– U.S. agricultural commodities trader Archer-Daniels-Midland Co said on Thursday it has shuttered its facilities in Ukraine, including an oilseed crush plant and a grain export terminal, after the country was invaded by Russia.
ADM operates a grain port terminal in Odessa, an oilseed crushing plant in Chornomorsk, five inland and one river silos, and a trading office in Kyiv, employing more than 630 people, according to its website.
(Reporting by Karl Plume in Chicago; Editing by Leslie Adler)
By Gabriella Borter
-Florida’s House of Representatives on Thursday approved a Republican-backed bill that would prohibit classroom discussion of sexual orientation and gender identity, a measure Democrats denounced as being anti-LGBTQ.
Dubbed the “don’t say gay” bill by opponents, the legislation is part of a broader political debate in the United States over how sexual orientation and gender identity should be recognized in schools, sports and healthcare settings.
The Florida bill states that “classroom instruction by school personnel or third parties on sexual orientation or gender identity may not occur in kindergarten through grade 3 or in a manner that is not age appropriate or developmentally appropriate for students in accordance with state standards.”
The bill’s supporters said it was designed to keep schools from talking about topics young kids were not ready to process. U.S. President Joe Biden, a Democrat, called it “hateful” in a tweet earlier this month and pledged that his administration would fight to protect the lesbian, gay, bisexual, transgender and queer community.
While the language only specifically includes young children in those primary school grades, critics said it could be interpreted to extend to all grade levels depending on what is deemed “age appropriate.” The bill would allow parents to sue school districts in violation.
The measure passed 69-47 on Thursday, with mostly Republican support.
“Little children do not have a fully developed prefrontal cortex. They don’t have that ability to understand things at a certain level,” Republican state Representative Tom Fabricio said during debate ahead of the vote.
State Democratic Representative Mike Grieco slammed the bill as an attack on LGBTQ people.
“This is an anti-gay bill. And if you vote for this anti-gay bill, after today, you can never ever claim to be an ally of the LGBTQ community. In fact, you are voting to be an opponent,” he told fellow lawmakers.
A companion bill must also be passed in the state Senate before the legislation goes to Governor Ron DeSantis for his signature. DeSantis, a Republican, seemed to signal his support for the bills formally titled “Parental Rights in Education” at a public event earlier this month.
“Injecting these concepts about choosing your gender…that is just inappropriate for our schools,” he told reporters.
The governor’s office did not return a request for comment. The bill would take effect in July if it becomes law.
LGBTQ LEGISLATION
Republican lawmakers across the country have pushed measures seeking to limit children’s education on LGBTQ issues and restrict transgender kids from accessing gender-affirming medical treatment and bathrooms that match their identity.
Democrats have sought to increase children’s freedom to access these services and facilities in accordance with their gender identity.
In Texas this week, Republican Governor Greg Abbott instructed the state’s child welfare agency to investigate any gender-affirming medical procedures for transgender youth as “child abuse.” That move was also widely condemned by LGBTQ advocates, as well as healthcare providers.
The governor’s letter to the Texas Department of Family and Protective Services came after the state attorney general last week wrote that such medical procedures “can legally constitute child abuse” under Texas law.
It was not immediately clear how this interpretation of the law could be enforced.
Cathryn Oakley, state legislative director for the Human Rights Campaign, condemned Abbott’s move and Florida’s bill in a call with reporters on Thursday. She said 2022 is “poised to become the year of the most anti-LGBTQ legislation” in the United States.
(Reporting by Gabriella BorterEditing by Colleen Jenkins and Aurora Ellis)
By Stephanie Kelly
NEW YORK – Oil prices jumped on Thursday, with Brent rising above $105 a barrel for the first time since 2014 before easing, after Russia’s attack on Ukraine exacerbated concerns about disruptions to global energy supply.
Russia launched an all-out invasion of Ukraine by land, air and sea in the biggest attack by one state against another in Europe since World War Two.
U.S. President Joe Biden unveiled harsh new sanctions against Russia, imposing measures to impede its ability to do business in the world’s major currencies along with sanctions against banks and state-owned enterprises.
Britain announced new measures targeting banks, members of Putin’s inner circle and the very wealthy who enjoy high-rolling London lifestyles. UK Prime Minister Boris Johnson said that the West must end its reliance on Russian oil and gas.
Global benchmark Brent crude rose $2.24, or 2.3%, to settle at $99.08 a barrel, after touching a high of $105.79.
U.S. West Texas Intermediate (WTI) crude rose 71 cents, or 0.8%, to settle at $92.81 a barrel, after earlier rising to $100.54.
Brent and WTI hit their highest levels since August and July 2014, respectively.
Later in the session, prices eased after Biden said the United States is working with other countries on a combined release of additional oil from global strategic crude reserves.
The news around reserve releases is “having a psychological impact, but whether there is a real impact will take a few weeks to determine,” said Phil Flynn, senior analyst at Price Futures Group in Chicago.
Russia is the third-largest oil producer and second-largest oil exporter, said UBS analyst Giovanni Staunovo. “Given low inventories and dwindling spare capacity, the oil market cannot afford large supply disruptions,” he added.
Russia is also the largest provider of natural gas to Europe, providing about 35% of its supply.
At least three major buyers of Russian oil were unable to open letters of credit from Western banks to cover purchases on Thursday, sources told Reuters.
China warned of the impact of tensions on the stability of the energy market.
“All countries that are truly responsible should take responsible actions to jointly maintain global energy security,” a Chinese foreign ministry spokesperson said.
Graphic: Brent rises above $100 – https://graphics.reuters.com/GLOBAL-OIL/zgpomzmgnpd/chart.png
In the United States, commercial crude inventories rose 4.5 million barrels last week to 416 million barrels, much more than analysts’ expectations in a Reuters poll for a 400,000-barrel build. [EIA/S]
However, crude in the U.S. SPR fell 2.4 million barrels to 582.4 million barrels, its lowest since 2002, government data showed.
Globally, oil supplies remain tight as demand recovers from pandemic lows.
Reflecting the tightness, the premium on Brent contracts for loading in one month over contracts for loading in six months, a metric closely watched by traders, hit a record high at $13.07 a barrel.
Analysts say Brent is likely to remain above $100 a barrel until significant alternative supplies become available from U.S. shale or Iran, for example.
The United States and Iran have been engaged in indirect nuclear talks in Vienna that could lead to the removal of sanctions on Iranian oil sales.
Iran’s top security official, Ali Shamkhani, said on Twitter that it is possible to achieve a good nuclear agreement with Western powers after significant progress in negotiations.
Analysts are warning of inflationary pressure on the global economy from $100 oil, especially for Asia, which imports most of its energy needs.
“Asia’s Achilles heel remains its vast import needs for energy, with surging oil prices bound to take a hefty bite out of income and growth over the coming year,” said HSBC economist Frederic Neumann.
