BASF and America’s Farmers Sound the Climate Change Alarm
Most BASF investors will be worried about the global economy, but the company’s warning about the impact of extreme weather is equally unnerving.
Drown on the farm.
Photographer: Bloomberg/BloombergCorporate bellwethers aren’t an infallible guide to the state of the global economy, but we still need to pay attention to what these canaries in the business coalmine are telling us. Monday night’s profit warning from Germany’s BASF SE, the world’s largest chemical company, is alarming on two counts.
First, it shows that industrial demand remains very weak. That might mean we’re much nearer to the end of this long economic upswing than record-breaking stock markets would have you think. Second, extreme weather – in this case the torrential rains that have disrupted the U.S. growing season and hurt demand for crop chemicals – is adding to the pain for big companies. Our changing climate is starting to take a toll on profit.