AFP

German Chancellor Olaf Scholz on Wednesday accused Russia of blocking the delivery of a turbine needed to keep gas flowing to Europe via the Nord Stream 1 pipeline.

As the continent’s biggest economy scrambled for energy sources to fill the gap left by Russia’s throttling of supplies, Scholz also opened the door to keeping Germany’s remaining nuclear plants running.

Standing next to the turbine, currently stuck with maker Siemens Energy in Germany, Scholz said the unit was “available and working”.

“There is no reason why this delivery cannot happen,” the chancellor said.

The turbine had received “all the approvals” it needed for export from Germany to Russia, he said.

Pipeline operators only needed to say that “they want to have the turbine and provide the necessary customs information for transport to Russia”, Scholz said, adding that the transfer was “really easy”.

Russian energy giant Gazprom has blamed the delayed return of the unit from Canada, where it was being serviced, for the initial reduction in deliveries of gas via the Nord Stream 1 gas pipeline in June.

Officials in Berlin worked with their counterparts in Canada to expedite the return of the turbine but the unit has yet to reach its final destination.

Deliveries via the undersea energy link were reduced to around 20 percent of capacity in late July, after Gazprom halted the operation of one of the last two operating turbines due to the “technical condition of the engine”.

Germany, which is heavily dependent on Russian gas, has branded the decision to limit supplies as a “political” response over the West’s support for Ukraine.

Scholz said Moscow’s move to limit supplies sent a “difficult message” to the world by creating doubt over Russia’s commitment to its agreements.

– Nuclear debate –

Germany has been working to wean itself off Russian energy imports since the invasion of Ukraine in February.

But the reduction of gas supplies has left Europe’s largest economy facing potential shortages over the winter, leading to calls for Germany’s nuclear power plants to be kept online beyond the end of the year. 

Scholz said Wednesday that it “can make sense” to keep Germany’s remaining three nuclear plants running, despite the long-planned stop.

“As far as the energy supply in Germany is concerned, the three last nuclear plants are relevant exclusively for electricity production, and only for a small part of it,” Scholz said.

The plants, scattered across the country, account for six percent of Germany’s electricity supply. 

The government has said it will await the outcome of a new “stress test” of the national electric grid before determining whether to stick with the phaseout.

Extending the lifetime of the plants has set off a heated debate in Germany, where nuclear energy has long been controversial.

The question has split the governing coalition, with Scholz’s Social democrats and the greens hitherto sceptical, and the FDP favouring an extension.

Germany has already moved to restart mothballed coal power plants to guard against an energy shortfall.

The first of these was already “supplying electricity to the network”, Scholz said Wednesday, adding that Germany had to prepare for a “difficult time”. 

The OPEC+ group of major oil exporters meets Wednesday to discuss its output strategy after US President Joe Biden lobbied Saudi Arabia to boost production to tame soaring prices.

The cartel led by Saudi Arabia and Russia has resisted US pressure to ramp up production significantly so far after Moscow’s invasion of Ukraine sent oil prices soaring.

After cutting production in 2020 in response to falling prices during the Covid pandemic, OPEC+ began to modestly raise it last year and has renewed the policy every month.

Its output is supposed to have returned to pre-Covid levels — but only on paper as some members of the 23-nation group have struggled to meet their quotas.

Craig Erlam, analyst at OANDA trading platform, said the OPEC+ meeting will show whether “President Biden has any influence in the cartel at all”.

Biden made a controversial trip to Saudi Arabia in July in part to convince the kingdom to loosen the production taps to stabilise the market and curb rampant inflation.

The US president met with Crown Prince Mohammed bin Salman despite his promise to make the kingdom a “pariah” in the wake of the 2018 killing of journalist Jamal Khashoggi.

Biden said after his meetings with Saudi officials that he was “doing all I can” to increase the oil supply.

“Saudi Arabia and its allies will have to decide whether to heed Joe Biden’s request and raise production or show solidarity towards Russia by staying put,” said Tamas Varga, analyst at oil broker PVM.

French President Emmanuel Macron also reached out to bin Salman, hosting him last week in Paris, with Macron’s office saying the two leaders agreed to work “to ease the effects” of the Ukraine war.

Before resigning as British prime minister, Boris Johnson had also visited bin Salman in Riyadh in March to lobby for higher oil production.

But Stephen Innes, managing partner at SPI Asset Management, said OPEC+ is “unlikely to announce a significant production increase given growing recession fears” and a drop in oil prices since early June.

– More cautious? –

After reaching close to $140 per barrel in early March, crude prices have slid further this week following weak economic data from China, the world’s biggest importer of oil.

The main contracts were slightly down on Wednesday ahead of the meeting, though Brent — the international benchmark — was back above $100.

This week’s price slide “could make OPEC+ more cautious”, Commerzbank said in a note.