(Reporting by Stephanie Kelly in New York; additional reporting by Bozorgmehr Sharafedin in London, Emily Chow and Martin Pollard in Beijing and Florence Tan in Singapore; Editing by Marguerita Choy and Matthew Lewis)
By Kylie MacLellan, William James and Elizabeth Piper
LONDON -Prime Minister Boris Johnson unveiled Britain’s largest-ever package of sanctions against Russia on Thursday, targeting banks, members of President Vladimir Putin’s closest circle and wealthy Russians who enjoy high-rolling London lifestyles.
Western nations are coordinating action to impose tough sanctions against Russia in response to its all-out invasion on neighbouring Ukraine by staging missile strikes on cities and pouring its troops into the country.
Speaking to Parliament just hours after Putin declared war with Ukraine, Johnson said the Russian leader would be condemned by the world and by history for his invasion, never able to cleanse the “blood of Ukraine from his hands”.
“This hideous and barbarous venture of Vladimir Putin must end in failure,” he told parliament when announcing the new sanctions, announcing a which saw sanctions being imposed on more than 100 Russian individuals and entities.
“For our part today the UK is announcing the largest and most severe package of economic sanctions that Russia has ever seen.”
After the West was criticised for earlier, weaker sanctions this week in response to Russia recognising two breakaway republics in Ukraine, Johnson said leaders had agreed to work together to “maximise the economic price” Putin will pay.
A government official said the coordinated sanctions would knock percentage points off the Russian economy in the next 12 to 18 months.
END OF LONDONGRAD?
In the 10-point sanctions package, the British government said it would impose an asset freeze on some major Russian banks, including state-owned VTB, its second-biggest bank, and stop major Russian companies from raising finance in Britain.
“Sanctions have been a reality for us over the past few years, and another round of politically motivated anti-Russian sanctions came as no surprise,” VTB said in a statement.
“We have had time to learn the lessons and prepare for the most severe scenario, we have worked through several plans to counter the sanctions in ways which minimise the negative consequences for our clients.”
Since the fall of the Soviet Union three decades ago, London’s capital markets have been the favoured destination for Russian companies seeking to raise money outside Moscow.
Among the people targeted by the second wave of sanctions included Kirill Shamalov, Putin’s once son-in-law.
Pyotr Fradkov, chairman of Promsvyazbank, was also under sanctions. The finance ministry has accused Fradkov of working to transform the bank into one that serves the defence industry.
Britain will also ban Russia’s flagship airline Aeroflot from landing in Britain, suspend dual export licences to Russia and ban exports of some high tech exports and parts of the extractive industry.
Johnson also went further than some other Western countries, calling for Russia to be excluded from SWIFT, the inter-bank messaging network which is the backbone of international finance – a demand made by Ukraine.
At home, officials said the sanctions were aimed at preventing wealthy Russians from using London, often dubbed ‘Londongrad’ or Moscow-on-Thames, as their playground, reducing their ability to store large amounts of cash in Britain’s banks.
“These are people who have international lifestyles,” a diplomatic source said. “They come to Harrods to shop, they stay in our best hotels when they like, they send their children to our best (fee-paying) schools, and that is what’s being stopped.”
(Reporting by Kylie MacLellan, Elizabeth Piper, Andrew MacAskill and William James; writing by Elizabeth Piper and Michael Holden; editing by Guy Faulconbridge, William Schomberg, Alistair Bell and Grant McCool)
WASHINGTON – The United States on Thursday imposed sanctions on Russia in retaliation for its invasion of Ukraine, targeting its two biggest banks and members of the elite in new measures as Washington warned more action could come.
Among the targets were five major Russian banks, including state-backed Sberbank and VTB, the country’s two largest lenders, as well as wealthy individuals and their families. The United States also announced new export control measures.
Washington imposed the new sanctions after Russian forces invaded Ukraine on Thursday, assaulting by land, sea and air in the biggest attack by one state against another in Europe since World War Two.
The U.S. Treasury Department said U.S. banks must sever their correspondent banking ties – which allow banks to make payments between one another and move money around the globe – with Russia’s largest lender, Sberbank, within 30 days.
The restriction aims to hurt the Russian economy by blocking Sberbank from processing and settling payments within the U.S. financial system.
Reuters first reported correspondent banking restrictions were part of the package on Sunday.
Officials in Washington also wielded the U.S. government’s most powerful sanctioning tool, adding Russia’s second-largest bank VTB as well as three others — Otkritie, Novikombank and Sovcombank – to the Specially Designated Nationals (SDN) list.
The move effectively kicks the banks out of the U.S. financial system, bans their trade with Americans, and freezes their U.S. assets.
VTB on Thursday said the imposition of Western sanctions on its operations would limit the usage of its cards outside Russia and advised customers in other countries to withdraw funds or pay using different banks.
Sberbank, Sovcombank, Otkritie and Novikombank did not immediately reply to requests for comment. The Russian embassy in the United States also did not immediately reply to a request for comment.
The Treasury said it was also imposing sanctions on what it called “financial sector elites,” describing them as senior executives at state-owned banks who it said took advantage of their closeness to the Russian power structure to maintain “an extravagant standard of living.”
These included Alexander Vedyakhin, First Deputy Chairman of the Executive Board of Sberbank; and Andrey Puchkov and Yuriy Soloviev, high-ranking VTB Bank executives.
Washington also expanded the scope of existing curbs on U.S. persons dealing in the debt and equity of Russia state-owned enterprises.
(Reporting by Daphne Psaledakis, Simon Lewis, Jonathan Landay, Doina Chiacu and Alexandra Alper in Washington and Michelle Nichols and Karen Freifeld in New York; Editing by Michelle Price and Daniel Wallis)
WASHINGTON -The Institute of International Finance, the largest international banking group, said on Thursday that U.S. sanctions on Russia will have a sizeable impact on Russia’s economy and citizens and could cause a recession.
“The bottom line is that these sanctions will have a significant impact Russia’s overall economy, and average Russians will feel the cost,” the group said in a statement.
“These sanctions target Russia’s domestic financial system, causing bank runs and forcing Russia’s central bank to continue hiking rates. As a result, we are likely to see negative growth in an economy that has already been hindered by increasing isolationism.”
After Russia launched an all-out invasion of Ukraine, U.S. President Joe Biden imposed new sanctions against Russian banks and state-owned enterprises, which will impede the country’s ability to do business in the world’s major currencies.
Biden said the sanctions, which apply to Russia’s two largest banks and would limit the country’s ability to do business in dollars, euros, pounds and yen, are designed to have a long-term impact and to minimize the impact on the United States and its allies.
The sanctions unveiled on Thursday, which add to some announced earlier in the week, do not target Russia’s access to payment provider SWIFT, which is used by more than 11,000 financial institutions in over 200 countries.
(Reporting by Elizabeth Dilts Marshall; Editing by Sandra Maler)
By Praveen Menon
WELLINGTON – Reserve Bank of New Zealand (RBNZ) Governor Adrian Orr said on Friday that countering inflation pressures early prevent the need for even higher rates in the future.
“In other words, we are taking our foot off the accelerator now to minimise having to use the brakes harder in future,” Orr said in a speech at the Waikato University Economics Forum.
