WEBVTT - Bloomberg's Fieser on Coconuts, Niquette on China in US (Audio) 0:00:02.880 --> 0:00:06.279 Global business news twenty four hours a day at Bloomberg 0:00:06.320 --> 0:00:09.399 dot Com, the Radio plus Mobile Act and on your radio. 0:00:09.680 --> 0:00:13.640 This is a Bloomberg Business flag from Bloomberg World Handquaters. 0:00:13.720 --> 0:00:17.200 I'm Charlie Pott. Stocks very close to the lows of 0:00:17.200 --> 0:00:19.520 the session. We've got just over an hour ago before 0:00:19.560 --> 0:00:22.040 the closing bell on a Friday. Here stocks falling in 0:00:22.079 --> 0:00:24.279 the worst sell off since Britain voted to leave the 0:00:24.280 --> 0:00:28.720 European Union. This after a Federal Reserve official signaled more 0:00:28.800 --> 0:00:32.400 willingness to raise interest rates. The SMP five hundred index 0:00:32.520 --> 0:00:36.040 is down two percent, now tumbling forty four points to 0:00:36.720 --> 0:00:40.480 thirty seven. Nasdaq is down one O seven, dropping two 0:00:40.479 --> 0:00:44.519 point one percent down, Industrials down three D twenty one points, 0:00:44.520 --> 0:00:47.640 a drop of one point seven percent, Tenure down twenty 0:00:47.640 --> 0:00:50.440 one thirty seconds, yield there one point six seven percent, 0:00:50.800 --> 0:00:54.440 Gold down seven seventy thirt thirty a drop of six 0:00:54.480 --> 0:00:58.360 tenths of one percent, and West Texas Intermediate Crew down 0:00:58.440 --> 0:01:01.680 three point six percent forty five n one barrel on 0:01:01.920 --> 0:01:08.240 WT I I'm Charlie Pellett, and that's a Bloomberg Business flash. 0:01:08.880 --> 0:01:12.399 You're listening to taking stock with pin box and Kathleen 0:01:12.480 --> 0:01:18.160 Hayes on Bloomberg Radio, have you been drinking coconut water? Well, 0:01:18.200 --> 0:01:21.840 if you're like many of the consumers in the developed world, 0:01:22.080 --> 0:01:26.360 you've never been keener than you have now on coconut water. Starbucks, 0:01:26.360 --> 0:01:30.240 for example, wants the tropical fruit in order to use 0:01:30.360 --> 0:01:34.280 it for its milk to make lattees, and the celebrity 0:01:34.360 --> 0:01:38.200 Rihanna promotes its water as a trendy sports drink. But 0:01:38.280 --> 0:01:41.840 will there be any coconuts left to actually provide that 0:01:42.280 --> 0:01:46.119 all that customers want as a refuser? Is our Caribbean 0:01:46.319 --> 0:01:49.680 correspondent for Bloomberg News and joins us now from Santa Domingo, 0:01:49.880 --> 0:01:52.760 the Dominican Republic, EZRA. Thank you very much for being 0:01:52.760 --> 0:01:55.440 here and thank you for your story. Uh tell us 0:01:55.440 --> 0:02:00.520 the details of the coconut business. I'm glad to be here. Sure, 0:02:00.560 --> 0:02:03.680 in the last decade in the United States and Europe, 0:02:03.680 --> 0:02:06.400 we've seen an explosion in the demand for coconuts. As 0:02:06.400 --> 0:02:10.480 you mentioned, coconut water is that increasingly trendy drink. Um 0:02:10.720 --> 0:02:14.359 coconut milk, coconut creams are in demand. Even the husks 0:02:14.440 --> 0:02:18.679 from coconuts are being used for um car parts and 0:02:18.880 --> 0:02:21.840 the end seats and vehicles for the filling. So there's 0:02:21.840 --> 0:02:24.600 been a real explosion in the demand worldwide for UM 0:02:24.800 --> 0:02:29.400 coconut products. Meanwhile, in the Caribbean, UM they've never really 0:02:29.400 --> 0:02:34.640 rebounded from when the demand was lower. They've struggled with 0:02:34.800 --> 0:02:39.120 natural disasters and insect UM that spreads what's called lethal 0:02:39.200 --> 0:02:42.120 yellowing disease. That's that kills up the fruit and has 0:02:42.200 --> 0:02:45.920 killed entire plantations, and farmers just haven't replanted UM. So 0:02:45.960 --> 0:02:47.840 they're not able to keep up with the demand that 0:02:48.120 --> 0:02:51.840 we've seen increasing in the last decade. But they could UM. 0:02:51.880 --> 0:02:54.600 They could start planting more and I'm assuming as the 0:02:54.639 --> 0:02:59.120 prices rise the incentive is there. It's not like UM, 0:02:59.160 --> 0:03:02.160 you know, the base that are dying off or bananas 0:03:02.200 --> 0:03:05.640 that are some day never gonna be possible to grow again. 