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European Virgin Olive Oil Exports Expand with Booming Supplies from Greece and Italy

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Archives, Global Trade Daily, Imports/Exports, News

European Virgin Olive Oil Exports Expand with Booming Supplies from Greece and Italy

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IndexBox has just published a new report: ‘EU – Olive Oil (Virgin) – Market Analysis, Forecast, Size, Trends and Insights’. Here is a summary of the report’s key findings.

European virgin olive oil exports soared by +11% y-o-y to 1.5M tonnes or $5.2B in 2020. Spain remains the key virgin olive oil supplier in the EU, accounting for 56% of the total European exports in physical terms. Greece and Italy have significantly strengthened their positions in terms of exports, ramping up the volume of supplies abroad. Greece emerged as the fastest-growing European exporter in 2020. The average price for virgin olive oil in the EU dropped by -6.3% y-o-y last year to $3,370 per tonne. 

Virgin Olive Oil Exports in the EU

Virgin olive oil exports totaled 1.5M tonnes in 2020, growing by +11% on 2019 figures. In value terms, virgin olive oil exports rose by +3.7% y-o-y reached $5.2B (IndexBox estimates) in 2020.

Spain was the main exporter of virgin olive oil in the EU, with the volume of exports reaching 853K tonnes, which was near 56% of total exports in 2020. It was distantly followed by Italy (311K tonnes), Portugal (177K tonnes) and Greece (165K tonnes), together comprising a 43% share of total exports.

Spain experienced a relatively flat trend pattern with regard to the volume of exports. At the same time, Greece (+71.3%), Italy (+22.7%) and Portugal (+11.4%) displayed positive paces of growth. Greece emerged as the fastest-growing European exporter exported in 2020.

In value terms, Spain ($2.5B), Italy ($1.4B) and Portugal ($571M) were the countries with the highest levels of exports in 2020, with a combined 87% share of total exports. Greece lagged somewhat behind, comprising a further 10%.

In 2020, the virgin olive oil export price in the EU amounted to $3,370 per tonne, dropping by -6.3% against the previous year. Prices varied noticeably by the country of origin; the country with the highest price was Italy ($4,481 per tonne), while Spain ($2,960 per tonne) was amongst the lowest. In 2020, the most notable rate of growth in terms of prices was attained by Spain, while the other leaders experienced a decline in the export price figures.

Source: IndexBox Platform

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Archives, Global Logistics, Global Trade Daily, International Trade

Procurement Evolved: The New Characteristics of Post-Pandemic Procurement

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The pandemic challenged every business function to change how it operates and adapt to a new normal. For some, those changes have already been reversed. But for procurement, there’s no going back.

The COVID-19 pandemic forced virtually every business function to change how it worked, step into new roles, and adapt to extremely challenging market and operational conditions. For many of those functions, those changes – while significant – were short-term, and designed to help them weather the storm.

But, for procurement teams, the pandemic has accelerated evolution for the function – one that was already well underway before COVID-19 hit. It propelled the function’s journey from ‘back office spend optimizer’ to ‘strategic value creation all-star’. And now, there’s no going back.

Over the past 18 months, leading procurement functions have stepped up to deliver business value far beyond simple cost savings and margin optimization. Not surprisingly, their organizations want them to keep delivering it.

As a result, we’re seeing a new kind of procurement function emerge from the pandemic. It’s a stronger, more empowered function, characterized by three key evolutions:

Evolution #1: From reactive damage mitigator to proactive risk expert

Procurement has always been strong in times of crisis. But, in the past, teams have been restricted by the historical pricing, demand and trend data available to them. That retroactive insight meant that procurement teams were always looking for the best ways to react to a crisis, rather than sidestepping emerging threats proactively.

Thanks to recent advances in analytics and intelligence capabilities, as well as the emergence of sophisticated insight-delivery solutions, the crisis events of the last 18 months have given us our first real opportunity to see the power of proactive crisis insight in action.

Procurement teams empowered with these capabilities were able to identify the early indicators of major supply chain disruptions and take proactive actions to safeguard against them. They shifted between suppliers, sourced from new geographies, and rebuilt entire category strategies to ensure that their companies could continue operating as conditions worsened.

But business continuity was just the beginning of the benefits seen by these teams. Because they were able to watch these trends emerging, leading procurement teams were able to map and understand the potential impacts of each crisis on the business and provide valuable input for crisis management and risk mitigation.

Evolution #2: From supply administrator to strategic innovation driver

During the pandemic, supplier relationships have been more valuable and important than ever. At the peak of the disruption, the right relationship with a strategic supplier could mean the difference between business as usual and completely halting operations.

Leading procurement teams have been building high-value relationships with suppliers for decades, but the events seen in 2020 and 2021 were a powerful opportunity to showcase their value to the rest of the organization. As a result, organizations are now more interested than ever in the other great ways that procurement teams can create value from these relationships.

Exclusive contracts negotiated with suppliers, for example, are a valuable asset for supporting innovation. Through the contracts they help create, procurement teams can build partnerships that have a huge impact on overall business strategy, bringing new USPs into the organization.

As the first point of contact for suppliers, nobody in the business knows what’s happening with those suppliers better than your procurement team. That means they’re exposed to things like new products, new materials, new capabilities, and new offerings before anyone else, all of which can be used to drive commercial, product, and innovation strategies.

The leading teams of today aren’t just filling orders and signing invoices for suppliers – they’re partnering with them strategically. Now, businesses are waking up to the implications that have for innovation, and harnessing procurement teams’ potential as innovation drivers.

