Dec 30, 2022
Three commodities stories to watch out for in 2022
By Andrew Bell
Fake meat looks set to hurt investors again
This past year wasn’t great for plant-based protein stocks as the industry’s sales growth came up short of analyst expectations. And more letdowns loom in 2022.
Swedish oat milk seller Oatly Group AB saw its shares slide to around US$8 apiece from a June high of almost US$30.
Celebrities such as Oprah Winfrey and Jay-Z have been associated with the fake dairy upstart but heavy marketing has led to growing losses.
Meanwhile, shares in Beyond Meat Inc. have plunged below US$70 from a high of US$221 in January.
U.S. sales in the company’s latest quarter dropped almost 16 per cent. Beyond Meat’s management said problems included supply chain problems and labour shortages (seem to have heard that one before), as well as damage to packaging materials caused by severe weather.
Credit Suisse sees "evidence that Beyond's business is reaching market saturation faster than expected.”
In Canada, Maple Leaf Foods Inc. said it’s rethinking the strategy of expanding into fake meat. “We are seeing a marked slowdown in the plant-based protein category performance,” warned Chief Executive Officer Michael McCain in November.
And growing meat from animal cells in vats may be a daydream. The thecounter.org, which purveys “fact and friction in American food,” talked to biomanufacturing experts who said the costly techniques, which require daunting sterility, can never be expected to produce millions of tonnes of food.
“I don’t think cultured meat has legs,” one researcher said. “It seems like a bunch of hooey.”
A rising tide of investor interest in carbon credits
2022 looks set to be the year in which carbon credits, essentially a permit to pollute, mature as a way for investors to play the global drive to cut emissions.
As of Dec. 30, the US$1.5-billion KraneShares Global Carbon ETF (KRBN on NYSE) was up more than 100 per cent in 2021. Launched in 2020, it holds heavily traded carbon-credits futures contracts in Europe and the U.S.
One factor that may draw investors to buy carbon credits is a feeling that they are actually accelerating the global cleanup.
If investors bid up the price, that makes it more expensive for carbon-intensive companies to operate and may in turn curb pollution.
There is room to create a bigger global market. The World Bank says 45 countries have introduced some form of carbon pricing, including taxes and emissions-trading systems, but these cover only about a fifth of global emissions.
The fight against pollution comes closer to home
The next year will likely bring growing pressure to clean up our own lifestyles.
Environment Minister Steven Guilbeault has outlined how Canada plans to ban plastic grocery bags and Styrofoam takeout boxes by the end of 2022. Also to vanish: plastic cutlery, stir sticks, straws and six-pack rings.
Meanwhile, expect to hear more about bans or restrictions on burning wood in fires and stoves.
“Wood stoves are an unhealthy way to heat a home,” cautioned Melanie Langille, a biologist who serves as chief executive of the New Brunswick Lung Association, in a piece last February for the National Collaborating Centre for Environmental Health.
Heating with wood stoves is said to spew out 25 per cent of Canada’s small-particle pollution.
Despite the harm to lungs, Lagille said that municipal bylaws on residential wood smoke have only been enacted in Montreal and some places in British Columbia.
B.C. communities that have cracked down include Comox, Courtenay and Cumberland on Vancouver Island, which banned wood stoves in new homes.
Langille recommended an energy efficient heat pump as an alternative to wood stoves.