Orr said market pricing of future central bank policy rates continue to indicate that New Zealand is expected to tighten policy sooner than many other comparable economies.
(Reporting by Praveen Menon; Editing by Chizu Nomiyama)
By Alan Charlish and Luiza Ilie
MEDYKA, Poland/BUCHAREST -Thousands of Ukrainians fleeing war with Russia started arriving in neighbouring central European countries on Thursday and the region braced for many more, setting up reception points and sending troops towards the borders to provide assistance.
The countries on the European Union’s eastern flank were all once part of the Moscow-led Warsaw Pact and are now members of NATO. Among them, Poland, Hungary, Slovakia and Romania all share land borders with Ukraine.
Russia has launched an all-out invasion of Ukraine by land, air and sea, the biggest attack by one state against another in Europe since World War Two. It has fuelled fears of a massive flood of refugees fleeing Ukraine, a nation of 44 million people.
At the usually quiet border crossing at Medyka in southern Poland, dozens arrived from Ukraine on foot on Thursday morning, carrying luggage. A line of cars waiting for passage grew longer during the course of the day.
A Polish woman, Olena Bogucka, 39, said she had been waiting for four hours while her Ukrainian husband and child were stuck on the other side.
“You can’t get through,” she said. “I can’t reach them on the phone… I don’t how to get my child out… I don’t know what to do.”
To facilitate border crossings, Poland lifted quarantine rules on Thursday for people arriving from outside the EU without a lab-certified negative COVID-19 test.
The country is home to the region’s largest Ukrainian community, numbering around 1 million, and is the easiest EU country to reach from Kyiv.
Warsaw called for the “fiercest possible sanctions” against Russia.
Elsewhere in the region, Czech President Milos Zeman, long sympathetic to Moscow, called Russian President Vladimir Putin a “madman.” Prague stopped issuing visas to Russians and ordered the closure of two Russian consulates.
Hungary’s Prime Minister Viktor Orban, who has also forged good ties with Putin, condemned Moscow’s actions, too. He said Hungary would prepare humanitarian aid for Ukraine and was ready to receive refugees.
Groups of people fled into Hungary via the Beregsurany and Tiszabecs crossings, some coming from as far as Kyiv, a Reuters eyewitness said. Some arrived by car but many pedestrians were also hauling suitcases across.
“No one wants to get conscripted, no one wants to die,” said Tamas Bodnar at the border with Hungary. “It’s clear that those who can, they flee.”
Several hundred people also left Ukraine from a sliver of its territory sandwiched between Moldova and the Black Sea, crossing into Romania by ferry over the Danube river, local authorities said.
Slovak customs officials said passenger cars were having to wait up to 12 hours at the busiest of Slovakia’s three road crossings with Ukraine.
Tens of thousands of Ukrainians work in Slovakia and Hungary, which has a large ethnic minority of around 140,000 living just inside Ukraine’s border.
HOSPITALS ON STANDBY
Poland was preparing a medical train to transport wounded Ukrainians and drew up a list of 1,230 hospitals that could admit the injured, the health ministry said. The Polish army raised the level of preparedness of some units.
“We will do everything to ensure that every person who enters the territory of Poland has access to healthcare, including hospitalisation,” the ministry said.
Poland set up reception points for refugees near border crossings.
Slovakia also said it was ready to help refugees.
“Please let’s have compassion and understanding for them,” Prime Minister Eduard Heger said.
Slovakia will send up to 1,500 troops to its border with Ukraine and additional crossings will be set up, said Defence Minister Jaroslav Nad. Hungary has also said it will send troops to its border to help process refugees.
The governor of Slovakia’s eastern Kosice region, Rostislav Trnka, told Reuters around 2,000 beds and some 60 gyms had been prepared to help house refugees.
The Czech Republic, which does not border Ukraine but is home to 260,000 Ukrainians, also said it was ready to help refugees. Czech Railways offered rail cars with 6,000 seats and beds to help evacuate people if necessary.
Romania is ready to grant humanitarian aid if needed, President Klaus Iohannis said on Thursday, while Bulgarian President Rumen Radev said his country was preparing to evacuate by land more than 4,000 ethnic Bulgarians from Ukraine and was ready to host other Ukrainian refugees.
A Polish government spokesman said Polish diplomatic missions in Ukraine would remain open “as long as possible” but the foreign ministry urged all Polish citizens to leave Ukraine.
Hungary also said its embassy in Kyiv remained open. The Czech Republic closed its Kyiv embassy but its consulate in the western city of Lviv remained open.
Germany offered humanitarian help to countries bordering Ukraine. German media have cited estimates that between 200,000 and one million people may flee to the EU from Ukraine.
(Reporting by bureaus across Central EuropeWriting by Krisztina Than and Jan LopatkaEditing by Gareth Jones and Rosalba O’Brien)
By Vivek Mishra
BENGALURU – Soaring house prices in New Zealand will grind to a halt this year and Australia will follow suit in 2023 as expected higher interest rates rein in two housing markets that are among the least affordable in the world, a Reuters poll predicted.
A multi-year boom in house prices based on near-zero interest rates has gifted homeowners with record piles of equity but is pushing the dream of home ownership further out of reach for first-time buyers, especially those on lower incomes.
While house prices have racked up double-digit gains in both countries over the last year of the pandemic, they rose the most in New Zealand – by nearly 30%. That property market is now the least affordable among OECD nations.
But wages failing to keep pace with living costs, along with the added burden of three interest rate hikes since October from the Reserve Bank of New Zealand and more on the way is expected to slam the brakes on the market.
The Feb. 9-24 Reuters poll of property market analysts showed New Zealand average home prices declining about 1.0% this year. They were then expected to climb 1.5% in 2023 and 2.7% in 2024.
“Prices can’t go up forever…pandemic-era policy stimulus sent prices into the stratosphere and (now) we are already seeing the housing market slow down in New Zealand pretty quickly,” said Jeremy Couchman, senior economist at Kiwibank.
“But affordability is still a major concern…prices are expected to fall a little; still, it’s a big stretch to pull together a deposit for first homebuyers. It is going to be difficult for them, unfortunately.”
New Zealand’s average home price surpassed NZ$1 million for the first time. When asked to describe the level of New Zealand house prices on a scale of 1 to 10, from extremely cheap to extremely expensive, the median response was 9. For Auckland, it was rated 10.
“We’re not talking about large falls in house prices for 2022, so I don’t expect it to become a buyer’s market,” said Mike Jones, senior economist at ASB Bank.
“But the balance of power is expected to shift away from sellers more towards buyers, as extra supply comes on stream, and rising interest rates put a big dent in housing demand.”
In Australia, where prices have nearly doubled since the global financial crisis of 2007-09, they were expected to rise another 6.7% this year, due to record low interest rates.
But that blistering pace of house price appreciation was forecast to come to an end next year and fall 5%.