The German bank said news that Libyan production has returned to normal levels for the first time in nearly four months could also serve as an argument against a bigger expansion in output.

OPEC+ began to add around 400,000 barrels per day to the market last year, renewing the policy every month until June, when it upped production by almost 650,000 bpd.

Analysts say the group has now reversed cuts totalling 9.7 million bpd that had been agreed in 2020, though only in theory.

Asian markets mostly rose Wednesday after the previous day’s reverse, though traders remained on edge after House Speaker Nancy Pelosi’s visit to Taiwan, which has further strained China-US ties and raised concerns about the long-term impact on the global outlook.

The highest profile trip to the island in 25 years by a US politician was met with condemnation from Beijing, which warned of serious economic and military consequences.

Taiwan said more than 20 Chinese military aircraft had flown into the island’s air defence identification zone — an area wider than its territorial airspace that overlaps with part of China’s air defence zone. The People’s Liberation Army was also due to conduct a series of drills, while Foreign Minister Wang Yi vowed to “punish” those who offended the country.

Beijing said it would suspend imports of some citrus fruits and fish from Taiwan over alleged “repeated” detection of excessive pesticide residue and positive coronavirus tests on packages, while exports of natural sand were also halted, with no details provided.

Taiwan President Tsai Ing-wen struck a defiant tone at her meeting with Pelosi, saying the island “will not back down. We will… continue to hold the line of defence for democracy”.

At the event, Pelosi said her delegation “came to Taiwan to make unequivocally clear we will not abandon our commitment to Taiwan”.

No one expected it would spark a conflict, but the crisis sent shivers through trading floors that were already on edge over a range of issues including the Ukraine war, surging inflation, rising interest rates and slowing economic growth.

However, Asia enjoyed a small recovery, though some markets pared morning gains.

Hong Kong, Taipei, Tokyo, Singapore, Seoul, Wellington, Jakarta and Manila all rose, though Shanghai, Mumbai, Sydney and Bangkok edged down.

London, Paris and Frankfurt all fell at the open.

The “short-term implication may be ‘sell the rumour, buy the news’ as the official response so far remains much more restrained versus what the market has feared,” Xiadong Bao, at Edmond de Rothschild Asset Management, said.

“But the mid/long-term implication can be more significant, which may be currently overlooked by the market. The official return of the US influence in Asia-Pacific will inevitably accelerate US-China decoupling.”

Analysts are also keen to find out what the White House’s response will be, particularly ahead of mid-term elections in November with anti-China rhetoric playing well with voters, but with President Joe Biden keen not to further harm economic ties.

SPI Asset Management’s Stephen Innes added that the US administration was probably not likely to cut Trump-era tariffs before then.

The broadly positive performance in Asia followed a drop on Wall Street, where the Taiwan crisis was compounded by a series of hawkish comments from Federal Reserve officials indicating more big interest rate hikes could still be in the pipeline.

Stocks rallied last week and Treasury yields dropped after boss Jerome Powell hinted the bank could begin slowing down, but the latest remarks suggest a hoped-for dovish pivot might not be coming just yet as inflation remains stubbornly high.

“This round of Fed speak suggests markets might be a little too optimistic into pricing in a Fed pivot and that rate cut calls for next year are too optimistic,” said OANDA’s Edward Moya.

The latest developments have raised concerns that the volatility on markets would likely continue for some time.

“It’s hard to see any meaningful upside in equities right now,” said Xi Qiao, of UBS Group. “The market is going to trade pretty mixed, stay choppy until we have a little bit more certainty,” she told Bloomberg News.

– Key figures at around 0810 GMT –

Tokyo – Nikkei 225: UP 0.5 percent at 27,741.90 (close)

Hong Kong – Hang Seng Index: UP 0.4 percent at 19,767.09 (close)

Shanghai – Composite: DOWN 0.7 percent at 3,163.67 (close)

Taipei – TAIEX: DOWN 0.2 percent at 14,777.02 (close)

London – FTSE 100: DOWN 0.3 percent at 7,386.52

Dollar/yen: UP at 133.19 yen from 133.10 yen Tuesday

Euro/dollar: UP at $1.0183 from $1.0168

Pound/dollar: UP at $1.2206 from $1.2163

Euro/pound: UP at 83.43 pence from 83.57 pence

West Texas Intermediate: DOWN 0.9 percent at $93.60 per barrel

Brent North Sea crude: DOWN 0.9 percent at $99.63 per barrel

New York – Dow: DOWN 1.2 percent at 32,396.17 (close)

Nintendo said Wednesday its first-quarter net profit jumped 28 percent on-year, mainly thanks to a weaker yen, but hardware and software sales declined because of a chip shortage and Covid-19 supply issues.

The yen has plummeted more than 10 percent against the dollar this year as sky-high US inflation fuels a widening monetary policy gap — a boon for Japanese companies like Nintendo who sell products overseas.

