Canadian Pacific-Kansas City Southern rail deal seen boosting farm sales

By Rod Nickel and Ankit Ajmera

(Reuters) – Canadian Pacific’s $25 billion deal to buy Kansas City Southern will create a rail network from Canada to Mexico that farm groups say could smooth the flow of their goods to market.

The deal, subject to approval by the U.S. Surface Transportation Board, would combine CP’s cross-Canada network, which stretches as far south as Kansas City, Missouri, with its U.S. rival’s network, which extends south into Mexico.

Mike Steenhoek, executive director of the Iowa-based Soy Transportation Coalition said the deal could increase market access for customers of each railway.

“Many current Canadian Pacific customers currently only have access to export terminals in the Pacific Northwest,” Steenhoek said in a statement. “Similarly, current Kansas City Southern customers may enjoy new access to markets served by the Canadian Pacific network.”

Mexico is a major buyer of U.S. corn and Canadian canola.

“This will open up a whole new set of opportunities for grain shipments,” said an industry source close to the deal.

Canadian grain handlers also see potential for enhanced sales, but are awaiting details on how much of a priority the combined company will place on customer service, said Wade Sobkowich, executive director of the Western Grain Elevator Association, whose members include Cargill Ltd and Richardson International.

CP has effectively moved Canadian grain in the past year, but its spending on upgrading its network has lagged the agriculture sector’s growth during the past five years, Sobkowich said.

For Canadian oil, the merger may offer modest benefits for producers who ship with CP, said John Zahary, chief executive of Altex Energy, which operates rail uploading terminals connected to Canadian National, which handles more oil volumes.

The combination is likely to increase industry price competition and is thus unlikely to face regulatory roadblocks, analysts said.

“This is by default negative for the other railroads, including Canadian National, which faces a longer haul competitor into the Gulf Coast and Midwest,” J.P. Morgan analyst Brian Ossenbeck said in a research note.

Kansas City shares jumped 13% to $252.80 but were still well short of the offer price of $275, a move that analysts attributed to the extended lead time for the deal, which is not expected to close until the middle of 2022.

Shares of Canadian Pacific fell about 5%.

CP Chief Executive Keith Creel approached Kansas City Southern CEO Pat Ottensmeyer late last year to discuss a deal, the industry source said, adding that the two executives know each other well.

While it is the biggest M&A deal announced thus far in 2021 and is the largest ever involving two rail companies, it ranks behind the 2010 takeover of BNSF by Warren Buffett’s Berkshire Hathaway for $26.4 billion.

The cash-and-stock offer has an enterprise value of about $29 billion, implying an 18 times multiple to Kansas City’s 2021 earnings before interest, taxes, depreciation, and amortization (EBITDA) estimate, according to analysts.

That is higher than Kansas City’s current multiple of 14 times, making any competing bids unlikely, Ossenbeck said.

(Reporting by Ankit Ajmera and Sanjana Shivdas in Bengaluru, Rod Nickel in Winnipeg, Allison Lampert in Montreal and Maiya Keidan in Toronto; Editing by Christian Plumb, Anil D’Silva and Jonathan Oatis)

Biden sends envoys to Mexico, Guatemala asking help on migrant flow

WASHINGTON/MEXICO CITY (Reuters) – U.S. officials will ask authorities in Mexico and Guatemala to help stem migrant traffic, White House press secretary Jen Psaki said on Monday, as the Biden administration struggles to contain a burgeoning humanitarian challenge along the U.S. border with Mexico.

President Joe Biden dispatched U.S. envoys, including White House border coordinator Roberta Jacobson, to the two countries on Monday for talks on how to manage the increase in the number of migrants heading for the U.S.-Mexican border.

When asked if the U.S. delegation would seek support from local officials, Psaki told a news briefing:

“Absolutely, part of our objective as Roberta Jacobson,…conveyed when she was in here just a few weeks ago, was that we need to work in partnership with these countries to address the root causes in their countries to convey clearly and systematically that this is not the time to travel.”

Jacobson was joined by Juan Gonzalez, the National Security Council’s senior director for the Western Hemisphere, and Honduran-born diplomat Ricardo Zuniga, just appointed by the State Department as the Northern Triangle special envoy.

