2026

WAIALUA, Hawaii (AP) — The reddish-brown mud that smothered Bok Kongphan’s Hawaii farm has hardened in the tropical sun. Irrigation tubes lie in a tangle where his lemongrass, cucumber and okra once flourished.

His niece, Jeni Balanay, lost her crops too — a mustardy green called choy sum, bitter melon, tomato. The leaves of her recently planted banana, coconut and mango have gone yellow, the trees unlikely to survive.

Across Oahu’s North Shore, an area famed for its big-wave surfing, the small farms that help supply the island’s food are struggling after back-to-back storms in March brought the state’s worst flooding in two decades. Officials are pleading with farmers not to give up, stressing that local agriculture is crucial for the isolated archipelago.

“In some cases entire farms have been wiped out,” said Brian Miyamoto, executive director of the Hawaii Farm Bureau. “These are farmers who were just days or weeks away from harvesting and now they have to start over.”

According to data collected by farming advocates, more than 600 of Hawaii’s 6,500 farms reported nearly $40 million in damage, including to crops, livestock and machinery. But Miyamoto said the farm bureau estimates that the full extent of the destruction is much broader — $50 million at close to 2,000 farms.

For most of the late 19th and 20th centuries, plantation-style agriculture dominated Hawaii, as companies like Dole and conglomerates founded by missionary descendants grew immense fields of sugarcane or pineapple for export. The operations drew large numbers of immigrants, primarily from Asia and Portugal.

But that large-scale monoculture faded by the 1990s amid international competition, and officials began to promote smaller farms — some, like Kongphan’s, just a few acres — with a wider array of crops that could be sold to local grocery stores or at farmers markets.

Worldwide shipping disruptions during the COVID-19 pandemic reinforced the importance of having a local food supply in Hawaii, and the state in recent years has offered additional support to the farms. That includes money for infrastructure, a farm-to-school program and loans for those who have been denied credit from banks.

But they still face challenges. Unlike many of their counterparts on the mainland, Hawaii farms are often too small and diversified to be able to afford or qualify for crop insurance.

Many of the farmers are immigrants who were barely eking out a living even before the storms, Miyamoto noted.

The majority of Hawaii’s farms report less than $10,000 in annual sales, according to the U.S. Department of Agriculture. The flooding, along with high winds and power outages, killed or stressed livestock and destroyed equipment, vehicles and infrastructure.

Without insurance, Kongphan, an immigrant from Thailand, has been trying to obtain government aid and figure out how to level earth moved by the floodwaters. His niece has been helping him and other Thai farmers navigate the process. Available help includes federal disaster relief, one-time $1,500 emergency grants and long-term loans from the state, and a charitable fund that raised about $850,000 in the weeks after the floods. Many farmers also have online fundraising pages.

In an interview interpreted by Balanay, Kongphan called the floods “very devastating,” but said he will continue working the 5-acre (2-hectare) plot he’s leased for five years, growing vegetables he sells at farmers markets, a swap meet, and at shops and stalls in Honolulu’s Chinatown.

Kongphan pointed to a faint, thigh-high line on a plywood wall showing where the water reached inside his home, which he built from a shipping container. Inside, there’s now a donated tent, but he usually sleeps outside.

Flies swarmed as he carried a dirt-caked generator he hopes to salvage. Nearby sat a Toyota Yaris, covered inside and out in the same dried sludge.

Balanay, who learned farming from her mom after the family immigrated to Hawaii, isn’t sure she wants to keep at it. She recalled the torrent rising to her waist in seconds and wiping out her crops in the middle of the night.

“Will it happen again?” she asked. “When you look at the land and it’s all destroyed, you want to give up.”

The flooding is the latest crisis for Hawaii’s farmers, on top of wildfires, pests and volcanic tephra — ash and debris ejected by an erupting Big Island volcano, said the state’s top agriculture official, Sharon Hurd.

“These are the farms that we really need to get started again,” Hurd said. “We cannot have them give up.”

Officials have been conducting tests to assure farmers that their soil is safe and providing them with seeds and plant starts, she said.

Some farmers have been unable to make it to farmers markets, a key source of their income. Many who do have less to offer, Miyamoto said.

Farmer Kula Uliʻi said her family has been bringing roughly one-quarter of their usual output. Instead of 200 pounds (90.7 kilograms) of tomatoes at weekend farmers markets, they might sell 60 pounds (27.2 kilograms).

They lost starts that were due to be planted this month and face months of limited harvest, she said. She’s unsure about the status of her farm’s contracts with grocery stores, given that it can’t meet demand.

Even the taro, which thrives in water, is lost, she said, after it was submerged in the contaminants carried by the floods.

“It’s all gone,” Uliʻi said. “We can’t use any of it.”

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Associated Press writer Audrey McAvoy in Honolulu contributed.

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SEOUL, May 17 (Reuters) – South Korea will pursue all options, including emergency arbitration, to avoid a labour strike at the country’s biggest employer Samsung Electronics and to minimise any damage if one does occur, its prime minister said on Sunday.

The world’s largest memory chip maker and its South Korean labour union will resume pay talks on Monday with a government mediator, in a move that could ease concerns over a potentially disruptive strike at the tech giant that accounts for nearly a quarter of the country’s exports. 

“Just one day of suspension at Samsung Electronics’ semiconductor factory is expected to incur direct losses of as much as 1 trillion won ($667.68 million),” Prime Minister Kim Min-seok said after an emergency meeting with ministers on Sunday. 