Evolution #3: From data comber to action-oriented all-star

Procurement experts can spend hours sifting through data to identify trends that might impact the commodities, markets, and suppliers they depend on. That’s admirable and has delivered immense value to businesses. But today, it’s not necessarily the best use of the procurement team’s time.

In recent years, sophisticated insight and intelligence solutions have transformed how procurement teams gather, consume, understand, and act on commodity and market intelligence. And once again, the pandemic has proven to be a powerful test of how those capabilities support teams and enable value creation in times of crisis.

At a time when every second counted, procurement teams saw immense value from those solutions and put them to use to act faster and stay ahead of competitors who were facing the same challenges and choices.

Take Nomad Foods, for example. When the pandemic first struck, it used intelligence solutions from The Smart Cube to quickly understand the potential impact on key categories and adjust its supplier portfolio to keep the business on track. But, because the team was able to act so fast, they were also able to look beyond ensuring continuity and identify an opportunity to create value and reduce waste amid the disruption.

The team identified that the closure of many restaurants and hospitality businesses would have a massive impact on many food categories and create significant short-term oversupply of many ingredients. By spotting this opportunity early, Nomad Foods was able to act before competitors and optimize its category strategy at a time when many other businesses were struggling to keep their doors open.

Numerous stories like this have emerged from the pandemic. Together they’ve helped organizations understand that the modern procurement function is able to deliver the greatest value when it’s empowered with timely, actionable insights enabled via the right tools and technologies, rather than having to generate those insights manually.

_______________________________________________________________________

Omer is a co-founder of The Smart Cube and leads the firm’s business across The Americas. He works with Procurement and Strategy leaders at global organizations, transforming their teams to become value-driven and insight-led. Omer has more than 30 years of management consulting, global corporate and industry experience across North America, Europe and Asia. His prior roles include A.T. Kearney (North America), Warner Lambert (USA) and The Perrier Group (Asia-Pacific). Omer has an MBA from the University of Michigan at Ann Arbor, USA, and a BBA from the University of East Asia.

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Archives, Global Trade Daily, International Trade

Troubles to Come: Glimpsing the Post-Pandemic Landscape for International Business Disputes

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Some eighteen months into the Covid-19 pandemic, the world continues to grapple with the immediate effects. Even in parts of the world that have achieved meaningful levels of vaccination, the rise of the Delta variant has lengthened both the pandemic itself, and the governmental countermeasures that result, and the parts of the world whose populations remain largely unvaccinated are still dealing with the first-order health and economic effects of the event.

The fact that the pandemic continues to have these effects, and is likely to continue well into 2022, counsels humility as we strive to discern the path forward for business. In the weeks after the onset of the pandemic, for instance, much of the international business world anticipated a wave of very substantial legal disputes arising out of the application of the law of force majeure to the event. But businesses proved to be adept at managing their way through those challenges, without allowing them to devolve into legal disputes and broken relationships. Thus, while there was a meaningful ripple of force majeure lawsuits and arbitrations, the expected wave did not materialize. It is certainly a cliché at this point, but as we endeavor to look forward, the one thing we can be certain of is that we will face further uncertainty.

Nevertheless, the future landscape for international business disputes, in litigation and arbitration, is starting to emerge, and we can venture some observations about what is already happening and some educated thinking about what is likely to follow. One thing stands out: The volume of international business disputes worldwide jumped in 2020. There are no official statistics for international lawsuits in US courts, but the leading arbitration institutions worldwide do publish statistics, and those show that the number of disputes committed to international arbitration in 2020 was up by 10%, which is well above the pre-pandemic trendline. Given that the pandemic likely stressed middle-market international businesses at least as much as it did larger companies, and that middle-market businesses are less likely to have arbitration clauses in place, it’s a fair bet that litigation of cross-border disputes have jumped as well.

This is no surprise – times of disruption tend to lead to more disputes. And given that the world is not yet even out of the pandemic, it’s reasonable to expect that this elevated incidence of international disputes – and thus elevated dispute risk for businesses – will continue for some time. In addition to the surge in disputes overall, practitioners are also seeing some specific developments in the kinds of cases that are being filed, and business and political developments that indicate what sorts of issues might come to the fore in the near to medium term as well.

International Business Disputes Already Arising

The Covid-19 pandemic has been the single largest force majeure event that has ever struck the international business community – larger than the Great Depression, larger than World War II, and larger than the oil shock of the 1970s or the 2009 financial crisis. It has affected virtually every business sector, to some extent or another, and the entire geography of the world. Thus, unsurprisingly, it has engendered serious business disputes across sectors and worldwide as well. Several such trends are already upon us:

Manufacturing, supply chain, and distribution

The onset of the pandemic in early 2020, for many businesses, brought with it an effective and immediate demand stop – not merely a downturn, but a near-complete stop. Others, meanwhile, saw an immediate demand surge. Combined with the immediate effects of the pandemic and governmental countermeasures, this led in very short order to disarray in logistics and supply chains, and in distribution channels. Overall, that shock eased over the course of the pandemic to date, and the parts of the world that are haltingly exiting from the pandemic are now experiencing marked demand amplification. Thus, even now, supply chains and distribution channels are now facing continuing whiplash, while some parts of the world are still stuck with serious impediments to consumer and business demand.

Disputes that were forestalled during the first year of the pandemic are now crystallizing into lawsuits and arbitrations, as temporary accommodations “sunset” and some supply chain participants simply fail. Businesses are still managing their way through, and there is not yet a massive wave of supply and distribution disputes, but they are now readily visible in the publicly filed cases and in discussions between businesses and their counsel and are likely to continue. Some are being presented as force majeure disputes and many others are presenting as simple breaches of contract or in insolvency proceedings. And now the same kinds of issues are also appearing in construction disputes, as the US and other real estate markets have heated up and international construction supply chains are stressed by the demand surge. Close surveillance of supply and distribution relationships thus remains important at this stage.