Gonzalez will continue to Guatemala to meet Guatemalan officials, as well as representatives from civil society and non-governmental organizations.

Biden’s promise to end former President Donald Trump’s hardline immigration policies has been complicated by a recent spike in the number of migrants crossing the border illegally.

The increase in the number of migrants fleeing violence, natural disasters and economic hardship in Central America is testing Biden’s commitment to a more humane immigration policy.

White House spokeswoman Emily Horne said Jacobson’s goal in Mexico is developing “an effective and humane plan of action to manage migration.”

The visit was also announced by Mexico’s foreign ministry, which said the talks would take place on Tuesday.

Gonzalez’ aim in Guatemala is to “address root causes of migration in the region and build a more hopeful future in the region,” Horne said.

U.S. officials are struggling to house and process an increasing number of unaccompanied children, many of whom have been stuck in jail-like border stations for days while they await placement in overwhelmed government-run shelters.

Biden has resisted calling the border drama a crisis despite Republicans’ insistence that it fits the description.

“Children presenting at our border, who are fleeing violence, who are fleeing prosecution, who are fleeing terrible situations, is not a crisis,” Psaki told reporters.

Biden and his team had a mixed message at the outset of the border woes, saying the border was closed but that unaccompanied children would be given care.

Psaki said the Biden administration has placed 17,118 radio ads in Spanish, Portuguese and 6 indigenous languages to discourage U.S.-bound migration from Central America and Brazil. She said 589 digital ads have also been placed.

Mexico has beefed up law enforcement at its southern border to stem a sharp increase in migrants entering the country to head for the United States.

“The main issue to discuss will be cooperation for development in Central America and the south of Mexico, as well as the joint efforts for safe, orderly and regular migration,” Roberto Velasco, the top official at the Mexican foreign ministry for North America, said on Twitter.

Representatives of the Economic Commission for Latin America and the Caribbean will also attend the meeting, Velasco said.

(Reporting by Daina Beth Solomon and Steve Holland; Additional reporting by Matt Spetalnick; Editing by Frank Jack Daniel and Alistair Bell)

U.S. plans to send four million doses of AstraZeneca vaccine to Mexico, Canada

By Jeff Mason

WASHINGTON (Reuters) – The United States plans to send roughly 4 million doses of AstraZeneca’s COVID-19 vaccine that it is not using to Mexico and Canada in loan deals with the two countries, an administration official told Reuters on Thursday.

Mexico will receive 2.5 million doses of the vaccine and Canada will receive 1.5 million doses, the official said.

“This virus has no borders,” the official told Reuters on condition of anonymity. “We only put the virus behind us if we’re helping our global partners.”

The Biden administration has come under pressure from allies worldwide to share vaccine, particularly from AstraZeneca, which is authorized for use in other countries but not yet in the United States.

AstraZeneca has millions of doses made in a U.S. facility, and has said that it would have 30 million shots ready at the beginning of April. The company’s shares rose slightly on the news.

The deal to share the vaccine, which is still being finalized, does not affect President Joe Biden’s plans to have vaccine available for all adults in the United States by the end of May, the official said. The deal is likely to be announced publicly in the coming days.

Two officials said the vaccine would be delivered in “short order” once the deal was completed, but they declined to give a more specific timetable.

The “releasable” vaccines are ready to be used once they arrive. Under the deal, the United States will share doses with Mexico and Canada now with the understanding that they will pay the United States back with doses in return. The official said that would take place later this year.

The United States had no plans to share the vaccine with other countries at this time, he said.

“They are our neighbors, they are our partners,” the official said about Mexico and Canada. Mexican President Andres Manuel Lopez Obrador had requested the vaccine previously.

Biden has said if the United States has a surplus of vaccine, it will share it with the rest of the world.

The official noted that the United States has pledged $4 billion to the COVAX vaccine facility that aims to deliver coronavirus vaccines to poor countries.

(Reporting by Jeff Mason; Editing by Heather Timmons and Alistair Bell)

Pandemic picking up speed in half of the Americas: PAHO director

By Anthony Boadle

BRASILIA (Reuters) – New coronavirus cases are picking up again in half of the countries in the Americas, the Pan American Health Organization (PAHO) said on Wednesday, calling on Brazil to protect its people in the face of record infections and deaths.