0:03:06.040 --> 0:03:08.519 It's just that they haven't really been on their a 0:03:08.720 --> 0:03:11.600 game lately. Right, Yeah, Well, there's two things that uh 0:03:11.840 --> 0:03:14.680 em play here. First is this legally yelling disease. Yellowing 0:03:14.720 --> 0:03:18.200 disease is pretty devastating across the Caribbean, and they really 0:03:18.200 --> 0:03:21.359 haven't figured out a way to replace. The current is 0:03:21.520 --> 0:03:24.760 what's called the tall Atlantic palm, with another ridle that 0:03:24.760 --> 0:03:28.320 that yields the same fruit um and even when they 0:03:28.360 --> 0:03:33.320 do replant a palm tree, it takes about seven years 0:03:33.440 --> 0:03:36.400 for to start producing coconuts, So there's a delay there 0:03:36.440 --> 0:03:39.000 between the time that they replant these plantations and they 0:03:39.040 --> 0:03:41.560 actually begin to yield fruit. And then the other thing 0:03:41.680 --> 0:03:43.680 is for some of these farmers that have these small 0:03:44.360 --> 0:03:48.320 farms and they're contributing their buying. We visited a distributor 0:03:48.440 --> 0:03:50.880 up in north coast of the Dominican Republic who who 0:03:50.880 --> 0:03:53.760 bought from local farmers, and he told us that, you know, 0:03:53.800 --> 0:03:56.640 the price has increased, so they're receiving more for and 0:03:56.720 --> 0:03:59.080 they've planted less, but their income is the same. So 0:03:59.400 --> 0:04:02.720 there's really no incentive for them to cut down their 0:04:02.760 --> 0:04:05.680 trees and replant or expand their plantations because their income 0:04:05.760 --> 0:04:09.000 is the same due to the increasing prices. As is 0:04:09.040 --> 0:04:12.600 it possible that other markets will fill the gap, because 0:04:12.880 --> 0:04:16.240 as you note, the coconut is not indigenous to the 0:04:16.279 --> 0:04:19.799 cur that's true, and it's not one of the largest 0:04:20.040 --> 0:04:23.799 producers in the world. In the Asian countries, Philippines, Um, India, 0:04:23.839 --> 0:04:27.680 Indonesia are the world's leaders, and across the globe, we 0:04:27.760 --> 0:04:30.000 have seen in the last twenty years. In the ten 0:04:30.080 --> 0:04:34.440 years um a increase in production and um the amount 0:04:34.440 --> 0:04:36.400 of an increase in the amount of land that's planted 0:04:36.440 --> 0:04:40.159 for coconuts. So the people, like the producers of Vita 0:04:40.160 --> 0:04:44.080 Cocoa in the US, which consumers are certainly recognized, said 0:04:44.120 --> 0:04:47.160 that they have no no issues with um, you know, 0:04:47.720 --> 0:04:51.640 sourcing their coconuts and they're not worried about a worldwide shortage. 0:04:53.160 --> 0:04:55.440 I believe that the Vita Coca they source a lot 0:04:55.520 --> 0:04:59.679 of their coconut water from Brazil. Correct, that's correct. Actually, 0:04:59.720 --> 0:05:02.200 the story there goes um that the two founders of 0:05:02.240 --> 0:05:04.760 Vita Coco met two Brazilian women in a bar in 0:05:04.839 --> 0:05:07.560 Manhattan and asked them what they missed most from their 0:05:07.560 --> 0:05:10.120 home country, and they said the coconut water. And that's 0:05:10.120 --> 0:05:13.559 where the idea for but Coco was born. So they sigh, 0:05:15.080 --> 0:05:17.640 all right, Azra, thanks very much. Awesome story and Santa 0:05:17.720 --> 0:05:19.600 Domingo must be a sweet place to be as well 0:05:19.640 --> 0:05:23.680 as refeaser as our Caribbean correspondent in Santa Amingo, Dominican 0:05:23.720 --> 0:05:26.599 Republic talking about the shorage and coconuts. This story has 0:05:26.600 --> 0:05:28.760 gotten a ton of hits on the website, so definitely 0:05:28.839 --> 0:05:31.200 check it out. When you have a chance on Bloomberg 0:05:31.400 --> 0:05:34.560 dot Com. Let's go now to my favorite place in 0:05:34.600 --> 0:05:38.039 the entire world, Columbus, Ohio, where Mark Nakatt, the government 0:05:38.040 --> 0:05:40.600 reporter for Bloomberg News, standing by to talk to us 0:05:40.600 --> 0:05:44.400 about what's going on in global politics and Mark, we're 0:05:44.400 --> 0:05:48.600 going to kick it off in China reviving the heartland. 