Corporate transactions

Another area that has seen a marked uptick in cases explicitly arising out of the pandemic has been in the corporate transactional deal space. There have been quite a few instances in which parties to prospective deals have invoked the pandemic, in one way or another, to forestall deal closings or to bail out of deals. These disputes have arisen often on the basis of Material Adverse Change or Material Adverse Event clauses, giving rise to substantial litigation and arbitration regarding the scope and applicability of these provisions. Given how the transactional space has taken off since the first stages of the pandemic, it appears that this development might be tailing off, at least in the parts of the world that are exiting the pandemic. But these cases will continue until the world is all the way out of this, and it’s also going to leave some other issues in its wake: The market is now seeing earn-out disputes related to the pandemic, for instance, and moving forward there are probably going to be novel “earn-out” disputes based on non-revenue, post-closing consideration benchmarks. The pandemic will also likely give rise to some novel valuation and damages disputes going forward, as parties dispute how to factor pandemic-era numbers into those measurements.

Tech transactions and intellectual property

Business and consumer adjustments to pandemic life have resulted in increased adoption of technology solutions of all sorts, in all areas of business, from communications solutions to supply and distribution management to business processes and CRM. This increased adoption of new technology solutions has been especially marked among middle-market companies, many of whom had been relatively late adopters prior to the pandemic.

This entails increased exposure to tech transaction disputes, which are still somewhat novel for many businesses. It also entails increased value of technology assets – both for a company’s own IP assets and for those that business license or acquire – and of company data. This in turn raises the stakes of disputes that do arise, and even further, increases the temptation for potential wrongdoers, inside or outside of the organization, to attempt improperly to “monetize” their access to these assets. Accordingly, there has been a marked uptick of IP, trade secret, and non-compete disputes, increasingly including cross-border disputes. And of course, the pre-pandemic trend toward more cross-border cybersecurity exposure and data protection compliance risk has only been accelerated by the increased adoption of tech solutions resulting from the pandemic. Businesspeople and in-house legal leaders thus must now have a working knowledge of their organizations’ entire suite of tech solutions, tech transactions, and the disputes that often arise out of them.

International Business Disputes On the Horizon

The sorts of international business disputes discussed above are likely to continue, both in the parts of the world that are closer to an exit from the pandemic and certainly in those that are further behind. But even the path out of the pandemic will be strewn with business disputes, many of which will be novel.

Insolvencies

Many if not most governments have reacted to the pandemic with massive fiscal support for consumers and for businesses. Some jurisdictions have also implemented legal supports, such as debt enforcement holidays and state declarations of force majeure in favor of their domestic businesses. As a result, the pandemic to date has featured remarkably fewer insolvencies than what the business community had feared at the outset. Chapter 15 filings in the US – that is, US insolvencies in aid of primary insolvency proceedings overseas – jumped by 68% in 2020, but insolvency filings worldwide remained steady in many jurisdictions and actually dropped substantially in many others. However, those fiscal and legal supports are now largely reaching their sunsets. Accordingly, a recent World Bank report has forecasted a substantial rise in insolvency proceedings worldwide in late 2021 and 2022, as “zombie” organizations lose fiscal and legal supports and fail to survive. Legal and business leaders thus should monitor the financial health of key counterparties, as well as supply and distribution behavior.

China

China was of course central to the supply chain story over the last year and a half. There was widespread disruption in business relationships involving China, but contested disputes ended up being fairly rare, in part because China managed to work their way through the pandemic speedily – and probably also because disputes with Chinese counterparties, often sited in China and/or requiring enforcement in China, can be a particularly unappealing prospect, even as business disputes go.

But those relationships remain under strain, especially when the Chinese supplier has its own upstream suppliers in jurisdictions that are still suffering from the pandemic, so again the risk isn’t gone.  And going forward, the movement toward supply chain diversification – “China plus one” – is continuing and now appears likely to become a secular trend, and is necessarily going to entail some increase in disputes involving Chinese vendors, as relationships are scaled back or ended altogether. Organizations pursuing supply diversification, particularly with regard to Chinese counterparties, should be planning well ahead for the management of those transitions and endeavoring to manage away from legal disputes within China.

Tax Structuring Changes in Light of the Prospective Global Minimum Tax

This final sort of upcoming cross-border disputes remains somewhat speculative, but it is likely to affect some meaningful fraction of cross-border businesses with operations overseas. This summer, the OECD and dozens of other countries agreed in principle to a global minimum corporate tax regime, in part as a “pay-for” for the huge fiscal outlays of the pandemic.

Many of the details of the GMT remain under development, and it is expected that most manufacturing and other “brick and mortar” operations are likely to be excluded from the regime. But it does appear likely that the GMT will cause substantial restructuring of multinational corporate presences, as the tax benefits currently enjoyed in some jurisdictions evaporate and inter-jurisdictional competition shifts to non-tax measures, such as tariffs and duties. Those restructurings will entail follow-on disputes, as local relationships are ended. Organizations facing potential exposure to the new GMT should begin planning now for the corporate restructurings that will necessarily follow because managing through the transition with minimal dispute risk will be a complicated and laborious task.

