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Like their U.S. counterparts, Brazil’s farmers produce much more grain than is needed at home. Foreign customers are responsible for the country’s agricultural boom. Nearly 80 percent of Brazil’s soy exports now head to China.

The city of Luís Eduardo Magalhães is a testament to the importance of this international trade. Located in the state of Bahia, with farms stretching in every direction, the formerly unincorporated rural area in less than two decades has swelled to 85,000 people. That is bigger than Sioux City, Iowa’s fourth-largest city.

Major employers in Luís Eduardo, as most locals call the city, include fertilizer factories, seed producers and processors of soy and cotton. The area “relies 100 percent on agriculture,” said Carminha Maria Missio, a farmer and president of the local growers union.

While Brazil’s overall economy is stuck in a ditch, the nation’s farm sector rolled to 13 percent growth last year. The John Deere dealership in Luís Eduardo saw its sales rise 15 percent in 2017 and is expecting double-digit growth again this year, managing partner Chico Flores Oliveira said.

The local real estate market is surging too. Another new luxury condo tower is slated to open next year. Single-family homes are sprouting throughout the city. Prices for prime farmland are up 37 percent since 2012, according to consultancy Informa Economics IEG FNP.

Brazil’s total soy area is expected to expand to a record 36.28 million hectares this season due to robust Chinese demand, according to a Reuters poll of analysts.

Farmers here also are bullish on this month’s presidential election in Brazil. Far-right candidate Jair Bolsonaro, who is leading in the polls, favors rolling back fines for farmers who deforest illegally or break other environmental laws. Like Trump, Bolsonaro, is wary of China. But producers here trust him not to blow it on trade.

“Rural producers support Bolsonaro emphatically,” said Congresswoman Tereza Cristina, head of the powerful agriculture voting bloc in Brazil’s Congress. “We have access to him…and I am certain that he is smart and sensible.”

U.S. Farm Belt Pinched The outlook is much gloomier in Iowa, the long-established heart of U.S. agriculture.

It is the nation’s top corn-producing state and the No. 2 producer of soybeans. But its access to some global markets has suffered under Trump.

The president walked away from the Trans-Pacific Partnership, a trade agreement that would have opened valuable markets such as Japan to more American ag products. His renegotiation of the NAFTA accord had Mexico, the largest importer of U.S. corn, exploring other suppliers, including Brazil. Now the Chinese are pulling back.

Boone lays smack in the state’s center, surrounded by miles of row crops, hogs and poultry. Farmland values here fell 12 percent from 2012 to 2017, according to Iowa State University. Worries about the U.S.-China trade war loomed over the recent Farm Progress show, which comes to town every other year.

Equipment dealer Lee Randall jotted down prices at an auction of used tractors and implements at the show. Prices have dropped on trade tensions and low crop prices, he said, shaking his head as a green and yellow Deere & Co combine sold for $118,000 and another fetched $82,000.

“Five years ago you could have added 30 percent to every one of these pieces,” said Randall, whose business, Randall Brothers, is based in Ohio.

Nearby, Brett Begemann, chief operating officer for Bayer Crop Science said farmers were likewise scrutinizing purchases of seeds and chemicals. The trade dispute is making it difficult for Bayer to predict 2019 earnings for its agriculture unit.

A two-hour drive north of Boone in Algona, Iowa, a town of about 5,500 people, farm doldrums are crimping business at the local Deere and Harley-Davidson Inc dealerships, the operators said.

“Ultimately this area lives and dies by the farmer,” said Jim Wilcox, an owner of the Harley store.

Farmers’ woes are showing up on bank balance sheets as well. The proportion of the region’s agricultural loans reported as having repayment problems was up in the second quarter, reaching mid-year levels not seen since 2002, according to the Federal Reserve Bank of Chicago.

Rodney Jensen, who farms near Algona, regrets not making deals to sell soybeans from his autumn harvest when prices were higher. Like many, he is storing his crop, waiting for better times.

He worries China will not buy as much U.S. soy as it used to, even if the two nations patch things up.

“It’s been pretty pessimistic around here,” Jensen said.

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Hitachi to announce purchase of ABB’s power grid business: Nikkei

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Signage at the Silicon Valley headquarters of Japanese multinational conglomerate Hitachi, Santa Clara, California, which is reportedly due to announce Dec. 17, 2018 a plan to buy the Swiss engineering group ABB's power grid business.

Smith Collection, Gado | Archive Photos | Getty Images

Signage at the Silicon Valley headquarters of Japanese multinational conglomerate Hitachi, Santa Clara, California, which is reportedly due to announce Dec. 17, 2018 a plan to buy the Swiss engineering group ABB’s power grid business.

Hitachi and ABB will announce on Monday a plan for the Japanese conglomerate to buy the Swiss engineering group’s power grid business, paying up to $7 billion for an initial 50 percent stake, the Nikkei business daily reported.

The two companies, which have previously said they were in talks over the deal, will hold a news conference later on Monday, the business daily said.

The acquisition would allow Hitachi to boost its global presence in the power grid industry, while ABB, which also makes industrial robots, wants to offload its least profitable division to focus on areas such as automation.

A Hitachi spokesman declined to confirm the report, saying it was not something the company had announced.

A source familiar with the situation has valued the power grid business at between $10 billion and $12 billion.

Other sources have said that ABB could keep a stake in the power grid business via a joint venture with Hitachi.