Brazil is now reporting the highest number of new infections in the region, PAHO director Carissa Etienne said. Several areas of Brazil are witnessing record-high infections, and hospital beds are nearly at capacity across more than half of Brazilian states.

Brazil on Tuesday reported a record 2,841 deaths in 24 hours, as the incoming health minister pledged to continue the controversial policies of far-right President Jair Bolsonaro, who has downplayed the severity of the disease.

“The situation in Brazil is a cautionary tale that keeping this virus under control requires continuous attention by public health authorities and leaders to protect people and health systems from the devastating impact of this virus,” Etienne said.

According to a Reuters tally, Latin America has recorded around 22.9 million coronavirus cases, and 722,000 deaths, almost double the toll of Asia and Africa combined.

The news out of North America was mixed as the vaccine rollout in the United States gained momentum. The United States and Mexico are reporting a drop in new infections, though cases in Canada are accelerating, particularly among young adults ages 20 to 39, Etienne said.

But she said vaccines are limited and supplies face a bottleneck, with only two manufacturers providing shots through the World Health Organization and Gavi coalition’s COVAX facility to provide equitable access for poorer nations.

So far, nearly 138 million doses of COVID-19 vaccines have been administered in the Americas, although just 28 million of those shots were given in Latin America and the Caribbean.

New infections are decelerating in the Caribbean, but some islands are seeing the number of COVID-19 deaths double, she said.

Cases were rising in Uruguay, Ecuador and Venezuela in the last week, while Paraguay’s health system issued an urgent warning as hospitals filled up with COVID-19 patients, Etienne said.

(Reporting by Anthony Boadle; Editing by Franklin Paul and Bill Berkrot)

Mexico leans on China after Biden rules out vaccines sharing in short term

MEXICO CITY (Reuters) – Mexico is turning to China to fill a vaccine shortfall with an order for 22 million doses, Foreign Minister Marcelo Ebrard said on Tuesday, a week after U.S. President Joe Biden ruled out sharing vaccines with Mexico in the short term.

President Andres Manuel Lopez Obrador spearheaded efforts to attain more help from China, Ebrard said.

“As a result of a process personally led by the president of the republic, we have received the confirmation that we will have an expansion of up to 22 million doses,” Ebrard said during Lopez Obrador’s regular news conference.

Mexico’s vaccine roll out has been criticized as overly slow, though officials say they’ve been hampered by delays in receiving vaccines amid global shortages.

The Biden administration appeared to have turned down Lopez Obrador’s request, at least in the short term, for the United States to share its vaccines by saying the immediate priority is to inoculate American citizens.

Mexico is now pinning its hopes on receiving some vaccines from the United States once Biden meets his goal of inoculating 100 million Americans in 100 days, a deadline due in late April.

Ebrard said Mexico has placed an order for an additional 10 million doses of China’s Sinovac COVID-19 vaccine to be delivered between May and July, on top of the 10 million already ordered, which are due to arrive between March and May.

Mexico will also order 12 million vaccine doses made by the state-backed China National Pharmaceutical Group (Sinopharm) once it has been approved by its health regulator, Ebrard added.

(Writing by Drazen Jorgic)

U.S. to give Americans COVID-19 vaccines before discussing sharing with Mexico: White House

By Steve Holland and Dave Graham

WASHINGTON/MEXICO CITY (Reuters) – The Biden administration on Monday downplayed the prospect of sharing coronavirus vaccines with Mexico, saying it is focused first on getting its own population protected against a pandemic that has killed more than 500,000 Americans.

The remarks by White House press secretary Jen Psaki came hours before Mexican President Andres Manuel Lopez Obrador is expected to ask U.S. President Joe Biden to consider sharing some of its COVID-19 vaccine supply.

“The administration’s focus is on ensuring that every American is vaccinated. And once we accomplish that objective we’re happy to discuss further steps,” Psaki said at a White House news conference.

The two leaders are due to hold a virtual meeting later on Monday that is also likely to encompass immigration and trade.