The Practice of International Business Disputes and Dispute Risk Management Moving Forward

Even prior to the pandemic, the practice of international arbitration had been moving toward more usage of remote videoconferencing, at least for procedural stages of arbitrations. With the pandemic, remote proceedings – which can result in substantial cost savings – are now being adopted for merits in arbitration, with witnesses appearing and testifying remotely. And even courts in many jurisdictions, including the US, are now regularly conducting procedural conferences remotely, if not yet trials. And the increased overall incidence of international business disputes, as a result of the pandemic, may be expected to further increase the adoption of international arbitration for the resolution of international business disputes, which is already the preferred practice of repeat users of international dispute resolution services and is even more valuable to organizations that encounter such disputes more sporadically.

The business world will exit from the pandemic era, haltingly and over time. But the sorts of international business disputes that have resulted from the event are likely to persist even after it has ended, and for some time to come. Dispute risk will follow. But that risk can be managed effectively, with diligent surveillance and monitoring of cross-border relationships, careful management of incipient disputes, and the use of experienced counsel and cost-saving measures such as arbitration and remote technology. These dispute risk management practices can help to ensure that organizations will enter the post-pandemic landscape with the least possible damage and the best possible competitive posture for the future.

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Archives, Global Trade Daily, International Trade

How to Strengthen Trade and Labor Compliance with Technology Amid Increasing Customs Enforcement

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Supply chain constraints, both expected and unexpected, continue to disrupt global trade and appear to be the new normal for the foreseeable future. As the world is slowly recovering from the pandemic and constraints in both materials and labor are creating unprecedented supply chain challenges, recent government actions are also generating often unexpected hurdles in the “last mile” such as unexpected delays and merchandise detentions.

The U.S., [1] Australia[2] and Germany[3] have recently proposed or enacted regulations or legislation aimed at ensuring companies take affirmative steps to prevent and eliminate forced labor in both their direct and indirect supply chains. As supply chains have grown more complex with additional tiers, the risk of exposure to potential human rights issues has grown as well. Importers subject to withhold release orders (WROs) often lack complete visibility into their full supply chain and regulators might not specify where their forced labor suspicions lie. This heightened risk is also driven, in part, by geopolitical tensions and global focus on environmental, social and governance (ESG) initiatives. A forced labor investigation may originate internally within the organization wanting to ensure a compliant supply chain, through non-governmental organization (NGO) reporting, or from a regulatory inquiry.

In the U.S., if Customs and Border Protection (CBP) receives information that “reasonably indicates” merchandise intended for importation contains any components that are the result of forced labor, the agency may detain the suspected merchandise at the port of entry under the authority of a WRO. While the specter of forced labor is a legitimate threat, the lack of a transparent process and ongoing trade disputes have led to concerns that WROs could be also used as political tools.

To combat allegations of the use of forced labor with regards to U.S. imported merchandise, the burden of proof is on the importer. If the importer can affirmatively demonstrate that the goods were not produced with forced labor, CBP may deem the merchandise admissible and release it. Importers must provide proof of admissibility, including a certificate of origin conforming to the template set out in 19 CFR §12.43(a), within three months of the importation.[4] While CBP provides scant guidance or information as to why merchandise is detained or how evidence of admissibility is evaluated, practical experience suggests that merely complying with the basic requirements for a certificate of origin and attestation as described in Part 12.43 will likely be an inadequate defense against the agency’s assertions.

To determine if a supply chain is plagued by forced labor activity, CBP uses the International Labor Organization’s 11 indicators of forced labor.[5]  After determining that there is sufficient evidence to suggest the presence of these factors, CBP allows evidence to refute the allegations and demonstrate admissibility. CBP suggests four general kinds of evidence that support admissibility to allow release of detained merchandise:[6]

1. Evidence refuting each identified indicator of forced labor;

2. Evidence that policies, procedures, and controls are in place to ensure that forced labor conditions are remediated;

3. Evidence of implementation and subsequent verification by an unannounced and independent third party auditor; and

4. Supply chain maps that specify locations of manufacturers, factories, farms, and processing centers.

However, CBP does not offer specific examples of the types of documents, records, reports or other due diligence that meet or exceed the subjective standard for release from detention. In the absence of sufficient examples of successful release in the public record, importers may struggle to develop appropriate or adequate compliance measures.

Further, despite the regulatory requirement for a “reasonable indication” that the subject merchandise contains forced labor, CBP has a history of issuing WROs covering broadly defined products, including finished goods and raw materials, originating from entire countries and regions, such as the palm oil industry in Malaysia, which has been the subject of labor compliance allegations for several years.[7],[8]

The number of CBP cargo detentions related to WROs increased by a factor of 27 in FY 2020 over FY 2019, from 12 to 324. Those detentions amounted to a total cargo value in excess of $55.5 million. The steep, upward trend in WRO enforcement has continued thus far in FY 2021 with year-to-date figures indicating 967 cargo detentions representing a total value of over $367 million, a three-fold increase in detentions and six times the import value over last fiscal year (with two months remaining in FY 2021).[9]

Importers caught unprepared have been unable to rebut the presumption of forced labor absent the appropriate evidence and compliance controls attentive to forced labor factors. Given the significant burden to prove the negative, coupled with increasing concerns over supply chain endurance, global companies should be highly motivated to engage with supply chain business partners that can support the required due diligence to defend against forced labor allegations.

Developing or improving trade and labor compliance procedures often requires a multifaceted and customized approach, especially when faced with an ever-changing enforcement landscape. In addition to traditional trade compliance measures such as documentation, due diligence and reasonable care, a robust labor compliance process will also benefit from a more modern, technology-based approach.