“The 20%-plus gains in house prices over the past year won’t be repeated in 2022…in 2023, we see prices falling modestly as higher mortgage rates start to bite,” wrote Adelaide Timbrell, senior economist at ANZ.
Australia’s central bank will raise interest rates for the first time in a decade in the third quarter, slightly earlier than thought one month ago, a separate Reuters poll forecast. [AU/INT]
(Reporting by Vivek Mishra; Polling by Md. Manzer Hussain; Editing by Alex Richardson)
By Vivek Mishra
BENGALURU – Australia’s central bank will raise interest rates for the first time in over a decade in the third quarter, slightly earlier than thought a month ago, according to a Reuters poll of economists who see rates by year-end at 0.50%, up from 0.25% previously.
Nearly every other central bank among its peers will have hiked rates from record lows by the end of March. The Reserve Bank of New Zealand has already lifted them several times in the current cycle.
But the Reserve Bank of Australia (RBA) keeps waiting for signs of wage inflation before responding to broad inflationary pressures.
Underlying inflation in Australia, which surged at its fastest annual pace since 2014 in the December quarter, suggests that price growth was not as temporary and or as benign as had been predicted by the RBA.
“Inflation will remain elevated for at least the first half of the year…the RBA can’t afford to ‘be patient’ any longer,” said Wouter van Eijkelenburg, an economist at Rabobank.
In the latest Feb. 18-24 Reuters poll, economists brought forward their rate hike expectations for a fourth straight month and expect the RBA to raise its key interest rate by 15 basis points to 0.25% in the July-September quarter.
Seven of 28 economists forecast rates would go up to 0.50% and two expected them to reach 0.75% in the third quarter. If realised, that would bring borrowing costs back to their pre-pandemic level.
More interest rate rises are on the way, with the benchmark rate expected to reach at least 0.50% by the end of this year according to 21 of 28 economists and 1.25% by the end of 2023, the poll showed.
In the previous survey, published last month, rates were only expected to reach 1.0% by the end of next year.
Along with keeping rates at record lows to support an economy rocked by multiple lockdowns related to the pandemic, the RBA has been aiming to drive unemployment to 4% or lower in the hope of reviving wage growth after years of sub-par growth.
It is near to that goal.
Australian wages picked up to 2.3% in the last quarter as a rapidly tightening labour market drove intense competition for workers, but annual growth was short of the 3%-plus levels that policymakers say would justify a rise in interest rates.
The tightening labour market, combined with rising inflation, also suggests a rate rise is getting closer. Governor Philip Lowe this month said it was plausible a hike could come later in the year should the economy recover as expected.
Money market traders are betting on a rate rise to 0.25% as early as June, climbing to 1.50% by year-end. Among the major local banks, CBA is tipping a first rise in June, Westpac sees August, ANZ says September and NAB November.
“We don’t completely rule out wages growth…and GDP data showing sufficient momentum by Q1 to convince the RBA it should move sooner than our September expectation,” wrote David Plank, head of Australian economics at ANZ.
But some analysts said there was another domestic reason why the RBA appears to be moving more slowly in tightening policy compared with its other central bank peers.
“We expect the Bank to refrain from hiking ahead of the federal election in May…(and) to start hiking in June in response to stubbornly high inflation,” wrote Marcel Thieliant, senior Australia and New Zealand economist at Capital Economics.
(Reporting by Vivek Mishra; Polling by Devayani Sathyan, Tushar Goenka and Md Manzer Hussain; Editing by Ross Finley and Barbara Lewis)
By Stephanie Nebehay
GENEVA – Civilians and critical infrastructure such as water and power systems in Ukraine must be protected from attacks in line with the rules of war, United Nations and Red Cross officials said on Thursday as aid agencies struggled to assess damage from Russia’s attack.
Ukrainian forces fought Russian invaders around nearly all of the country’s perimeter after Russia launched an assault by land, sea and air on Ukraine in the biggest attack on a European state since World War Two.
United Nations High Commissioner for Human Rights Michelle Bachelet said that Russia’s military action “clearly violates international law” and that protecting Ukraine’s civilian population was a priority.
The U.N. refugee agency said the situation in Ukraine was quickly deteriorating and appealed to neighbouring countries to keep their borders open to people seeking a safe haven.
Several thousand Ukrainians have crossed into neighbouring countries, mainly Moldova and Romania, while an estimated 100,000 have fled their homes and are uprooted in the country after Russia’s invasion, the U.N. refugee agency said.
International Committee of the Red Cross President Peter Maurer, in a statement issued after Moscow’s missiles struck major Ukrainian cities including the capital Kyiv, said that all warring sides must respect international humanitarian law.
“They must refrain from attacks that violate the rules of the conduct of hostilities or prohibitions on means and methods of warfare. The use of weapons with wide area effects should be avoided in populated areas,” Maurer said.
“Essential infrastructure must be spared, including water, gas and electrical systems that, for instance, provide civilian homes, schools and medical facilities with vital water and electricity supplies,” he added.
Security permitting, ICRC teams would continue to repair vital infrastructure, supply health facilities with medicines and equipment, and families with food and other items, he said.
The agency, which already had some 600 aid workers across Ukraine, including 400 in the east, has been helping repair two water pumping stations in the Donetsk region damaged by weekend shelling that left 1 million people without water.
“Today it has not been possible to go out and assess damages or provide humanitarian support because the security situation has not allowed it,” Martin Schuepp, ICRC regional director for Eastern Europe and Central Asia, told Reuters in an interview at ICRC headquarters.
“As soon as the situation allows, it will be our priority to go and assess the situation of hospitals, water infrastructure and other critical infrastructure to see how we can best help,” he said.
(Reporting by Stephanie Nebehay; editing by Grant McCool and Jonathan Oatis)
By Tom Balmforth
MOSCOW – Police on Thursday detained more than 1,600 Russians who protested against Russia’s multi-pronged military operation in Ukraine, while authorities threatened to block media reports that contain what Moscow described as “false information”.
In acts of cautious, but unusual dissent, Russian pop stars, journalists, a television comedian and a footballer opposed the war online after President Vladimir Putin launched an invasion of Ukraine in the early hours of Thursday.
By 1939 GMT, police had detained 1,667 people at rallies in 53 cities, the OVD-Info rights monitor said, easily the biggest tally since last year’s crushing of jailed Kremlin critic Alexei Navalny’s network ushered in an ice age in activism.
Protesters defied a warning issued on Thursday by the Investigative Committee, a kind of Russian answer to the FBI, that explicitly threatened criminal action and even jail time for people calling for or taking part in protests.
“I was detained on my way out of the house,” Marina Litvinovich, a Moscow-based activist, wrote on Telegram after she called on Russians in a Facebook post on Thursday morning to protest later that evening.
“We will be cleaning up this mess for years to come. Not even us. But our children and grandchildren,” she said as she announced the protest. “All we see is the agony of a dying man. Alas, Russia is in agony.”
Hundreds of people rallied in cities including Moscow, St Petersburg and Yekaterinburg, chanting slogans like “no to war!” and holding up makeshift signs. One person waved a Ukrainian flag.