0:05:48.680 --> 0:05:53.160 What what's going on with China really coming here to 0:05:53.279 --> 0:05:56.080 buy stuff? Yes, we have a story up on the 0:05:56.080 --> 0:06:00.000 website by my colleague Andrew Meeta talking about how despite 0:06:00.120 --> 0:06:03.039 the fact that China is sort of vilified on the 0:06:03.080 --> 0:06:05.800 campaign trail as sort of being an unfair trading partner 0:06:05.880 --> 0:06:09.280 and you know, manipulating currency and so forth, China has 0:06:09.279 --> 0:06:13.080 actually been uh doing a lot of investing in the 0:06:13.200 --> 0:06:15.920 United States and particularly here in Ohio where I'm based. 0:06:16.600 --> 0:06:19.520 The story talks about how we have, uh there's an 0:06:19.560 --> 0:06:22.599 old General Motors factory that used to make Chevy trailblazers 0:06:22.600 --> 0:06:25.359 that shut down a few years ago, and uh Chinese 0:06:25.360 --> 0:06:28.839 glass company Fulio Glass has essentially taken over this plans 0:06:29.080 --> 0:06:32.440 has brought inkers to make automotive glass and it's part 0:06:32.480 --> 0:06:35.880 of billions of dollars that China has invested in Ohio 0:06:35.920 --> 0:06:38.760 and Michigan alone and across the US in terms of UH, 0:06:38.839 --> 0:06:42.000 you know, having an imprint in in um um doing 0:06:42.000 --> 0:06:43.880 business here in the United States. I will tell you 0:06:43.920 --> 0:06:47.400 that my grandfather worked at that old General Motors factory 0:06:47.440 --> 0:06:51.120 in Columbus, Ohio for like thirty years. UM and we 0:06:51.200 --> 0:06:53.320 have a history in Ohio. I I obviously I'm a 0:06:53.360 --> 0:06:55.799 Buckeye as well. I'm from Granville. We have a history 0:06:55.800 --> 0:06:59.360 in Ohio of dealing quite well with foreign investment. I mean, 0:06:59.400 --> 0:07:02.880 I remember when Honda and the Japanese came into Marysville 0:07:02.920 --> 0:07:06.560 to put in a plant there and we, uh, we 0:07:06.600 --> 0:07:08.000 did all right with it. And now they're going to 0:07:08.080 --> 0:07:11.360 make the accurate NSX there, which is pretty sweet, right. 0:07:11.440 --> 0:07:13.280 That was a big deal at the time. Form Our 0:07:13.280 --> 0:07:16.679 Governor Jim Rhodes had a personal relationship with the Honda 0:07:16.720 --> 0:07:18.760 chairman at the time, convinced him to come to Ohio. 0:07:18.800 --> 0:07:23.240 It was their first sort of non Japanese plant and 0:07:23.280 --> 0:07:26.880 it's worked out great for uh, certainly Honda and for Ohio. 0:07:26.960 --> 0:07:30.960 It's a huge employer in central Ohio and for the state. Well, Mark, 0:07:31.000 --> 0:07:33.840 can you connect that with some of the political rhetoric 0:07:33.960 --> 0:07:38.160 that we've heard from both candidates because I imagine those 0:07:38.480 --> 0:07:41.680 voters also work at some of these plants, but sure do. 0:07:41.800 --> 0:07:43.720 And there's kind of a disconnect there because a lot 0:07:43.800 --> 0:07:45.840 of the rhetoric you here on the on the campaign trail, 0:07:45.880 --> 0:07:49.200 particularly as it relates to trade, is how um bad 0:07:49.240 --> 0:07:53.280 it's been for workers and manufacturing in the states like 0:07:53.360 --> 0:07:58.360 Ohio and Pennsylvania. Um. You know, trade deals like NAFTA 0:07:58.480 --> 0:08:02.920 and the proposed TPP and are blamed for jobs and 0:08:03.000 --> 0:08:07.000 companies leaving the state and country as opposed to you know, 0:08:07.080 --> 0:08:10.000 foreign investment coming here and and then really that's sort 0:08:10.000 --> 0:08:12.680 of the pushback against the you know, the criticism of 0:08:12.720 --> 0:08:16.520 trade deals that it facilitates the kind of um uh 0:08:16.800 --> 0:08:21.280 foreign investment and job creation that's made possible by these 0:08:21.280 --> 0:08:24.840 trade deals, and you