned for bamboo on skyscrapers. Though it thrives in steamy, rain-drenched areas, after it is cut, bamboo products require a lot of treatment to withstand sunshine and moisture as they still contain sugar and water. A string of lacquers, resins, waxes, bleaches and preservatives are required to stave off termites and decay. Margins are low and the plants most common uses are toothpicks, matchsticks, incense sticks, mats and baskets. However, the annual value of the bamboo industry has grown 500-fold since 1881, to US$32-billion; in three years China plans to boost this to $48-billion and to have 10-billion people employed.

R&D
Canada’s gross domestic expenditures on research and development rose 0.5 per cent to C$32.8-billion in 2017, following declines in 2015 and 2016. In 2015, business enterprise R&D spending fell by more than $!-billion in 2014, primarily the result of declines in service-producing oil and gas extraction industries. The business enterprise sector has led all other sectors since 1985 in both funding and expenditures. The higher education sector has been the second largest R&D performer in Canada for 30 years spending $17.2-billion in 2015.

TESTING
A revolutionary water sensor which tests for bacteria could save lives in Africa and even help campers in the West. The small piece of paper has been developed by researchers at the University of Bath as a cheap and portable way of making sure people do not drink dirty water. It is inspired by litmus paper which changes colour based on the acidity of water. It could even be used by tourists who are not sure whether their hotel water is safe to drink.

TEA
Tea is still the most popular drink in the world after water. Around 40 per cent of global production of black tea comes from India (China also grows tea, but specialises in green tea which uses the same species of plant but processes it differently). Tea drinking in India has grown by less than 3 per cent a year since 2012 and foreign sales have barely risen in 70 years and in some rich export markets they are shrinking. On the world scene, India is now behind Sri Lanka and Kenya, both relative newcomers. Labour now accounts for around half of production costs in India, a figure which has grown by 12 per cent a year over the past three years.

FISHING
Members of the European Union have voted to ban commercial fishing using an electric current in EU waters, so-called pulse fishing which opponents say is the equivalent to putting a Taser in the water. Fish, particularly sole, are stunned which forces them to float upwards making them easier to catch. Like the use of explosives and poison, pulse fishing is technically illegal in the EU. The US, China and several other countries have a ban too. The Dutch who have been experimenting with pulse fishing say their fleet uses 46 per cent less fuel and catches 50 per cent less unwanted marine life

CHECKOUT
In a move that could revolutionise the way we buy groceries, Amazon has opened its first supermarket without checkouts, human or self-service. It uses an array of ceiling-mounted cameras to identify each customer and track what items they select, eliminating the need for billing. Purchases are billed to customers’ credit cards when they leave the store. Before entering, shoppers must scan the Amazon Go smartphone app. Sensors on the shelves add items to the bill as customers pick them up, and delete any they put back.

STUDENTS
International students are worth US$27-billion to the UK economy. On top of tuition fees, their spending has become a major factor in supporting local economies. London alone gains $6.2-billion and Sheffield is the biggest beneficiary in proportion to its economy. There are about 230,000 students arriving each year for university courses in the UK, most of them postgraduates, with China the most common country of origin.

PLANTS
The connection between people and plants has long been the subject of scientific interest. A study in Youngstown, Ohio discovered that greener areas of the city experience less crime. In another, employees were shown to be 15 per cent more productive when their sparse workplaces were decorated with houseplants. Engineers with MIT have taken it a step further, tinkering with the actual composition of plants in order to get them to perform diverse functions. These include plants that have sensors printed onto their leaves to show when they are short of water and one that can record and transmit 3D images of its surroundings, and even a plant that can detect chemicals used in explosives in groundwater.

WINE
Australia has complained to the WTO about Canadian rules on selling wine. It is claimed that a range of distribution, licensing and sales measures, such as product mark-ups, market access and listing policies as well as duties and taxes on wine at the federal and provincial levels may discriminate either directly or indirectly, against imported wine. Late last year, the US accused British Columbia of giving an unfair advantage to local vineyards by giving their wine an exclusive retail channel in grocery stores and cutting out US competition.

WORK
German metal workers have won the right to a 28-hour working week in a landmark deal between employers and Europe’s biggest union. Under the deal, workers will be allowed to reduce their working week for a temporary period of up to two years and employers will not be able to block individual workers for taking up the offer. Those who take advantage of the deal will only be paid for the hours worked and at the end of the two years they will have to return to the current 35-hour working week. The deal covers about 900,000 workers in the metals and electrical industries. Economists suggest that it is a sign that factors such as work-life balance could be as important as pay in future labour negotiations.

EDUCATION
Yodelling is a form of singing which involves wobbling the voice up and down in a rapid change of pitch. Now, the Lucerne University of Applied Sciences in Switzerland will run a three-year bachelor’ s degree and a two-years master’s programme.