Police in Moscow said they had detained 600 people. Authorities in the capital have banned any form of protest, citing the COVID-19 pandemic.
From jail where he appeared at a hearing, Navalny condemned the war as a attempt by the Kremlin to distract from domestic problems like poverty, though it was unclear if he understood the full scale of the invasion from behind bars.
“I’m against this war … It was unleashed to conceal the robbery of Russia’s citizens … and this war will lead to an enormous number of victims from both sides, ruined lives and a continuation of the impoverishment of Russian citizens,” the anti-corruption activist said in footage of the remarks aired by his spokesperson.
‘FEAR AND PAIN’
The displays of opposition to war were often not overtly directed at Putin, whose verbal attack on Ukraine in a speech on Monday set the tone for Thursday’s assault.
But dissent came from unusually mainstream figures such as Ivan Urgant, one of Russia’s most famous television comedians, who wrote on Instagram: “Fear and Pain. NO TO WAR.”
Maxim Galkin, a television presenter and singer, said: “I’ve been in touch with my relatives and friends from Ukraine since morning! I can’t explain in words what I feel! How is this possible! No war can be justified! No to war!”
Others included Fedor Smolov, a footballer for Russia’s national soccer team, Russia’s former no. 1 tennis player Yevgeny Kafelnikov and Nobel laureate Dmitry Muratov, chief editor of the Novaya Gazeta newspaper.
Some of them and other Russians posted a blank, black picture on Instagram to voice opposition.
Russia’s telecommunications regulator warned media organisations on Thursday not to circulate what it described as “false information” about Moscow’s massive military operation against Ukraine and threatened to block offending content.
Russia’s state communications regulator Roskomnadzor said in a statement that it considered information from Russian official sources as reliable.
(Reporting by Tom Balmforth; additional reporting by Alexander Marrow, Maria Kiselyova; Editing by Grant McCool)
– Norwegian Cruise Line Holdings Ltd said on Thursday Russia’s invasion of Ukraine has forced it to alter itineraries and cancel sailings to ports in the countries.
The U.S. cruise line is looking for alternative ports around the Baltic region for its scheduled sailings over the summer. About 5% of its total capacity, or about 50 sailings, anchor at the Russian port city of St. Petersburg over the summer season.
“We are currently working to confirm replacement ports and will advise all impacted guests and travel advisors as soon as possible,” a company spokesperson said in a statement.
Ukrainian forces battled Russian invaders on three sides on Thursday after Moscow mounted an assault by land, sea and air in the biggest attack on a European state since World War Two.
Norwegian Cruise shares were down 2% amid broader market weakness.
“It is disappointing because St. Petersburg is one of the crown jewels of the Scandinavia itineraries. But certainly, there are alternatives,” Chief Executive Officer Frank Del Rio said on a post-earnings call.
It was “not a huge impact,” company executives said.
(Reporting by Deborah Sophia in Bengaluru; Additional reporting by Praveen Paramasivam; Editing by Sriraj Kalluvila and Aditya Soni)
By Chuck Mikolajczak
NEW YORK – The U.S. dollar jumped to its highest level in nearly two years and the Russian rouble plunged to a record low on Thursday after Russia launched an invasion of Ukraine, as investors fled risk assets and moved toward safe-haven assets.
Russian forces invaded Ukraine in an assault by land, sea and air, in the biggest attack on a European country since World War Two.
The dollar index rose 0.869% and was on pace for its biggest daily percentage gain since March 2020, when U.S, markets were in the throes of the first wave of the COVID-19 pandemic. The greenback reached a high of 97.740 against a basket of major currencies, its highest since June 30, 2020.
The dollar weakened slightly as U.S. President Joe Biden announced new sanctions against Russia, including banks.
“We have a big geopolitical development that a lot of people haven’t seen before in their lives; it’s a classic risk-off move,” said Erik Bregar, director, FX & precious metals risk management at Silver Gold Bull Inc in Toronto.
“There is a push and pull over which currency is the biggest safe haven in the moment.”
The Russian rouble weakened 4.51% versus the greenback to 84.96 per dollar after softening to a record low of 89.986 per dollar.
Against other safe havens, the dollar rose 0.77% against the Swiss franc while the Japanese yen weakened 0.54% versus the greenback at 115.61 per dollar.
The greenback also gained sharply against other European currencies such as the Swedish crown, Hungarian forint and Polish zloty.
The Swedish crown fell 1.13% versus the U.S. currency to 9.49 per dollar.
The dollar rose 2.85% against the zloty and rose 3.11% against the forint.
The euro was down 0.95% to $1.1202 while Sterling was last trading at $1.3393, down 1.10% on the day.
The greenback has been subdued recently as tensions in Ukraine have increased and fueled speculation the U.S. Federal Reserve may be less aggressive in tightening policy at its March meeting. Expectations for at least a 50-basis-point interest rate hike have dropped to 7.5% from around 34% a day ago, according to CME’s FedWatch Tool https://www.cmegroup.com/trading/interest-rates/countdown-to-fomc.html?redirect=/trading/interest-rates/fed-funds.html.
Fed policymakers on Thursday acknowledged the central bank’s tightening plans were now jousting with the possibility of war and its impact on oil prices.
In cryptocurrencies, bitcoin last fell 1.22% to $37,067.89.
“In the end, if you want to talk about the safety trade, as much as everyone likes to say bitcoin is great, push comes to shove, people want gold,” said Ken Polcari, managing partner at Kace Capital Advisors in Boca Raton, Florida.
Ethereum last fell 2.21% to $2,560.77.
(Reporting by Chuck Mikolajczak; editing by Jonathan Oatis)
TRENTON, NJ – New Jersey State Police Superintendent, Colonel Patrick Callahan issued words of warning to truckers planning on joining the People’s Convoy protest heading to Washington, D.C. next week.
Keep on trucking…right through the Garden State. Callahan on Wednesday said truckers who impede traffic on New Jersey highways or stop their vehicles will be towed.
Callahan said truckers who seek to disrupt highways and roadways in New Jersey will be dealt with.
“We hope it doesn’t come to that,” Callahan said. “I would hope that we don’t have to use our heavy duty wreckers. It’s one thing to rally and travel on our interstates and to get to a certain rally point. Where they go when they leave New Jersey is obviously up to them.”
Callahan said truckers would have their rigs towed at their own expense.
The convoy will pass through New Jersey with a rally in New Egypt next Saturday.
BALTIMORE, MARYLAND – The Baltimore Police department announced an arrest has been made in the shooting death of 51-Year Old Cheryl McCormack.
According to Police, “On January 24, 2022 at approximately 2:25 a.m., 51-year-old Cheryl McCormack was shot and killed in the 3900 block of White Avenue, following a botched robbery.”
The Homicide Detectives took control of the investigation. “Detectives interviewed potential witnesses, reviewed several area cameras, and were ultimately able to identify the shooter. Homicide detectives obtained an arrest warrant”, police said.
