The 48th G7 summit was held in Schloss Elmau, Krün, Bavarian Alps, Germany, on June 26-28, 2022. Seven of the world’s richest countries meet annually to discuss security, economic, and environmental issues. Boris Johnson, Olaf Scholz, Justin Trudeau, Emmanuel Macron, Mario Draghi, Fumio Kishida, and Joe Biden attended. After annexing Crimea, Russia has been barred from the G8 since 1998. First summit for Olaf Scholz and Fumio Kishida.
The summit discussed key themes as usual. G7 summit supported Ukraine, threatened anti-Russian penalties, and discussed climate. The three-day G7 conference resulted in more definitive support for Ukraine, greater political and economic pressure on Russia, better climate protection, and a call to China to respect human rights.
Germany, Britain, France, Italy, Japan, Canada, and the USA decided to intensify sanctions against Russia by barring Russian gold imports. Russian energy raw material price capping is also at risk.
The G7 expects China not to help Russia dodge sanctions, said German Chancellor Scholz. The group also urged Beijing to act judiciously in its disagreement with Taiwan, respect human rights not just in Tibet, Hong Kong, or Xinjiang province, and not utilize forced labor against its opponents.
PGII is a counterweight to China’s New Silk Road megaproject. Western countries regard the Belt and Road Initiative as Beijing’s attempt to gain influence in Asia and other continents. Over the next five years, the G7 will invest $600 billion in global infrastructure. Biden said.
Another hot topic was food safety. The G7 blames Russia’s invasion of Ukraine and blockade of Ukrainian grain exports for the present surge in food and fertilizer prices and the global food crisis.
The G7 will impose more restrictions on Russia, reducing its income, particularly from gold sales. They may also cap Russian oil prices. G7 officials say Russia’s aggressive assault against Ukraine is also to blame for rising food and fertilizer costs and the world’s food crisis. Monday, June 27th, Ukrainian President Volodymyr Zelenskyy videoconferenced with the statement.
Argentina, India, Indonesia, Senegal, and South Africa were also invited. Leaders decided to boost global collaboration. They will pursue new partnerships for a just energy change with Vietnam, Indonesia, India, and Senegal.
G7 sanctions, energy, and food agreements
G7 communique: “We will explore further measures to prevent Russia from profiting from its war of aggression. We will further reduce reliance on civil nuclear and related goods from Russia, including working to assist countries seeking to diversify their supplies. For oil, we’ll investigate a number of alternatives, including a possible global ban on transporting Russian seaborne crude oil and petroleum products unless it’s purchased at or below an agreed-upon price with foreign partners.”
“In coordination with the IEA, we will explore additional measures to reduce price surges and prevent further impacts on our economies and societies, in the G7 and global,” the communiqué read.
“We commit to an additional $4.5 billion to protect the most vulnerable from hunger and malnutrition, amounting to a total of over $14 billion as our joint commitment to global food security this year,” the G7 said. G7 summit communique: “We invite all like-minded countries to consider joining us in our actions.”
Antiglobalists protested at prior G7 summits. 20 000 police were ready, but protests were minimal.
Gazprom Believes European Natural Gas Prices Might Rise 60% This Winter.
Gazprom, which is owned by the Russian government and operates as an energy giant, predicted that natural gas prices in Europe might increase by as much as sixty percent this winter.
“The daily spot price of gasoline in Europe has surpassed $2,500. (per 1,000 cubic metres). If the current pattern continues, realistic estimates predict that by the end of this winter, prices will have risen to more than $4,000 per 1,000 cubic meters “On August 16, Gazprom issued a statement that was posted on Telegram.
According to the information provided by the firm, Gazprom produced 13.2% less natural gas from January 1 through August 15 of this year compared to the same time period in 2021. It did not offer any explanations for the falling numbers.
Since the beginning of the conflict, the amount of natural gas that flows from Russia to Europe has decreased. In May, Ukraine cut off one of the most important gas transportation lines used by Gazprom to provide gas to Russia. In the meantime, Gazprom has reduced natural gas deliveries to Europe via the important Nord Stream 1 pipeline to approximately 20% of its capacity. The company cites technical issues as a result of sanctions imposed against Russia as a result of the conflict in Ukraine.