For example, blockchain and digital token technology can provide immutable certification throughout the supply chain, which can be independently verified by regulators or a credible third party to trace and validate the origin of materials and labor in addition to real-time logistics tracing. Blockchain solutions have been successfully implemented in similar contexts for supply chain and origin audits and inspections, cradle-to-grave supply chain tracing and global, product tracking to improve regulatory compliance as well as achieve time and cost efficiencies. A combined technology and regulatory approach to compliance can be tailored to improve the traceability of all aspects of the supply chain and designed to create an irrefutable, digital record of compliance. In addition to the regulatory compliance benefits of a traceable supply chain, blockchain demonstrates a company’s efforts to maintain transparency and accountability to its business partners, customers and other stakeholders.

Blockchain technology is often misunderstood. By engaging blockchain experts, organizations can overcome technical challenges and ensure the technology is developed as a unique solution fit for purpose, scale and cost benefits. Companies in an array of industries are implementing blockchain within their supply chains to increase efficiency and transparency.

For example, a global food and beverage company adopted blockchain technology to track its coffee products from bean to cup.[10] Another company implemented a blockchain solution built to trace a product’s travels across the supply chain—achieving insights within seconds, as compared its previous seven-day tracking cycle.[11] Similar applications of blockchain technology can be used to verify and document compliance throughout the supply chain, including validation of workforce compliance, and presented as evidence rebutting underlying allegations of a WRO or in support of the admissibility of merchandise.

Given increasing scrutiny of supply chains and in particular the focus on complete transparency with regards to eliminating forced labor, in addition to importers operating in industries already impacted by existing WROs, all companies should be evaluating their risk and exposure to commodities, regions and countries with a heightened risk of future action. Those who are proactive will maintain a competitive commercial advantage over those who chose to wait until their merchandise is detained and are forced to react to either agency action or public scrutiny over non-compliance.

Without implementing a combination of traceability technology throughout the supply chain and other tools such as third-party audits to ensure compliance, merchandise detained by CBP will not have sufficient documentation to rebut the presumption of a “reasonable indication” of forced labor, which could lead to devastating losses of merchandise, exorbitant storage fees while admissibility is assessed, forced export to non-U.S. markets or costly and protracted litigation. An innovative approach to proactive compliance, including modern technology-based solutions, could be the key to creating an objective record of due diligence in an otherwise subjective space.

________________________________________________________________

Nick Baker is a Senior Director within FTI Consulting. He assists clients with international trade matters including customs, import compliance, export controls and sanctions.

Steve McNew is a Senior Managing Director within FTI Consulting’s Technology segment, where he leads the Blockchain and Cryptocurrency practice. He provides strategic advice and expert services for companies looking to innovate with crypto assets and blockchain technology. 

[1] For example, Chapter 23 of the United States-Mexico-Canada Agreement addresses forced labor rights and compliance in the context of the trade agreement. 

[2] https://www.theguardian.com/australia-news/2021/aug/23/australian-senate-poised-to-pass-bill-banning-imports-made-using-forced-labour, last visited August 23, 2021.

[3] https://www.dw.com/en/german-bundestag-passes-new-law-on-supply-chain-ethics/a-57855174, last visited August 23, 2021.

[4] 19 C.F.R. §12.43(a)

[5] ILO Indicators of Forced Labour, International Labour Organization, October 1, 2012.  Available at, https://www.ilo.org/wcmsp5/groups/public/—ed_norm/—declaration/documents/publication/wcms_203832.pdf

[6] CBP Publication #1394-0321 “WRO Modification/Revocation Process Overview,” U.S. Customs and Border Protection.  Available at https://www.cbp.gov/sites/default/files/assets/documents/2021-Mar/Final_Modification%20Revocation%20Process%5B5%5D.pdf

[7] CBP Issues Detention Order on Palm Oil Produced with Forced Labor in Malaysia, U.S. Customs and Border Protection, September 30, 2020.  Available at https://www.cbp.gov/newsroom/national-media-release/cbp-issues-detention-order-palm-oil-produced-forced-labor-malaysia?_ga=2.188633131.201625649.1629736705-456710946.1628017266

[8] CBP Issues Detention Order on Palm Oil Produced with Forced Labor in Malaysia, U.S. Customs and Border Protection, December 30, 2020.  Available at https://www.cbp.gov/newsroom/national-media-release/cbp-issues-withhold-release-order-palm-oil-produced-forced-labor?_ga=2.201299117.201625649.1629736705-456710946.1628017266

[9] CBP Trade Statistics, published at https://www.cbp.gov/newsroom/stats/trade (last visited August 18, 2021). FY 2021 statistics current as of August 6, 2021.

[10] https://www.supplychainbrain.com/articles/31800-starbucks-customers-farmers-can-now-trace-their-coffee-with-blockchain

[11] https://www.hyperledger.org/learn/publications/walmart-case-study

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European Calcium Ammonium Nitrate Exports Grow Robustly

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IndexBox has just published a new report: ‘EU – Calcium Ammonium Nitrate (CAN) – Market Analysis, Forecast, Size, Trends and Insights’. Here is a summary of the report’s key findings.

In 2020, calcium ammonium nitrate exports in the EU peaked at 9.1M tonnes, reaching the highest point over the past decade. In value terms, they reduced from $1.7B in 2019 to $1.6B due to a decline in export prices. Last year, the calcium ammonium nitrate export price in the EU dropped by -10% compared with figures of 2019. The Netherlands, Belgium, Germany, France, Slovakia, Hungary and Lithuania supply 82% of total European exports of calcium ammonium nitrate in physical terms.

Calcium Ammonium Nitrate Exports in the EU

Calcium ammonium nitrate exports stood at 9.1M tonnes in 2020, with an increase of +3.5% compared with the previous year’s figure. In value terms, calcium ammonium nitrate exports declined from $1.7B in 2019to $1.6B (IndexBox estimates) in 2020.