At 12:37am on February 23, 2022 the 16-year-old suspect turned himself in at police headquarters where he was booked and read his Miranda Rights.
Police also said “The suspect has been charged with 1st Degree Murder and is currently waiting to see a court commissioner”.
– Ride-hailing app provider Lyft Inc said on Thursday it is offering its employees in Ukraine financial support for emergency supplies or to temporarily move, along with increased time off, amid a Russian invasion of the country.
Lyft said in December it was on track to have 60 employees in Ukraine, including engineers and scientists, by the end of last year.
(Reporting by Paresh Dave; Editing by Chris Reese)
BERLIN – Cutting off Russia from the SWIFT global interbank payment system should not be part of the second EU sanctions package against Russia that EU leaders will decide upon at a meeting on Thursday in Brussels, German Chancellor Olaf Scholz said.
“It is very important that we agree those measures that have been prepared – and keep everything else for a situation where it may be necessary to go beyond that,” Scholz told reporters, responding to a question on SWIFT, as he arrived to an emergency summit set to discuss Russia’s invasion of Ukraine.
(Reporting by Riham Alkousaa and Sabine Siebold)
– U.S. shale producer Occidental Petroleum Corp on Thursday reported a fourth-quarter profit compared with a year-ago loss, as a recovery in demand has driven crude prices to multi-year highs from pandemic-driven historic lows last year.
Global crude prices jumped more than 50% last year, rebounding from a pandemic-driven slump in demand. They averaged $80 per barrel in the last three months of 2021, nearly doubling from a year earlier.
Occidental said its average realized oil prices during the fourth quarter were $75.39 per barrel, up about 85% from a year earlier.
The company, one of the top producers in the prolific Permian Basin of west Texas and New Mexico, said its average daily oil output was 1.19 million barrels of oil equivalent per day (boepd), compared with 1.14 million boepd a year earlier.
It reported a net income of $1.34 billion, or $1.37 per share, in the three months ended Dec. 31, versus a net loss of $1.31 billion, or $1.41 per share, a year earlier.
Occidental was expected to report its results after markets close on Thursday.
It did not immediately reply to a request on the timing of earnings publication when contacted by e-mail and phone calls.
(Reporting by Ruhi Soni in Bengaluru; Editing by Shinjini Ganguli)
BALTIMORE, MARYLAND – The Baltimore Police Department has reported a shooting on Ulman Avenue.
“On February 24, 2022 at approximately 1:35 a.m., officers responded to the 2600 block of Ulman Avenue for a shooting,” the department said in a statement. “Upon arrival, officers located a 20-year-old female who had been shot in her buttocks. The victim was transported to an area hospital with a non-life threatening injury.”
According to the statement, Northwest District shooting detectives are investigating this incident and have learned that a large fight was taking place at the location. The victim and her friends were walking away from the fight when someone discharged a firearm, striking the victim.
Detectives are asking anyone with information to call (410) 396-2466 or call Metro Crime Stoppers at 1-866-7lockup.
By Howard Schneider and Jonnelle Marte
– U.S. Federal Reserve officials on Thursday began taking stock of how the unfolding conflict in Ukraine might influence the economy and their planned shift to tighter monetary policy, with investors and some officials suggesting it could slow but likely not stop a planned round of interest rate increases.
Oil and commodity price shocks and a possible blow to global growth and confidence were clear risks, analysts said, and one Fed policymaker said the events of the last 24 hours could weigh on upcoming Fed decisions.
“The implications of the unfolding situation in Ukraine for the medium-run economic outlook in the U.S. will also be a consideration in determining the appropriate pace” for raising interest rates, said Cleveland Fed President Loretta Mester.
Richmond Fed President Thomas Barkin said the case for U.S. rate increases remained “robust,” but also called the invasion an “unsettling” event that would force policymakers to think through what might happen.
The risks could be as obvious as high oil prices weighing on consumer spending and raising inflation even further, or as unknowable as how Russia might respond to U.S. sanctions.
“Underlying demand is strong. The labor market is tight. Inflation is high and broadening,” Barkin said, describing the basic case for rate increases. “But I will say that it is unsettling to hear the news. As always happens you have to start and think through where could this thing go that you might not have forecast originally.”
The Fed plans to raise interest rates beginning in March as it battles inflation that has hit multi-decade highs.
Fed policy has already been complicated by the unpredictable impact of a once-in-a-century pandemic, and must now account for a likely energy price shock and other uncertainty following Russia’s military move into Ukraine.
Oil prices spiked overnight, with U.S. crude oil futures topping $100 a barrel for the first time since 2014, and stock prices slid by more than 1% in midday U.S. trading. [nL4N2UZ4CT]
GRAPHIC: U.S. oil prices surge after Russia invades Ukraine – https://graphics.reuters.com/UKRAINE-CRISIS/USA-FED/gdvzybqwypw/chart_eikon.jpg
Investors have now all but ruled out a larger half-percentage-point rate increase at the Fed’s March meeting. CME Group’s widely followed FedWatch tool was signaling at one point that the probability of a hike that large had fallen overnight from about 33% to less than 10%. A quarter-point increase is still anticipated as the Fed begins to lift its target policy rate from the near zero level set at the outset of the pandemic.
STAGFLATION RISK
But the events overnight have dealt the central bank an unexpected new dynamic, an echo of the oil price shocks of the 1970s that were also driven by geopolitical conflict. In that case it was war and other tension in the Middle East, and came at a time when the U.S. economy was far more dependent on imported energy, and U.S. industry far less energy efficient.
Still, Fed officials were beginning to think through the implications of an event that had the potential to both slow growth and add to inflation.
“We’ll be watching this closely here in Atlanta and across the Federal Reserve system to assess the economic and financial impacts,” Atlanta Fed President Raphael Bostic said during a virtual event. Still, he said the Fed’s first-order problem now is controlling inflation, and that he is ready to raise rates by as many as four quarter-point increments this year, “and depending on how things go it may be more than that.”
A few hours before the invasion was reported, San Francisco Fed President Mary Daly said that with U.S. inflation as high as it is and the labor market strong, the Fed should go ahead with rate hikes even with the uncertainty of a Ukraine-Russia conflict. “I really don’t see, unless things get materially worse…that this is going to have an effect” on the Fed’s decision to start raising rates in March, she said at an event Wednesday in Los Angeles.
But officials may now tread a touch more carefully until the breadth of Russia’s actions, and how they affect oil prices, financial markets, and the broader economy, become clearer.
“We think probably now we have reached a tipping point where this is a situation that could start to have impacts on confidence…we know that it’s affecting financial markets,” said Jennifer McKeown, Head of Global Economics Service at Capital Economics.
It is unlikely to derail tightening plans, but “central banks are probably more likely now to be starting to err on the side of caution and worry about the adverse effects on their economy.”
The immediate economic risk appears larger for Europe than the United States, with European Central Bank policymakers convening Thursday in a previously scheduled “informal” gathering that may become a crisis meeting.