In a recent report it has been discovered that the price of European benchmark Dutch wholesale natural gas reached a record high in the spring of this year of about 335 euros, which is equivalent to $341 per megawatt hour. Although they have decreased to approximately 226 euros per megawatt hour, this is still approximately five times more than they were a year ago.
S&P Global said on August 11 that natural gas prices in Europe have been jumping above records recently and could gain substantially more as winter approaches because the market is pricing in a supply crisis. This is due to the fact that the market is pricing in a shortage of supply.
According to a trader based in Germany who spoke with S&P Global, “Even with full storages, it could prove tough if winter comes colder than expected or if Russia reduces further.”
The financial news service did not offer any pricing projections for the next winter season. It brought to light historical tendencies that point to significant price increases for the distribution of natural gas during periods of supply stresses that occur during the winter. Since the pandemic restrictions began to be relaxed in late 2020, which led to an increase in demand, energy prices have been steadily climbing.
In 2021, the price of a major British winter natural-gas wholesale contract shot up by 84% in a single month, reaching an all-time high in the process. The use of natural gas for heating in Europe often increases significantly during the winter months.
In Europe, consumers are bracing themselves for sticker shock on their electricity bills, despite the fact that governments are increasing assistance for the less fortunate in order to combat the effects of inflation.
Research company Cornwall Insight from the United Kingdom stated earlier in August that they anticipate the average annual power bills to reach £4,200 by January. This is an increase of over three times from the government price cap of £1,277 in the beginning of this year. Foreign Secretary Liz Truss and former Finance Minister Rishi Sunak are both running for the leadership of the Conservative Party, which is currently in power. Both candidates have pledged to take steps that will benefit consumers.
It was recently announced that in Germany, a typical family of four will be required to pay an additional 480 euros per year beginning on October 1, 2018, and continuing through April of 2024 in order to assist utility companies in coping with rising gas prices. For individuals who qualify, the government of this country has implemented a number of new initiatives, including cheaper public transportation tickets and energy price allowances.
As inflation Soars In The UK, Real Wages Fall At A Record Rate.
According to data that was released by the Office of National Statistics on Tuesday, real wages, which reflect the power of employee’s pay after accounting for inflation, decreased by an annual 3% in the most recent quarter. Real wages reflect the power of employee’s pay after accounting for inflation.
According to the ONS, while the average pay grew by 4.7% in the period from April to June (excluding bonuses), the cost of living surged at an even higher rate and outpaced the growth of wages.
According to Darren Morgan, director of economic statistics for the ONS, this is having an effect on the purchasing power of people’ incomes in their day-to-day lives.
“There has been a continuing decline in the real value of pay. When bonuses are taken into account, it is still falling at a rate that is quicker than any other time since similar records were first kept in 2001,” he remarked.
Households in the United Kingdom have been feeling the strain of increased financial strain due to higher energy and food expenditures. As a result of the continued rise in the cost of living issue that has taken hold of the nation, people are seeing their purchasing power decline.
Inflation in the United Kingdom reached a new 40-year high of 9.4% in June, and analysts anticipate that it will climb past 13% by October. This month, in response to rising prices, the Bank of England raised interest rates by 50 basis points, bringing the total to 1.75 percent. This was the greatest single increase in interest rates in 27 years.
According to the economist for the United Kingdom branch of the website Glassdoor for careers, Lauren Thomas, inflation and rising costs are the primary concerns of workers right now.
“The only thing that will remain the same in 2022 is change, and prices will continue to climb. Workers are feeling the pinch despite robust wage growth and a tight labor market, as inflation is emerging as the biggest winner in the current economic climate. The fact that real salaries have fallen by a record 3.0 percent due to inflation means that the cost of living is a priority for many people who are looking for work,” she said.
The data from the ONS also showed that the unemployment rate stayed the same, at 3.8%, although the number of job openings decreased within the same time span.
According to James Smith, an economist at ING who specializes in developed markets, the Bank of England will be keeping a careful eye on both the rate of wage rise and the unemployment rate in the United Kingdom.
“The official forecasts of the Bank of England point to a material increase in the unemployment rate over the next couple of years; however, policymakers will be looking for signs that firms are ‘hoarding’ staff even where margins are squeezed, because they are concerned about their ability to rehire again in the future. The rate of wage rise is currently picking up decent steam, and the committee will be concerned about whether or not this can be maintained, he added.