 

The calcium ammonium nitrate export price in the EU stood at $177 per tonne in 2020, declining by -10% against the previous year. Average prices varied noticeably amongst the major exporting countries. In 2020, major exporting countries recorded the following prices: in France ($195 per tonne) and Belgium ($185 per tonne), while Lithuania ($163 per tonne) and Hungary ($167 per tonne) were amongst the lowest. In 2020, the most notable rate of growth in terms of prices was attained by the Netherlands, while the other leaders experienced a decline in the export price figures.

In 2020, the Netherlands (2.7M tonnes), distantly followed by Belgium (1,669K tonnes), Germany (1,026K tonnes), France (575K tonnes), Slovakia (498K tonnes), Hungary (483K tonnes) and Lithuania (446K tonnes) represented the key exporters of calcium ammonium nitrate (CAN), together mixing up 82% of total exports. Spain (390K tonnes) took a relatively small share of total exports.

In 2020, the most notable rate of growth in terms of shipments, amongst the leading exporting countries, was attained by Hungary, while exports for the other leaders experienced more modest paces of growth.

In value terms, the largest calcium ammonium nitrate supplying countries in the EU were the Netherlands ($469M), Belgium ($309M) and Germany ($189M), together comprising 60% of total exports. These countries were followed by France, Slovakia, Hungary, Lithuania and Spain, which together accounted for a further 26%.

Source: IndexBox Platform

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European Mineral Wool Imports Fall Owing to Declining Purchases in France and Italy

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IndexBox has just published a new report: ‘EU – Slag Wool, Rock Wool And Similar Mineral Wools And Mixtures – Market Analysis, Forecast, Size, Trends And Insights’. Here is a summary of the report’s key findings.

In 2020, European mineral wool imports dropped by -6.5% y-o-y to 1.3M tonnes. In value terms, they declined to $1.3B. France, Italy, Germany, Austria, Poland, Sweden, Romania, the Czech Republic and Belgium account for 74% of the total import volume in the EU. Last year, France, Germany and Italy saw a reduction in the volume of purchases from abroad. In 2020, the mineral wool import price in Europe remained relatively unchanged compared to the figures of the previous year.

Mineral Wool Imports in the EU

In 2020, approx. 1.3M tonnes of slag wool, rock wool and similar mineral wools and mixtures were imported in the EU, which was -6.5% lower compared with the year before. In value terms, mineral wool imports declined to $1.3B (IndexBox estimates) in 2020.


France (182K tonnes), Italy (147K tonnes), Germany (139K tonnes), Austria (102K tonnes), Poland (82K tonnes), Sweden (81K tonnes), Romania (79K tonnes), the Czech Republic (64K tonnes) and Belgium (56K tonnes) represented roughly 74% of total imports of slag wool, rock wool and similar mineral wools and mixtures in 2020. The following importers – Latvia (37K tonnes), Slovenia (34K tonnes), Finland (30K tonnes) and the Netherlands (30K tonnes) – together made up 10% of total imports.

France (-3.9% y-o-y), Italy (-10.0% y-o-y) and Germany (-10.0% y-o-y) reduced their purchases in physical terms against the previous year. Among other countries, Poland (-16.4% y-o-y) saw the most prominent drop in terms of import volume.

In value terms, Germany ($193M), France ($165M) and Italy ($128M) constituted the countries with the highest levels of imports in 2020, with a combined 38% share of total imports. These countries were followed by Austria, Belgium, Sweden, Poland, the Czech Republic, Romania, Finland, the Netherlands, Latvia and Slovenia, which together accounted for a further 45%.

In 2020, the mineral wool import price in the EU amounted to $1,014 per tonne, remaining relatively unchanged against the previous year. There were significant differences in the average prices amongst the major importing countries. In 2020, the country with the highest price was Finland ($1,548 per tonne), while Romania ($650 per tonne) was amongst the lowest. In 2020, the most notable rate of growth in terms of prices was attained by Belgium, while the other leaders experienced more modest paces of growth.

Source: IndexBox Platform

dates
Archives, EU Trade, Global Trade Daily, News

European Imports of Dates Surge over $430M

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IndexBox has just published a new report: ‘EU – Dates – Market Analysis, Forecast, Size, Trends and Insights’. Here is a summary of the report’s key findings.

European date imports jumped from 137K tonnes in 2019 to 157K tonnes in 2020. In value terms, imports soared to $437M. France, Germany, the Netherlands, Italy, Spain and Belgium constitute the largest date importers in the EU, with a combined 82%-share of the European imports. Last year, the Netherlands featured the most rapid growth rate regarding the import volume in physical terms. In 2020, the date import price in the EU remained relatively unchanged compared to the figures of 2019.

Imports of Dates in the EU by Country

In 2020, approx. 157K tonnes of dates were imported in the EU; growing by +14% compared with 2019 figures. In value terms, date imports skyrocketed by +15.7% y-o-y to $437M (IndexBox estimates) in 2020.

In 2020, France (50K tonnes), distantly followed by Germany (29K tonnes), the Netherlands (17K tonnes), Italy (12K tonnes), Spain (12K tonnes) and Belgium (8K tonnes) represented the main importers of dates, together creating 82% of total imports. Denmark (5K tonnes) occupied a little share of total imports.

In 2020, the most notable rate of growth in terms of purchases, amongst the leading importing countries, was attained by the Netherlands, while imports for the other leaders experienced more modest paces of growth.

In value terms, the largest date importing markets in the EU were France ($115M), Germany ($81M) and the Netherlands ($66M), with a combined 60% share of total imports.