know, it's it's partly the case 0:08:24.920 --> 0:08:28.480 that the candidates haven't reconciled that sort of this distinction 0:08:28.560 --> 0:08:30.520 on the on the trail. I mean, the voters in 0:08:30.560 --> 0:08:33.040 this cycle are very angry. You know, they're looking for 0:08:33.080 --> 0:08:37.199 somebody to blame because either they're unemployed or unemployed or 0:08:37.240 --> 0:08:39.839 their wages are stagnant. And it's easy to blame these 0:08:39.840 --> 0:08:41.960 trade deals and much harder to sort of push back 0:08:42.000 --> 0:08:44.559 and show what the value of these agreements are. Well. 0:08:44.559 --> 0:08:48.480 The concern, of course that Donald Trump, I guess and 0:08:48.559 --> 0:08:52.319 Bernie Sanders had for about the trade deals was really, 0:08:52.840 --> 0:08:56.040 um the balance, right, I mean, how many jobs have 0:08:56.440 --> 0:08:58.720 we gained compared to how many jobs have they gained? 0:08:58.720 --> 0:09:01.120 And I guess now Hillary clintons against TPP as well, 0:09:01.160 --> 0:09:04.199 since that helps her get a few votes. But what 0:09:04.600 --> 0:09:09.360 about let's shift and talk about, um more more concerns 0:09:09.360 --> 0:09:13.640 that are candidates have with international relations? What about Donald 0:09:13.679 --> 0:09:17.200 Trump's deal with Vladimir Putin? Right now? I mean, he 0:09:17.320 --> 0:09:19.800 is getting slammed by Hillary Clinton and a lot of 0:09:19.840 --> 0:09:22.640 people in the media, UM for saying that he thinks 0:09:23.000 --> 0:09:26.559 what uh, Putin is a better leader than Obama. Right, 0:09:26.600 --> 0:09:28.880 It's actually kind of a double whammy there. UM. In 0:09:28.960 --> 0:09:32.760 the forum that was held on Wednesday, UM, regarding issues 0:09:33.080 --> 0:09:36.480 pertaining to the Commander in chief UH and veterans UH, 0:09:36.559 --> 0:09:39.960 Donald Trump said both that he thinks, you know, Putin 0:09:40.000 --> 0:09:41.800 has been a great leader and as you said, better 0:09:41.840 --> 0:09:44.240 than than President Obama. But he also went on to 0:09:45.000 --> 0:09:48.719 UH complain about and in almost disparage, US general is 0:09:48.760 --> 0:09:51.559 saying that they've essentially been reduced to rubble under the 0:09:51.600 --> 0:09:54.320 Obama administration. So it's kind of this double whammy of 0:09:54.760 --> 0:09:59.920 you know, not not defending United States generals and pray 0:10:00.000 --> 0:10:03.240 sing a foreign adversary, Russia. And he's also given other 0:10:03.280 --> 0:10:06.080 interviews where he's sort of poo poo the idea that 0:10:06.440 --> 0:10:10.320 you know, Russia might be trying to hack into or 0:10:10.360 --> 0:10:13.280 interfere with US elections, you know, allegations that have been 0:10:13.320 --> 0:10:16.160 out there and concerns about foreign involvement. You know, Trump's 0:10:16.200 --> 0:10:18.600 tried to sort of, you know, suggest that might not 0:10:18.640 --> 0:10:20.640 be the case. And it's also a left you know, 0:10:20.720 --> 0:10:23.560 Hillary Clinton in a position to say, you know, especially 0:10:23.559 --> 0:10:25.600 to other Republicans, look, you know, is this what you 0:10:25.640 --> 0:10:28.840 really want in your nominee? That you know, if a candidate, 0:10:28.920 --> 0:10:31.480 you know, even for eight years ago, had sort of 0:10:31.520 --> 0:10:34.840 praised Putin and disparaged the president United States, you would 0:10:34.880 --> 0:10:38.720 not see a favorable reaction, for sure. Thanks very much. 0:10:38.800 --> 0:10:42.720 Mark Niquette is our government reporter for Bloomberg News coming 0:10:42.720 --> 0:10:46.080 to us from Columbus, Ohio, and you can follow Mark 0:10:46.320 --> 0:10:51.360 on Twitter at m Niquette. This is taking stock the 0:10:52.440 --> 0:10:56.200 Columbus Ohio. Are you familiar with Columbus Ohio? H I? Oh, 0:10:56.559 --> 0:10:59.480 what a Great State. Yeah, and they also produced you 0:11:01.320 --> 0:11:04.000 Well Done. All Right, I'm PIM Fox my co host 0:11:04.040 --> 0:11:13.439 Matt Miller. This is taking stock, and this is Bloombergh.