In the future, this may result in the Bank of England increasing interest rates by a significant amount, as suggested by Smith:
Even if we are getting closer to the conclusion of the tightening cycle, “for the time being,” we think there is not much in these recent numbers that will prevent the Bank of England from hiking interest rates by another 50 basis points in September.
Cannabis: “The United States Is A $100 Billion Opportunity,” States The Head of Tilray
Irwin Simon, CEO of Tilray (TLRY), says that the U.S. market for cannabis is huge, even though Congress hasn’t given it the go-ahead yet.
Simon told Yahoo Finance Live that the U.S. cannabis market is worth $100 billion (video above). “When it comes to cannabis in the U.S., 93% of people want it to be legal for medical use, and between 63% and 65% want it to be legal for adults. Today, about 33 states and the District of Columbia allow it. So, everyone knows that most people want cannabis to be legal.”
Tilray is one of the biggest marijuana growers in the world. It wants to grow its market share by focusing on both recreational and medical marijuana.
Simon stressed that the chances aren’t limited to the drug, though. There is also a growing market for products like food, drinks, and personal care items that are similar to cannabis.
“Once cannabis is legalized in the U.S., big companies like Diageo, Brown-Forman, ABI, and even Nestle and Unilever will want to get into the business because they know that’s what Gen Z and millennials want,” Simon said.
Curaleaf (CURLF) CEO Matt Darin said something similar to what Simon said: “We think that new ideas are the key to the future. And a lot of the growth in the industry is being driven by the new categories that are coming online.”
Darin said that the drinks category, in particular, was a big one. “It’s still a small part of the market,” he said, “but we see that as a category that will keep growing as new ideas come out and as they become more widely available across the country.”
Even though the legal status of weed continues to weigh down the industry, recent earnings point to growth in the cannabis space.
Tilray said that its sales went up by 8% in the fourth quarter of its fiscal year. This made the stock go up, even though the Canadian company was still losing money.
In the second quarter, Curaleaf made a record amount of money and made $338 million in sales.
Darin from Curaleaf said, “We’re seeing some great momentum from that earlier in the year, when it was a little bit harder.” “So, we’re very happy with the results and the way the industry is going.”
“There’s never been more support from both sides.”
Still, the question of legalization is still a big deal for the industry. Simon said that federal changes like legalizing or decriminalizing drugs are not a matter of if, but when.
Darin agreed, “We’re very happy with what’s going on in Washington, D.C. right now.” “Reforms that make sense have never had more support from both parties.”
The National Conference of State Legislatures says that 37 states and D.C. allow some form of medical marijuana use, while 19 states and D.C. allow adults to use marijuana for fun.
POLITICO said that at the end of July, Democrats introduced a bill that would make the drug legal on a federal level, but there are not yet enough votes for it to pass.
Simon said that it would “absolutely” make sense to legalize marijuana and pointed to Canada as a country that has benefited from laws.
“If you take a step back and look at Canada, for example, it’s the only country where it’s legal for adults to use cannabis,” Simon said. “And over the last three and a half years and more, it has brought in about $20 billion in taxes, created over 150,000 jobs, and spent about $6 billion on building up infrastructure.”
“Look at the tax money we’re losing by not legalizing cannabis and the tax money we could be getting,” he said. “All the medical benefits of cannabis today, like how it can help with pain, anxiety, sleep, cancer, and other drugs that it could replace. So cannabis has a lot of good things going for it, which is why it should be legalized.”
Even so, cannabis companies are moving forward with other product lines and international growth, whether or not Congress acts.
“Even if the U.S. doesn’t legalize cannabis in the next few years, our spirits, beer, and Manitoba Harvest businesses will grow a lot,” Simon said. “Twenty countries in Europe allow the use of cannabis for medical purposes. Then there was Canada. Listen up: Canada is as big as California. We won’t stop looking for companies to buy. We will look into making more purchases to add to the Tilray brands.”
Even though the movement toward legalization is slow, Darin said that the companies that are already in business are trying to get ahead of the competition.
Darin said, “It’s important to get started early.” “This has been Curaleaf’s plan from the start.”
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