The Nikkei reported that the deal would see Hitachi pay 600 billion-800 billion yen ($5.3 billion to $7 billion) for an initial 50 percent stake in the business.

ABB’s power grid business employs 36,000 people and had sales of $10.4 billion last year. It had an operating profit margin of 10.0 percent in the third quarter, down 60 basis points from a year earlier.

The decision to sell it marks a U-turn for ABB Chief Executive Ulrich Spiesshofer, who decided to keep the business two years ago despite calls from some shareholders to sell.

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Saudi Arabia rejects US Senate position on journalist Jamal Khashoggi

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Saudi dissident Jamal Khashoggi during a press conference in the Bahraini capital Manama, on December 15, 2014.

Mohammed al-Shaikh | AFP | Getty Images

Saudi dissident Jamal Khashoggi during a press conference in the Bahraini capital Manama, on December 15, 2014.

Saudi Arabia early on Monday rejected “the position expressed recently by the United States Senate,” saying that the Jamal Khashoggi murder is a crime that does not reflect the policy of the kingdom, a statement by Saudi’s foreign ministry said.

“The Kingdom of Saudi Arabia rejects the position expressed recently by the United States Senate, which was based upon unsubstantiated claims and allegations, and contained blatant interferences in the Kingdom’s internal affairs, undermining the Kingdom’s regional and international role,” the statement carried by Saudi Press Agency said.

“The Kingdom has previously asserted that the murder of Saudi citizen Jamal Khashoggi is a deplorable crime that does not reflect the Kingdom’s policy nor its institutions and reaffirms its rejection of any attempts to take the case out of the path of justice in the Kingdom.”

The U.S. Senate delivered a rare double rebuke to President Donald Trump on Saudi Arabia last week, voting to end U.S. military support for the war in Yemen and blame the Saudi crown prince for the murder of journalist Khashoggi.

The statement also added “the Kingdom hopes that it is not drawn into domestic political debates in the United States of America, to avoid any ramifications on the ties between the two countries that could have significant negative impacts on this important strategic relationship.”

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Sri Lanka president accuses newly reappointed PM of corrupt leadership

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Sri Lanka’s president accused newly reappointed Prime Minister Ranil Wickremesinghe of corrupt leadership in a scathing speech Sunday in which he voiced doubts about their ability to work together and signaled the 2-month political crisis is far from resolved.

President Maithripala Sirisena administered the oath that returned Wickremesinghe to office, then gave a speech soon after the ceremony, telling the prime minister and a group of his lawmakers that he can’t find people of honesty and integrity to help him take the country forward.

“With the issues we have, I am not sure what guarantees we have that we could go on this journey together,” Sirisena told Wickremesinghe.

The swearing in took place privately, with only a few lawmakers in attendance and media not permitted. It initially indicated an end to the impasse, but Sirisena’s speech is a sign of more acrimony, possibly leading to early parliamentary elections. A new Cabinet is expected to be sworn in soon.

Wickremesinghe spoke separately at his official residence and refrained from responding to Sirisena. “Now I will assume duties of the office of prime minister,” Wickremesinghe told his cheering supporters.

“Unfortunately, during the past few weeks, the progress of this country and the development programs that we undertook were stalled,” he said. “Not only that, the country went backward. Today we commit firstly to bring back normalcy and resuming the development program.”

In his televised speech, Sirisena said his reasons for firing Wickremesinghe included a lack of interest in helping investigate an alleged insider trade during a bond issue, in which a former Central Bank governor who is a close friend of Wickremesinghe is implicated.

He also said Wickremesinghe’s ministers alienated Buddhist monks by having them arrested for keeping unlicensed captive elephants at temples. Sri Lanka is a predominantly Buddhist nation with an influential clergy.

Sirisena also criticized Wickremesinghe for investigations into alleged abuses during the long civil war that ended in 2009. The president said Wickremesinghe had only government soldiers arrested but had not looked into prosecuting former Tamil Tiger rebels he said were hiding in foreign countries.

“My view is that we should prosecute everyone, or else we should negotiate with the international community and free our soldiers (from accusations),” he said.

Both sides were accused of grave wartime abuses. According to a U.N. report, at least 40,000 ethnic Tamil civilians were killed just in the final months of the fighting.

Wickremesinghe had insisted his abrupt firing on Oct. 26 was unlawful. Sirisena’s choice for prime minister, former strongman Mahinda Rajapaksa, lost two no-confidence votes in Parliament but continued to hold the office with Sirisena’s support.

When his opponents went to court, the Court of Appeal suspended Rajapaksa and his Cabinet from functioning in their offices. Rajapaksa asked the Supreme Court to lift the suspension, but it refused and extended the suspension until mid-January, forcing Rajapaksa to resign on Saturday.

The suspension had left Sri Lanka without a government and in danger of being unable to spend government money from Jan. 1. It is also committed to repay $1 billion in foreign debts in January.

“We can be proud of the way our Parliament and Supreme Court did their duties according to the law,” Wickremesinghe said Sunday, adding that the Supreme Court had strengthened the freedom of the citizens by interpreting the law accurately.

“We all need a normal life, we need our progress and it is to this that we are committed,” he said.

Sirisena was health minister in Rajapaksa’s Cabinet when he defected to join Wickremesinghe and challenge Rajapaksa in the 2015 presidential election. After winning the election, he formed a government with Wickremesinghe as prime minister, but the two leaders started to have differences over economic policy and the investigations of alleged wartime abuses.

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