“What is more concerning is that a temporary pause on semiconductor manufacturing lines leads to months of inactivity,” Kim said, adding there were worries about economic damage ballooning to as much as 100 trillion won if materials had to be disposed of due to a strike.

An emergency arbitration order, which can be invoked by the labour minister if the country deems a dispute is likely to harm the economy or daily life, immediately prohibits industrial action for 30 days while the National Labor Relations Commission conducts mediation and arbitration.

It has rarely been invoked and would represent an extraordinary step for a union-friendly administration.

The union said on Sunday it would not give in to pressure on arbitration and would not agree to a pay deal should the company offer a less favorable proposal.

Samsung accounts for 22.8% of South Korea’s exports and 26% of the domestic stock market, employing more than 120,000 people and working with 1,700 suppliers, Kim said. 

($1 = 1,497.7300 won)

(Reporting by Hyunjoo Jin, Heejin Kim and Jihoon Lee; Editing by William Mallard and Jamie Freed)

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By Suzanne McGee

PROVIDENCE, Rhode Island, May 17 (Reuters) – Investors are warning that lofty U.S. stock markets have not yet priced in the risk of rocketing inflation and are vulnerable to a sharp spike in bond yields.

Equity markets have been propelled by robust first-quarter earnings and expectations of boosts from artificial intelligence, overshadowing the risk of high energy prices and the lack of a conclusion to the war with Iran.

But a spike in bond market yields over the past week – which took the 30-year Treasury bond above 5% and benchmark 10-year bonds above 4.5% – could change the picture for investors. That caused stock market caution on Friday.

Paul Karger, co-founder and managing partner of TwinFocus, who manages money for ultra-high net worth families, said his clients are bombarding him with questions every time he meets with them about how to make sense of the apparent market paradox.

“Breakfast, lunch and dinner: the question is always about how to make sense of the fact that this is such a divided outlook,” with earnings telling a positive story but oil prices and inflation emerging as a negative for companies, Karger said.

Karger has what he calls a “barbell” approach to assets he manages: accumulating big overweight positions in cash, gold and other commodities, while maintaining positions in the market-leading mega-cap growth stocks.

After an initial swoon following the start of the U.S.-Israeli war with Iran in late February, U.S. stock indexes have mounted a sharp rebound. The benchmark S&P 500 was last up more than 17% since its low for the year in late March, giving it a year-to-date gain of over 8% – even with Friday’s pullback of nearly 1%.

Rising benchmark yields tend to put pressure on equity valuations, as companies and consumers will face higher borrowing costs. This can also weigh on economic growth and corporate profits, while possibly making bond returns more competitive with stocks.

That may especially be the case now with the stock market at elevated levels. The benchmark S&P 500 as of Thursday was trading at 21.3 times earnings estimates for the next 12 months, according to LSEG Datastream. That is well above the index’s long-term average forward P/E ratio of 16, although it is below the 23.5 level it reached in October, as the strengthening U.S. earnings outlook has helped to keep valuations somewhat in check.

“I do think there is a real fear that inflation is kind of embedded in the economy going forward,” said Peter Tuz, president, Chase Investment Counsel, in Charlottesville, Virginia. “You don’t see any signs of it going down right now, and that is a real fear, and it will drive the market down if it continues.”

Jack Ablin, chief market strategist at Cresset Capital, said if there is a delay of even a few months in reopening the Strait of Hormuz to both oil and liquefied natural gas (LNG) tankers as well as other commercial shipping, the result could be “a brand new inflation regime for which investors just aren’t prepared.”

EARNINGS ROSY

The reason equity markets remain robust, portfolio managers say, is earnings. U.S. publicly traded corporations are delivering first-quarter profits that are significantly above expectations and on track to be some 28% higher than a year ago, the largest jump seen since late 2021.

“We’re seeing the impact of the AI spending boom and (a related) increase in productivity,” said Jeremiah Buckley, a portfolio manager at Janus Henderson, which could extend into 2027, he added.

The latest wave of artificial-intelligence market enthusiasm has buoyed stocks including semiconductors. Massive capital spending on data centers and other AI-related infrastructure boosted chip demand. Still, lofty valuations in AI-related sectors are also causing some to forecast a pullback.

Also underpinning equity markets is fear of being left on the sidelines.

“Traders don’t want to turn bearish if there is a possibility — as many think — that the Strait of Hormuz situation could be cleared up in just a few weeks’ time,” said Tim Murray, capital markets strategist at T. Rowe Price.

RISKS SKEWED

However, investors are becoming increasingly aware of the risks – and the potential shock to equities. The surge in the price of crude oil, still trading above $100 as uncertainty swirls around the temporary ceasefire between Iran and the United States, has propelled inflation fears. Producer prices saw their largest gain in four years in April.

“Markets aren’t braced for an ‘extreme’ scenario in the Iran war” of a prolonged Hormuz shutdown, John Higgins, chief economic adviser, financial markets at consultancy Capital Economics, warned his clients in a report published on Thursday. While Treasury markets are pricing in the inflation risk, equity markets are not doing the same with the prospect that a prolonged shutdown may take a toll on the growth that has supported profits.

The geopolitical crisis in the Persian Gulf and the inflation it may be causing has the potential for long-term damage.

“The Iran crisis has the potential to reshape the trajectory of the markets” for the rest of the year, said Matthew Gertken, chief geopolitical strategist at BCA, a market analysis firm.

(Reporting by Suzanne McGee in Providence, Rhode Island; additional reporting by Caroline Valetkevitch and Lewis Krauskopf; editing by Megan Davies and Nick Zieminski)

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