CANADA - GOLD - Reserves end of a golden era!

Once upon a time Canada was one of the largest producers of gold and now it has none! There was a time when most currencies in the world had a backing of gold, but today many countries use fiat currency, no longerdepending on gold.

In the 1960s Canada had more than a thousand tonnes of gold as part of its foreign exchange reserves. However, it has been long since Ottawa decided to part with gold as it was deemed to be no longer useful as a diversification tool for its monetary interest. The selling away of gold began decades ago and according to the Canadian finance department on March 7, 2016, it just had 77 ounces of gold, which is equivalent to a mere $100,000, against its existing foreign exchange reserves of about $80 billion. 

Speaking to the press recently David Barnabe, the Finance Department spokesman said, “the Canadian government has a long-standing policy of diversifying its portfolio by selling physical commodities (such as gold) and instead investing in financial assets that are easily tradable and that have deep markets of buyers and sellers.” Canadian policymakers believe that it doesn’t make sense to hold gold as the yellow metal hasn’t delivered a good rate of return over time and it costs money to store it.

The Sage of Omaha, Warren Buffett thinks gold is a mere cube that loses its sheen once its value is realised. Buffett in 2012 said that if the world’s entire gold stock was melted into one big cube, that cube would be worth $9.6 trillion, capable of buying all of America’s cropland plus 16 ExxonMobils with a trillion left over. Over time the reserves of cropland would have produced bountiful crops and the ExxonMobils would have mega-multiplied in dividends, but the yellow shiny cube would remain just the same.

Not all countries subscribe to the Sage’s words, especially countries such as India and Russia, who have been on a buying spree. The World Gold Council states central banks around the world have added 336 tonnes of gold to their reserves since the second half of 2015, a 25% y-o-y increase from the previous year. It’s noteworthy that US, the world’s biggest economy, holds 8,133 tonnes of gold that makes up about 72% of its forex reserves. Germany, Italy and France too hold more than half of their reserves in gold.

Zimbabwe

Maize Imports

Grain, grain come again?

As Zimbabwe struggles to stave off starvation due to a severe drought situation in the country, Zambia has suspended maize exports to the former in order to build its stocks in the wake of the El Nino induced drought. This decision of the Zambian authorities has left Zimbabwean grain importers struggling to obtain already paid for maize worth $24 million. With Zimbabwe facing its worst drought in 25 years, the country has now turned to Ukraine for the supply of over half a million tonne of maize, which is an important staple food for Zimbabweans. Zimbabwe’s Vice President Emmerson Mnangagwa, who is also the Chairperson of the Food Security and Nutrition Committee, claims to have secured 500,000 tonnes from Ukraine. The UN food agency has already warned that the El Nino’s impact will be one of the worst in decades and will cause intense drought in southern Africa that will have a devastating impact on the region’s food security.

Netherlands

Beef Exports

A beefy sigh

After years of negotiations, stringent tests and measures, US has finally agreed to open its doors to Dutch beef. It was 20 years ago when US had imposed a ban on Dutch beef imports amid the crisis over mad cow disease. This comes as a great news for exporters of beef in Netherlands, which is the second biggest fresh beef exporting nation after US. Bovine Spongiform Encephalopathy or the mad cow disease hit Britain in 1985 and from there it spread to the rest of EU. An incurable, untreatable fatal ailment that affects cattle as well as humans, the disease had an enormous impact on the world’s beef trade. Netherlands, now becomes the third country, after Ireland and Lithuania, in EU which can export beef and veal to US. The easing of the trade ban comes in the light of US and EU trying to negotiate and implement the TTIP (The Transatlantic Trade and Investment Partnership), the world’s largest free trade zone of a billion customers. According to a Dutch official, the lifting of the ban would mean exports of beef worth about $87 million every year.

UAE

Fish Ban

No more ‘fish’y business

UAE’s Ministry of Climate Change and Environment has once again brought into effect its yearly rule banning the marketing and sale of locally bred or imported emperor fish and rabbitfish. The ban also includes re-exporting of these species during the breeding season and will remain effective until April 30, 2016. The country’s fish stocks have been facing severe challenges, such as overfishing and exploitation, leading to a severe decline in natural fish production. Considering this, the authorities, this year, are leaving no stone unturned to create awareness among fishermen in the country. Such is the extent of the ban that inspection points at all the ports have been set up. Fishermen or traders caught not complying with the ban would be fined and their licences will be revoked if they are caught again. According to Dr. Saif Al Ghais, Executive Director at the Environment Protection and Development Authority, the government has informed all fishing cooperatives, market agents, etc., about the ban.

USA

Anti-Slavery Bill

Saying no to slavery. Again?
Under fire from all corners on the slavery issue, Thailand yet again faced a hard blow and this time from Uncle Sam, as the United States President Barack Obama signed a bill banning the imports of goods produced by slaves, children or indentured labour.

While this move from the United States is being seen as a step forward in the fight against slavery, the new law is also seen to close a loophole in an 85-year-old ban that failed to keep slave-made goods out of America. Fish caught by slave workers or seafood produced by them in Thailand would be among banned products in the United States. Various reports, in the past, had exposed the inhumane working conditions in Thailand’s seafood industry following which several slave workers from the Thai seafood sectors were rescued. Despite the reports of slavery in the lucrative shrimp industry, the exports of Thai seafood to US, Europe and Australia continued unabated. It is worth mentioning here that the new law will also prohibit gold mined by children in Africa and garments sewn by women under duress in Bangladesh from entering the United States.

Indonesia

Mineral Export Ban

Revision. Revival. Return.

If all goes well, Indonesia may start exporting unrefined minerals including nickel, copper, zinc and bauxite next year. There are speculations that the Indonesian government may review its mining policy that had banned partially processed metals exports, in order to prop up its economy. The controversial ban, part of the country’s 2009 Mining Law, was implemented in January 2014 to encourage companies for constructing smelters domestically and boost exports of finished mineral products. However, the ban cost the country billions of dollars of revenue loss as nickel prices plummeted forcing many nickel and bauxite miners to suspend smelter projects.