For the three months to June, the gaming giant posted a net profit of 118.9 billion yen ($893 million), citing the positive impact of “the depreciation of the yen”.

But the company left its annual forecast unchanged, warning that the global shortage of semiconductors and other logistical snarl-ups could hamper console production and distribution.

New game releases got off to a good start, including “Nintendo Switch Sports” and “Mario Strikers: Battle League”, it said, but sales were still no match for the previous year during the pandemic gaming boom.

“Due to the effects of supply shortages in semiconductors and other components among other factors, hardware sales were down 22.9 percent year-on-year, and software sales were down 8.6 percent year-on-year,” Nintendo added.

Soaring demand for indoor entertainment during virus lockdowns sent the company’s profits soaring to an annual record of 480 billion yen in 2020-21.

The firm nearly matched that figure in the last financial year, with its blockbuster Switch console continuing to perform well and strong software sales, especially for “Mario Party Superstars” and the latest Pokemon titles.

But Nintendo now has a more cautious outlook as life returns to normal, causing the gaming craze to slow, and expects to report a 340-billion yen net profit in 2022-23.

Hideki Yasuda, senior analyst at Toyo Securities, warned that the chip shortage and supply problems linked to Covid-19 lockdowns in China would continue to pose headaches for Nintendo.

“The company is feeling significant pressure on its supply chain,” he told AFP before the earnings release. “The Switch is sold out at stores. There is not enough supply.”

It will be “very difficult” for Nintendo to hit its annual production target for the console if the problems continue, Yasuda said, after Switch sales declined 20 percent on-year in 2021-22.

However, a recession in the United States or elsewhere is unlikely to pose a major problem, he said.

“Video gaming doesn’t feel the impact of recessions. When the economy is strong, people buy products. When the economy weakens, people spend more time playing games.”

For years, selling eggs was a joyless business for Danai Bvochora, as most of the money she made went to cover minibus fares to the market in a rural area of Zimbabwe.

That was until an earth-brown solar-powered electric tricycle changed her life.

“We used to carry loads on our heads before. The tricycle has lessened the burden,” said the 47-year-old from Domboshava, about 40 kilometres (25 miles) north of Zimbabwe’s capital, Harare.

She carefully loads eggs onto the tricycle’s trailer before embarking on a bumpy eight-kilometre journey to the market.

“We even use it to go to church and worship,” Bvochora said, explaining a single trip to buy chicken feed from a local business centre used to cost her $12.

But charging her new solar-powered vehicle sets her back only $2.50 every two weeks, and the mother of two is now making a profit.

Bvochora is among groups of women in Domboshava, a district renowned for its picturesque hills and giant boulders, who received a tricycle last year as part of a European Union-funded project to assist small-scale farmers.

Assembled by Harare-based social enterprise Mobility for Africa, the  three-wheelers were first introduced in Zimbabwe in 2019 to help women develop their businesses, said the company’s director Shantha Bloemen. 

Transport has historically been inadequate in sparsely populated rural areas of Zimbabwe, where women often have to walk long distances carrying heavy loads on their heads to trade products — which sometimes spoil on the way in the heat.

– Electric push –

Yet the idea of addressing that with electric three-wheelers raised a few eyebrows at first, said American-born Bloemen, who is a permanent resident in Zimbabwe and lived in the country in the 1990s when she worked for UNICEF. 

“It was very lonely when we started,” Bloemen said, explaining her team had to work hard to prove to funders that the idea was viable. 

“No one was talking about electric mobility in Africa let alone for rural women.” 

Three years later, the social enterprise is planning to more than triple its current fleet of 88 motorised vehicles by the end of 2022.

It operates three solar-powered stations, where drivers can come to swap their lithium battery for a fully charged one when running low on energy — and foots the bill when something breaks.

Zimbabwe has for more than two decades faced tough economic conditions, with rural areas particularly hard hit. The country’s economy is mainly driven by the informal sector, to which Domboshava women farmers such as these belong. 

While some of the three-wheelers — nicknamed “Hamba” or “go” in the local Ndebele language — were bought by the EU and then gifted to locals, others are rented out for $5 a day.

Phyllis Chifamba, a 37-year-old mother of four, uses her rented vehicle as a taxi.

Her clients include sick people going to a clinic, pregnant women going for medical checks, and villagers and farm dwellers going to do their shopping and other errands.

“I am able to provide food for my family and pay school fees for my children with the money I make from using the Hamba,” she said.

Mobility for Africa said it was planning to expand operations to other areas. 

“African women are the most entrepreneurial, most productive but no one takes them seriously,” said Bloemen. “If we solve the transport problems, rural economies will work. Small farmers will get more produce to the market.”

Beneficiary Frasia Gotosa said her small business has improved since she has been driving to the market as her vegetables no longer rot while waiting for the bus or pushing a wheelbarrow. 

“Now I get to the market while my produce is still fresh,” she said.