In 2020, the date import price in the EU amounted to $2,791 per tonne, remaining constant against the previous year. In 2020, it increased by +1.3% y-o-y. Prices varied noticeably by the country of destination; the country with the highest price was the Netherlands ($3,796 per tonne), while France ($2,275 per tonne) was amongst the lowest. In 2020, the most notable rate of growth in terms of prices was attained by Italy, while the other leaders experienced more modest paces of growth.

Source: IndexBox Platform

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Archives, Global Trade Daily, International Trade

Asia Takes the Lead For Recovery and Regional Growth For Global Trade

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As global trade rebounds, the economies from East Asian and Pacific countries are increasing at a faster pace than their Western counterparts. China is fully expected to be the leader of this rise.

While part of this is because China is the largest economy in the region, another perhaps lesser-known reason is the fact that China (as well as other East Asian nations such as Vietnam) has not suffered from lockdowns and economic restrictions due to Covid to the same degree that Western countries have. 

In this article, we’ll dive into the increase in trade during the first half of 2021 from Asia in comparison to their Western counterparts. We will also talk about whether China has a stronger grip on world trade than ever before due to the pandemic…or if the evidence alternatively suggests that China’s position as a trade leader may be nearing its peak instead.

A Return to Normal Trade Levels in Asia

Businesses based out of East Asian countries have good reason to be optimistic as global trade starts to return to pre-pandemic levels. It’s clear that Asian economies have not been hit to the same level as countries in the rest of the world have. 

According to research conducted by the East Asia Forum, the digital economy is projected to add over $1 trillion to the Asian economy over the next decade, the most of any region in the world. And it’s not just projections about the future that are favorable to Asia. The results already speak for themselves. 

For instance, total export volumes from East Asian countries for the first quarter of 2021 were actually up 15.4% more than what they were in the first quarter of 2019. Meanwhile, exports have collapsed amongst nations in other regions of the world. Europe has reported a 2.9% decline in exports when compared to two years ago, with an even sharper decline of 11.2% and 19.9% for Africa and the Middle East respectively. 

There are two significant reasons why East Asian economies have rebounded so quickly in comparison to the rest of the world. The first is because they have largely followed China’s lead. The World Bank has forecasted that China’s economy will expand by 8.1% by the end of this year, which has helped carry an increase of 4.4% for other closely-tied countries in the East Asian and Pacific region as a whole. 

Then there’s the fact that Asian nations, including China, did not have to endure lockdowns and economic restrictions to the same level that the United States or Europe did. In the summer of 2020, for instance, it was widely reported how a massive pool party was held in none other than Wuhan while Western countries remained under strict lockdowns that were tightly enforced. 

This year, Western countries like the United States continue to feel the negative effects of the imposed economic restrictions in the form of a lower participation rate in the labor force, severe non-labor shortages (such as in the form of lumber and semiconductors), higher inflation, and costlier prices for basic goods.

This naturally begs the question:

Has The West Truly Fallen Behind?

In Western countries like the United States, Canada, and the United Kingdom, small businesses are perhaps the worst affected of all. Small businesses are responsible for a majority of private-sector employment and have also been the most severely hit. 

According to the Business Resiliency During Covid-19 study conducted by Freshbooks, 77% of surveyed business owners stated that they were either not confident or only somewhat confident in the state of their businesses. Among the reasons cited included a loss of income, reduced cash flow, and not having enough staff or resources to keep operations up and running.   

Of course, only time will tell if Western economies have truly fallen behind their Western counterparts. The United States has long been a leader in the global economy and even now remains the world’s largest economy when measured by nominal GDP…though China is now in a close second.

It’s also concerning that many businesses do not appear to have the appropriate financial security measures in place in the event of further financial or personal disaster. For example, in the same Business Resiliency survey, nearly a quarter of surveyed business owners indicated that they did not have any kind of an insurance policy in place.

Business owners who have taken out large business loans or a line of credit, for instance, would benefit strongly from a comprehensive insurance plan that covers most or all of the financial damages in the event of defaulting on the debt from a lack of incoming cash flow, or worse, in their death that would essentially transfer the liabilities to their family members. 

When you combine the fact that most business owners do not have an insurance policy as a cushion in place with the realities that many of those same owners have burnt through their emergency funds during the lockdown and that Covid relief packages from the Federal government are set to expire (or have already), it’s easy to see how the situation is a bit dire.

In the short term at least, it’s clear that the economies of East Asian countries, spearheaded by China, have emerged out of the pandemic more favorably than the countries of the West. 

But is China’s rise set to last? And if not, what does this mean for the rest of East Asia?

Has China’s Grip Over World Trade Peaked?

China has been the largest exporter of goods worldwide since 2009, and it became the world’s largest trading nation in 2013. Both of these positions had previously been held by the United States.

In other words, China as a trading leader on the world stage is nothing new, and this is also why the faster recovery of Asian economies versus Western countries should not be surprising. More than half of all e-commerce transactions in the world are now coming out of China, which likewise has borne well for the Asian market.

But there are many who believe that China is nearing the peak of its current economic capacity, and with it, perhaps the rest of Asia as well. A report last spring by UNCTAD (the United Nations Conference on Trade and Development) argued that while China is almost certain to remain as the leading exporter in the world for the next few years, there are several inherent vulnerabilities that threaten to cut its rise a bit short.

Among the reasons cited for this include simmering geopolitical tensions that hinder social development, rising labor costs that could lead to production processes either being automated or transferred elsewhere, increased tariffs on Chinese exports from the U.S. and EU, and major companies pulling the production of their products out of China completely. 