Biden has predicted the United States will have enough supply by late July to inoculate all Americans. U.S. authorities have administered 76.9 million doses to date, according to the U.S. Centers for Disease Control and Prevention, enough for 23% of the population to get the two doses recommended for full protection under the vaccines that have been deployed so far.

Mexico has vaccinated roughly 2.5 million doses so far, enough for about 1% of the population, according to data compiled by Reuters. Officials have been frustrated by bottlenecks in supply and raised concerns that wealthy countries are hoarding vaccines.

According to Reuters reporting, Mexico would aim to pay back Washington once pharmaceutical companies have delivered on their orders.

Mexican magazine Proceso said Lopez Obrador had asked Biden for help on vaccines in January.

“We’d like to get an answer on a request that we’ve already made … about the vaccines,” Lopez Obrador told a regular news conference on Monday. “Provided he’s of the view the matter should be addressed. We must be respectful.”

IMMIGRATION AND ENERGY

Immigration, security, climate change and the United States-Mexico-Canada Agreement (USMCA) trade deal were also likely to feature in talks, said Lopez Obrador, a left-wing nationalist.

Mindful of pressure to curb unlawful immigration, Lopez Obrador said on Saturday he wants Biden to help secure U.S. work permits for Mexicans and Central Americans, saying the United States needed another 600,000-800,000 workers.

On Monday, Lopez Obrador said he wanted to broker an agreement that covered all kinds of workers, including “professionals.”

The two leaders could also discuss Lopez Obrador’s efforts to strengthen a state-run electricity utility, the Comision Federal de Electricidad (CFE).

The Mexican president has cast the legislation as a matter of national sovereignty, arguing that past governments skewed the electricity market in favor of private operators.

Business groups have condemned the bill, saying it risks violating the USMCA and endangers Mexico’s renewable energy targets because it puts wind and solar generators at a disadvantage against the CFE, a heavy user of fossil fuels.

(Reporting by Dave Graham, Steve Holland and Alexandra Alper; Additional reporting by Nandita Bose and David Alire Garcia; Writing by Andy Sullivan; Editing by Giles Elgood and Aurora Ellis)

First asylum-seekers from Mexico’s Matamoros border camp enter U.S.

MEXICO CITY (Reuters) – U.S. officials on Thursday brought a first group of people from the Matamoros migrant camp at Mexico’s border with Texas into the United States, where they will be allowed to carry out their asylum applications, migrant rights organizations said.

Some camp residents have lived there for more than a year under former President Donald Trump’s Migrant Protection Protocols (MPP) program requiring asylum seekers to wait in Mexico for U.S. court hearings.

President Joe Biden’s administration has said a new process will gradually allow thousands of MPP asylum seekers to await courts’ decisions within the United States, and some migrants last week were permitted to cross into San Ysidro, California.

The International Organization for Migration (IOM) said 27 migrants crossed the bridge from Matamoros into Texas on Thursday morning.

Francisco Gallardo, who runs a migrant shelter in Matamoros and provides humanitarian aid at the camp, welcomed the news but said the transfer of asylum-seekers to the United States should have come sooner.

“It’s good that they are doing it, but unfortunately coming late,” he said.

Freezing temperatures at the U.S.-Mexico border had made the Matamoros camp a priority, the Department of Homeland Security said on Wednesday.

Mexico’s migration institute did not immediately respond to a request for comment.

(Reporting by Lizbeth Diaz and Daina Beth Solomon; Editing by Frances Kerry)

U.S. extends travel restrictions at land borders with Canada, Mexico through March 21

By David Shepardson and Ted Hesson

WASHINGTON (Reuters) – U.S. land borders with Canada and Mexico will remain closed to non-essential travel until at least March 21, the one-year anniversary of the restrictions to address COVID-19 transmission concerns, the U.S. government said Friday.

The new 30-day extension is the first announced under President Joe Biden and comes as the White House has been holding meetings about potentially tightening requirements for crossing at U.S. land borders in North America, officials said.

Canada has shown little interest in lifting the restrictions and recently imposed new COVID-19 testing requirements for some Canadians returning by land crossings.