Still, the crisis threatens to delay the resolution of prominent factors that have fanned U.S. inflation higher such as global supply bottlenecks, which could keep price pressures high while denting growth prospects.
GRAPHIC: Fed policy rate and inflation hit a record gap – https://graphics.reuters.com/USA-ECONOMY/FEDFUNDS/movandmydpa/chart.png
Beyond the very near term, “the impact of the stagflationary shock is ambiguous and could be net hawkish,” Evercore ISI analysts wrote. “Both the adverse sides of the macro distribution move up: the right tail risk of continued excess inflation in the medium term and the left tail risk that efforts to curb this inflation…end up causing a recession.”
“In the context of the sizeable disruptions to supply chains and energy prices already, this will…complicate the policy response of central banks,” wrote analysts with TD Securities. “The Fed and the U.S. may be removed enough to keep to hiking as planned, though risks shift in terms of 25 (basis point) increments rather than anything more aggressive.”
(Reporting by Howard Schneider and Jonnelle Marte; Additional reporting by Lindsay Dunsmuir and Ann Saphir; Editing by Dan Burns and Andrea Ricci)
By Herbert Lash
NEW YORK – Investors piled into U.S. government debt on Thursday, pushing Treasury yields sharply lower, after Russia invaded Ukraine, but early declines narrowed as investors assessed the assault’s impact on the economy and capital markets.
Ukraine reported columns of troops pouring across its borders from Russia and Belarus and landing on its coast from the Black and Azov seas, in the biggest attack by one country against another in Europe since World War Two.
World stock markets fell and investors fled to safe havens such as U.S. Treasuries and gold. The U.S. dollar strengthened more than 1% against major currencies, and oil rose more than 7% before trimming gains.
The decline in Treasury yields narrowed after U.S. trading opened, as did yields on German 10-year debt as markets closed in Europe.
If the Russian incursion is contained to Ukraine and doesn’t cross into any NATO-related country, tensions likely will shift, especially for U.S. assets, said Kevin Flanagan, head of fixed income strategy at WisdomTree Investments.
“In the near term, uncertainty will reign. You will see volatility in the market that will result in a back-and-forth flight-to-quality, safe-haven trade,” Flanagan said.
While the invasion of Ukraine is of a far more different scale than Russia’s move into Crimea in 2014, it is still more of a Euro-centric issue at the moment, Flanagan said.
“It won’t affect U.S.-based behavior for consumers and for businesses unless things spiral into another phase,” he said.
The yield on 10-year Treasury notes fell 4.8 basis points to 1.929% after earlier touching 1.846%. The benchmark note had been on track for its biggest daily drop since late November.
A closely watched part of the yield curve measuring the gap between yields on two- and 10-year Treasuries, seen as an indicator of economic expectations, was at 41.7 basis points.
History has shown over the past 50 years that geopolitical events rarely have a long-term sustainable impact on capital markets, said Stan Shipley, strategist at Evercore ISI.
“They do move some sectors, whether you’re talking about financial, banking or energy prices,” Shipley said. “But the trends we were seeing will probably continue after a short-term pause.”
The Federal Reserve, which will hold its next policy meeting on March 15-16, has preferred in the past to delay major policy decisions until uncertainty driven by geopolitical risks has diminished, Goldman Sachs said.
But the current situation is different as inflation risk has created a more urgent reason to tighten, though uncertainty has lowered the odds of a 50-basis-point interest rate hike in March, Goldman said. But Goldman said it sees rates steadily rising by 25 basis points at upcoming meetings.
Money markets priced in an 18.5% probability of a 50-basis-point rate hike in March, or half the odds of such an increase as was registered on Wednesday.
The Ukraine invasion complicates the policy outlook for the Fed as energy and some grains prices will likely rise further if the attack deepens, said John Vail, chief global strategist at Nikko Asset Management.
“The silver lining is that the decline in risk markets has helped prevent bond yields from rising to new yearly highs,” he said.
Across the U.S. Treasury curve, yields were sharply lower on the day, with the two-year note down 9.2 basis points at 1.508%.
This echoed moves in European sovereign debt markets, where German Bund yields were set for their biggest daily drop since March 2020 – when the outbreak of COVID-19 threw world markets into turmoil.
Oil prices surged, with international benchmark Brent breaching $100 a barrel for the first time since 2014, as the attack on Ukraine exacerbated concerns about disruptions to global energy supplies.[O/R]
As investors rushed to protect against inflation risks, yields on inflation-linked bonds fell.
The yield on the 10-year Treasury Inflation-Protected Securities (TIPS) was last at 2.6%, indicating that the market sees inflation averaging about 2.6% a year for the next decade.
GRAPHIC: US Treasury yields slide as Russia launches Ukraine invasion – https://fingfx.thomsonreuters.com/gfx/mkt/gkvlgagnrpb/USTagain.png
The breakeven rate on five-year TIPS was last at 3.067%.
The U.S. dollar five-years forward inflation-linked swap, seen by some as a better gauge of inflation expectations due to possible distortions caused by the Fed’s quantitative easing, was last at 2.369%.
The Treasury’s sale of $50 billion in seven-year notes was strong, with the yield at 1.905%.
(Reporting by Herbert Lash; additional reporting by Dhara Ranasinghe, Sujata Rao and Yoruk Bahceli in London; Editing by Bernadette Baum and Leslie Adler)
– The New York City Marathon will return to full capacity with an estimated 50,000 runners set to participate in early November, organisers said on Thursday.
The race, one of the most prestigious events on the global running calendar, was cancelled in 2020 because of the COVID-19 pandemic and returned last year with a reduced field of 30,000 runners amid a number of safety protocols.
“Last year’s marathon served as an uplifting and unifying moment for New York City’s recovery as well as a symbol of renewed hope, inspiration, and perseverance,” New York City Marathon Race Director Ted Metellus said in a news release.
“This November, we are excited to have runners from all over the world fully return as we come together to deliver one of the best days in New York.”
Organisers said this year’s marathon, scheduled for Nov. 6, will require runners to be fully vaccinated. Many event elements will be restored, including on-course entertainment.
The 26.2-mile (42.16 km) run through the city’s five boroughs typically draws hundreds of thousands of people along the race course in a city-wide celebration.
(Reporting by Frank Pingue in Toronto, editing by Ed Osmond)
-The Democrat heading the Senate Banking Committee will try again next Wednesday to advance President Joe Biden’s slate of nominees to the U.S. Federal Reserve who have been held up by a Republican boycott of the confirmation vote, according to a tweet from a Bloomberg reporter on Thursday.
Spokespeople for Sherrod Brown, chair of the Senate Banking Committee, did not immediately respond to requests from Reuters for comment.
Republicans last week refused to show up for a vote on the slate, which includes Jerome Powell for a second term as Fed chair, over objections to Sarah Bloom Raskin to be the central bank’s head of financial regulation.
The other nominees are Fed Governor Lael Brainard, whom Biden wants to make Fed vice chair, along with Michigan State University’s Lisa Cook and Davidson College’s Philip Jefferson.