As an example of the last mentioned reason, electronics conglomerate Samsung announced last year that they would cease manufacturing computers and phones in China in favor of other Asian countries like Vietnam and India. This decision was made in the face of both rising costs to manufacture in China and increasing international tensions. 

Each of the aforementioned factors means that China could become more dependent on domestic rather than international demand, and therefore stands to chip away at China’s competitiveness on the global scale if those factors don’t change. 

And the spread of the Delta variant has also spurred new lockdowns in China and other Asian countries, which means it’s almost certain that we will see new disruption to Asian supply chains, and particularly in regards to consumer goods and high tech equipment. 

In other words, even though East Asia may have taken the lead in economic recovery and trade growth for now, it’s still far from certain that this will last over the long term. 

Conclusion

Has the pandemic truly created a major economic realignment to global trade and the world order, or are the shifts we are seeing now temporary?

The evidence is clear that the economies of East Asian companies have recovered from the pandemic faster than the United States, Canada, or Europe. But those economies have also largely followed the lead set by China’s current dominance as a world trade leader, and vulnerabilities in China’s economy mean it’s easily possible the country’s grip over world trade could start to slip.

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Indian Pimenta Pepper Exports Hit Record $1.1B

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IndexBox has just published a new report: ‘India – Pimenta Pepper – Market Analysis, Forecast, Size, Trends and Insights’. Here is a summary of the report’s key findings.

India remains the largest pimenta pepper exporter worldwide, comprising near half of the global exports. Last year, India managed to strengthen its leading position, with pimenta pepper exports skyrocketing to over 500K tonnes, or $1.1B. China was the key importer of Indian pepper, accounting for 32% of the total volume. The average export price for pimenta pepper from India jumped by +16% y-o-y in 2020.

Pimenta Pepper Exports from India

India ranks first among the world’s largest pimenta pepper exporters. Indian supplies abroad account for 51% of global pimenta pepper exports in physical terms.

In 2020, the amount of pimenta pepper exported from India expanded rapidly to 513K tonnes, increasing by +12% on the previous year. In value terms, pimenta pepper exports skyrocketed by +29.6% y-o-y to $1.1B (IndexBox estimates) in 2020.

China (163K tonnes) remains the main destination for pimenta pepper exports from India, with a 32% share of total exports. Moreover, pimenta pepper exports to China exceeded the volume sent to the second major destination, Bangladesh (66K tonnes), twofold. The third position in this ranking was occupied by Thailand (54K tonnes), with a 10% share.

In 2020, the volume of supplies to China increased by +8.8% y-o-y. Thailand saw the most prominent growth rate in terms of volume of purchases from India in 2020.

In value terms, China ($387M) remains the key foreign market for pimenta pepper exports from India, comprising 35% of total exports. The second position in the ranking was occupied by Thailand ($122M), with an 11% share of total exports. It was followed by Bangladesh, with a 9.5% share.

The average pimenta pepper export price stood at $2,147 per tonne in 2020, increasing by +16% against the previous year. There were significant differences in the average prices for the major export markets. In 2020, the country with the highest price was the U.S. ($2,671 per tonne), while the average price for exports to Bangladesh ($1,586 per tonne) was amongst the lowest. In 2020, the most notable rate of growth in terms of prices was recorded for supplies to Malaysia, while the prices for the other major destinations experienced more modest paces of growth.

Source: IndexBox Platform

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European Unmanufactured Tobacco Imports Fall to the Lowest Level in a Decade

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IndexBox has just published a new report: ‘EU – Tobacco (Unmanufactured) – Market Analysis, Forecast, Size, Trends and Insights’. Here is a summary of the report’s key findings.

In 2020, European imports of unmanufactured tobacco fell by -7% y-o-y to 578K tonnes, reaching the lowest level over the past decade. Poland and Germany constitute the largest importers of unmanufactured tobacco in the EU, with a combined share of 48% of the total European import volume. Last year, Italy saw the most prominent drop in tobacco purchases from abroad, while Belgium ramped up its imports. The unmanufactured tobacco import price in Europe remained almost unchanged against the previous year. 


 

Unmanufactured Tobacco Imports in the EU

Unmanufactured tobacco imports in the EU shrank to 578K tonnes in 2020, dropping by -7% compared with the previous year. In value terms, unmanufactured tobacco imports declined from $3B to $2.8B (IndexBox estimates) in 2020.

Poland (143K tonnes) and Germany (136K tonnes) represented roughly 48% of total imports of tobacco (unmanufactured) in 2020. The Netherlands (49K tonnes) occupied the next position in the ranking, followed by France (46K tonnes), Belgium (32K tonnes), Italy (31K tonnes) and Romania (28K tonnes). All these countries together held near 32% share of total imports.

In 2020, the most notable decline in terms of purchases, amongst the key importing countries, was attained by Italy (-23% y-o-y). Among the largest European importers, Belgium (+34% y-o-y) became the only country increasing the volume of imported unmanufactured tobacco.

In value terms, Germany ($710M), Poland ($705M) and the Netherlands ($214M) were the countries with the highest levels of imports in 2020, with a combined 58% share of total imports. These countries were followed by Belgium, Romania, Italy and France, which together accounted for a further 22%.

The unmanufactured tobacco import price in the EU stood at $4,861 per tonne in 2020, remaining relatively unchanged against the previous year. There were significant differences in the average prices amongst the major importing countries. In 2020, the country with the highest price was Romania ($5,973 per tonne), while France ($2,538 per tonne) was amongst the lowest. In 2020, the most notable rate of growth in terms of prices was attained by Italy, while the other leaders experienced mixed trends in the import price figures.

Source: IndexBox Platform