On Jan. 26, the U.S. government began requiring nearly all international air travelers to get negative COVID-19 test results within three days of travel, but has no similar requirements for land border crossings.

In an executive order issued last month, Biden directed U.S. officials to “immediately commence diplomatic outreach to the governments of Canada and Mexico regarding public health protocols for land ports of entry.”

It added U.S. agencies should submit a plan to Biden within 14 days “to implement appropriate public health measures at land ports of entry.”

“The plan should implement CDC (U.S. Centers for Disease Control and Prevention) guidelines, consistent with applicable law, and take into account the operational considerations relevant to the different populations who enter the United States by land,” it said.

Biden also directed a similar review of sea travel and to “implement appropriate public health measures at sea ports.”

(Reporting by David Shepardson and Ted Hesson, Editing by Franklin Paul and Bill Berkrot)

U.S. begins admitting asylum seekers blocked by Trump, with thousands more waiting

By Mimi Dwyer and Ted Hesson

SAN DIEGO, Calif. (Reuters) – The United States will on Friday begin rolling back one of former President Donald Trump’s strictest immigration policies, allowing in the first of thousands of asylum seekers who have been forced to wait in Mexico for their cases to be heard.

President Joe Biden pledged while campaigning to immediately rescind the Trump policy, known as the Migrant Protection Protocols (MPP). Under the program more than 65,000 non-Mexican asylum seekers were denied entry and sent back across the border pending court hearings. Most returned home but some stayed in Mexico in sometimes squalid or dangerous conditions, vulnerable to kidnapping and other violence.

Now they will be allowed into the United States to wait for their applications to be heard in immigration courts. The effort will start slowly, with only limited numbers of people being admitted on Friday at the port of entry in San Ysidro, California.

It will expand to two additional ports of entry in Texas, including one near a migrant encampment in Matamoros, Mexico, in the coming week, according to a U.S. Department of Homeland Security spokeswoman.

The administration estimates that only 25,000 people out of the more than 65,000 enrolled in MPP still have active immigration court cases and is set to begin processing that group on Friday. But it has cautioned that the efforts will take time.

Biden officials say they expect eventually to process 300 people per day at two of the ports.

The Biden administration is treading carefully, wary that the policy shift could encourage more migrants to trek to the U.S.-Mexico border. U.S. officials say anyone who seeks to enter and is not a member of the MPP program will be immediately expelled.

A group of Republican lawmakers sent a letter to Biden on Feb. 10 that said allowing MPP migrants to enter the United States “sends the signal that our borders are open.”

The United States, Mexico and international organizations have scrambled in recent days to figure out how to register migrants online and by phone, transport them to the border, test them for COVID-19 and get them to their destinations in the United States, people familiar with the effort said.

The fast-moving process and lack of information from U.S. officials has frustrated some advocates eager to assist the effort.

The situation has taken on urgency as a winter storm has brought frigid temperatures to much of the southern United States and northern Mexico.

Migrants in the sprawling Matamoros encampment have reported children and families struggling to stay warm in makeshift tents lacking insulation or other protection from the cold. The camp has grown in recent weeks as migrants anticipate the end of the MPP program, but DHS has said that processing will not begin there until Feb. 22.

On Thursday, Honduran asylum seeker Antonia Maldonado served hot chocolate from a steaming pot on a stove made from the inside of a washing machine to other asylum seekers in Matamoros shivering in the near freezing weather.

She has been taking goodbye photographs and making plans to leave with her partner, Disón Valladares, a fellow asylum seeker she met on the journey to Matamoros.

“He wants me to go first, and I want him to go first,” she said. They are hopeful that once they enter the United States they will be able to marry.

Those seeking asylum may not have their cases resolved for years due to COVID-related immigration court closures and existing backlogs, according to Aaron Reichlin-Melnick, policy counsel at the pro-immigrant American Immigration Council.

The delay would give the Biden administration time to reverse some Trump policies that sought to make it harder to obtain asylum, he said.

In the meantime, migrants will be released to the United States and enrolled in so-called “alternatives to detention” while awaiting their hearings, a U.S. official said last week. Such programs can include check-ins with immigration authorities as well as ankle bracelet monitoring.