The Fed is expected to start raising interest rates next month to fight high inflation, a course of action the proposed new additions to the Fed have indicated they would support.
Republicans oppose Raskin because they see her as a champion of climate change activism who would try to cut lending to oil and gas companies. The Senate panel’s top Republican, Pat Toomey, has held up the vote for all nominees over what they say are ethical questions around Raskin’s actions as a director for a financial firm in 2017, and has proposed putting aside her nomination while going forward with a vote on the others.
Democrats and Raskin herself say there were no ethical lapses, and Brown wants all Fed nominees to come for a vote at the same time.
(Reporting by Dan Burns in Newtown, Conn., and Ann Saphir in Berkeley, Calif.Editing by Chizu Nomiyama and Matthew Lewis)
By Gloria Dickie
LONDON – A humpback whale, likely lured by a trawling net capturing masses of Antarctic krill, became entangled last month and died in the Southern Ocean. Three dead juveniles were caught in the same company’s krill nets last year.
Scientists say the humpbacks may have been malnourished while forced to compete for food with a burgeoning industry harvesting the tiny crustaceans – the linchpin in the Antarctic food web – for use in pharmaceuticals and fish feed.
The fishing company, Norway’s Aker BioMarine, said these were its first cases of whale bycatch in 15 years of harvesting krill in Antarctica, and that it has since reinforced its ships’ devices for keeping marine mammals out of its nets.
Pål Skogrand, director of Antarctic affairs and sustainability at Aker BioMarine, said the company “has no desire” to be part of this global problem.
But with the krill industry set to grow significantly in the next decade – as nations including China and Russia plan new investments in the business – scientists and conservationists fear krill trawling could further imperil Antarctic wildlife.
The krill trawlers target the same foraging grounds as fur seals, humpback whales, and blue whales. Penguins are also struggling when fishing vessels are nearby, with studies describing the birds having to swim for longer periods in search of food for their chicks.
“Krill fishing is an acute example that we are fishing down the food web,” said Teale Phelps Bondaroff of the conservation non-profit OceansAsia. “That doesn’t bode well for our global fisheries. It means we’re getting to the end of what’s available in our oceans.”
POLAR ABUNDANCE
The icy waters off Antarctica are estimated to hold between 300 million and 500 million tonnes of krill – nearly as weighty as all of the world’s cattle.
This perceived abundance led Soviet fishing fleets to target Antarctic krill in the 1970s, scooping up hundreds of thousands of tonnes per year until the Soviet Union collapsed in 1991.
Their surveys make Antarctic krill relatively well researched, compared with the 84 other krill species in the world’s oceans. Governments have resisted opening new krill fisheries due to conservation concerns, though both Japan and Canada operate small krill fisheries in the North Pacific.
On the southernmost continent, about 11 vessels from China, Norway, South Korea, Ukraine and Chile trawl the region’s choppy waters from December to July. Under established rules within the Antarctic Treaty System, trawlers must stay largely confined to four areas off the Antarctic Peninsula, with a seasonal catch capped at 620,000 tonnes – less than 2% of the species.
Due to the expense and ice cover, fishing vessels have yet to take the full quota. But in 2020, they scooped up 450,000 tonnes – the most recorded in decades. China more than doubled its take from the previous year.
“If we introduce just a couple more big trawlers we will reach (620,000) tonnes very easily,” said Rodolfo Werner, senior advisor of the Antarctic and Southern Coalition, a group of environmental non-profits. “This has always been our concern.”
The world’s krill industry is still modest in economic terms. But it is growing fast, with the $531-million market for krill oil – one of the key products – projected to rise to $941 million by 2026, according to a report last month by Global Industry Analysts.
Fish farming, for which krill is used as feed, is the world’s fastest growing food sector, with analysts expecting global demand for fish to double by 2050.
“Krill contain so many good elements, such as omega-3s,” said Skogrand, disputing the argument that krill should be left to nourish wildlife alone. That’s “not the way to secure food production in the world.”
Norway’s Aker BioMarine, which accounts for more than 60% of today’s krill catch, added a third ship to its fleet in 2019, as the company “increased our catches significantly in the past five to ten years,” said Skogrand.
Contacted by Reuters, Chinese companies involved in krill fishing declined to comment. The country’s fishery management bureau said last year its krill fishing fleets had reached an “international level” of efficiency, citing unspecified breakthroughs in industrializing krill production.
In a statement to Reuters, the foreign ministry said China “attaches a great importance to conservation and rational use of the marine biological resources of Antarctica.”
China “will definitely grow,” said Dimitri Sclabos, the CEO of the Chile-based krill consultancy Tharos. “They have built several factories for extracting krill oil. There’s a huge market.”
Russia has announced plans to invest 45 billion roubles ($604 million) in the fishery, including building five high-tonnage trawlers.
“The development of krill fishing is part of the policy of the Russian Federation to renew the activities of the Russian fishing fleet in remote areas of the world ocean,” Russia’s state fishing agency told Reuters in a written statement.
SUPPLY PRESSURE
Mindful of the threat krill fishing poses to penguins, eight krill fishing companies in 2018 pledged to stay at least 30 km away from key breeding colonies during incubation and chick-rearing season. An analysis for Reuters by the Global Fishing Watch monitoring agency found that since 2019 the trawlers in operation have upheld that promise.
Even without competition from fisheries, the krill supply is under increasing pressure due to both climate change and a partial rebound in whale numbers since the end of commercial whaling. A 2016 study in the journal Geophysical Research Letters found warmer waters and increased ice melt could drive krill numbers down about 30 percent this century.
“We have limited knowledge of the resiliency of krill to warming,” Bettina Meyer, a marine biologist at the Alfred Wegener Institute, told Reuters by phone while conducting krill research for Aker BioMarine aboard the Antarctic Endurance.
Polar scientists say even current limits on Antarctic krill fisheries may not go far enough to safeguard the food supply for wildlife. A single humpback whale in the West Antarctic Peninsula eats up to 3.1 tonnes of krill a day. The region has an estimated 3,000 humpbacks.
The seasonal catch “is actually being taken from a much smaller area than for which it was appropriately calculated,” said George Watters, director of Antarctic research at the U.S. National Oceanic and Atmospheric Administration. He led a February 2020 study published in Scientific Reports that found penguins were failing to raise as many chicks when 10% or more of the krill was removed from a nearby area.
In October, the Commission for the Conservation of Antarctic Marine Living Resources will consider revising catch limits and trawling zones, due to conservation concerns. It declined to give details of the proposed changes. Approval requires a consensus vote by all 26 commission members.
Scientists fear some nations may object to stricter measures. Beijing and Moscow have been notable opponents of efforts to establish Marine Protected Areas in the region.
The Russian state fishing agency, noting the “impressive” krill stocks in the region, said any changes would have to be “clearly justified” by scientific evidence. “There are not many areas open to fishing.”
(Additional reporting by Gleb Stolyarov in Moscow, David Stanway in Shanghai and Natalie Thomas in Antarctica; Editing by Katy Daigle and Janet Lawrence)