(Reporting by Mimi Dwyer in Los Angeles, Ted Hesson in Washington and Laura Gottesdiener in Matamoros, Mexico; Editing by Ross Colvin and Daniel Wallis)

Texas energy freeze stretches to sixth day, raises Mexico’s ire

By Jennifer Hiller

HOUSTON (Reuters) – Texas’s freeze entered a sixth day on Thursday, as the largest energy-producing state in the United States grappled with massive refining outages and oil and gas shut-ins that rippled beyond its borders into neighboring Mexico.

The cold snap, which has killed at least 21 people and knocked out power to more than 4 million people in Texas, is not expected to let up until this weekend. The deep freeze has shut in about one-fifth of the nation’s refining capacity and closed oil and natural gas production across the state.

The outages in Texas also affected power generation in Mexico, with exports of natural gas via pipeline dropping off by about 75% over the last week, according to preliminary Refinitiv Eikon data.

Texas Governor Greg Abbott directed the state’s natural gas providers not to ship outside Texas and asked state regulators to enforce that ban, prompting reviews.

The state’s electrical grid operator, ERCOT, was trying to restore power as thermal generators – those powered by natural gas, coal and other fuels – lost the capability to provide power as valves and pipes froze.

It is unclear whether Abbott or regulators will be able to enforce a ban on interstate or cross-border shipments. Abbott’s request to the Texas Railroad Commission, the state’s oil and gas regulator, set up a game of political football, according to a person familiar with the matter, between groups that do not have the authority to interfere with interstate commerce.

Texas exports gas via pipeline to Mexico and via ships carrying liquefied natural gas (LNG) from terminals in Freeport and Corpus Christi. It also supplies numerous regions of the country, including the U.S. Midwest and Northeast.

The ban prompted a response from officials in Mexico, as U.S. gas pipeline exports to Mexico fell to 4.3 billion cubic feet per day on Wednesday, down from an average over the past 30 days of 5.7 billion, according to data from Refinitiv.

The Mexican government called the top U.S. representative in Mexico on Wednesday to press for natural gas supplies as power cuts there have hit millions of residents.

While the storm is moving out of Texas, freezing temperatures remain and refining operations in particular might take days, if not weeks, to resume.

“The oil and gas industry is finally getting some power into these fields. The Delaware Basin is getting back online and gas is starting to move out of it,” Christi Craddick, Texas railroad commissioner, said on Wednesday night during an emergency meeting.

Nonetheless, U.S. West Texas Intermediate (WTI) crude futures were near their highest since Jan. 8, 2020. Natural gas futures hovered near a three-month peak. Next-day prices at Waha hub in the Permian basin in West Texas eased from all-time peak of $209.75 per mmBtu.

BIG OPERATIONS IN TEXAS

Texas is the nation’s biggest fossil fuel energy producer, but its operators, unlike those in North Dakota or Alaska, are not used to frigid temperatures.

The state accounts for roughly one-quarter of U.S. natural gas production. As of Feb. 10, Texas was producing about 7.9 billion cubic feet per day, but that fell to around 2 billion on Wednesday, according to Refinitiv Eikon data.

Overall U.S. natural gas output also slumped to the lowest level since January 2017. One billion cubic feet of gas can supply about 5 million U.S. homes per day.

About 4 million barrels of daily refining capacity has been shuttered and at least 1 million barrels per day of oil production is also out.

The Houston Ship Channel, a key export waterway, was shuttered again on Wednesday evening, but that was because refineries were not loading enough vessels and not due to the weather, a Houston Pilots dispatcher said.

“We have two departures at 09:30 (local time) this morning and two inbound vessels who are waiting for the water levels to come up,” the dispatcher said.

Next-day power for Thursday at the ERCOT North hub, which includes the cities of Dallas and Fort Worth, were mired near a record high of $8,800 per MWh hit in the last session. Prices were below $50 per MWh before the cold blast.

(Reporting by Jennifer Hiller and Gary McWilliams in Houston; additional reporting by Marianna Parraga and Diego Ore in Mexico City and Scott DiSavino in New York; editing by Richard Pullin and Jonathan Oatis)