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Dubai’s Latest Report Confirms Non-Oil Foreign Trade Increased 6 Percent in 2019

Dubai
Archives, Global Trade Daily, News

Dubai’s Latest Report Confirms Non-Oil Foreign Trade Increased 6 Percent in 2019

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In the latest report by the Government of Dubai, the region was confirmed its efforts to achieve its 2025 trade target of AED2 trillion helped spur growth in trade last year. The report also confirmed that non-oil external trade saw an increase of 19 percent in volume from 91 million tons in 2018 to reach 109 million tons in 2019. Re-exports rose by a record 48 percent to reach 17 million tons, while exports rose by 45 percent to 19 million tons and imports grew by 9 percent to 72 million tons. These figures capped a prosperous decade for Dubai from 2010-2020, during which external trade grew by 70 percent.

Dubai achieved exceptional external trade growth in 2019 despite the headwinds from an intensified global economic downturn. In terms of value, Dubai’s external trade surged 6 percent to AED1.371 trillion from AED 1.299 trillion in 2018. Exports skyrocketed 22 percent to AED155 billion, re-exports grew by 4 percent to AED420 billion and imports rose by 3 percent to AED796 billion. Over the decade (2010-2019), the value of Dubai’s external trade went up by 52 percent thanks to the agility, versatility and flexibility of the external trade sector in the emirate, which discovered alternative markets and trade paths to make up for sluggish growth in some markets.

“Dubai’s external trade has contributed significantly to the emirate’s economic achievements, further raising its status as a global hub for trade, business, and tourism, giving it a solid platform for growth in the next 50 years and creating the optimal conditions for more sustainable development across sectors,” said Sheikh Hamdan bin Mohammed, Crown Prince of Dubai and Chairman of The Executive Council. “Inspired by the vision of His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE and Ruler of Dubai, Dubai’s external trade sector is progressing steadily towards the 2025 trade target of AED2 trillion set by His Highness.

“All government entities are working seamlessly together to provide the best services, facilitate trade and foreign investments, and further develop infrastructure across the emirate, especially at airports and free zones, to galvanize its journey of excellence and enhance its role as a commercial bridge between the east and west. Furthermore, hosting mega-events such as EXPO 2020 will provide opportunities for the international trade sector to explore new possibilities and expand growth.”

Dubai’s foreign trade out of free zones in 2019 was a major contributor to the overall increase, accounting for AED592 billion, an 11 percent increase year-on-year. Direct trade saw a 2 percent growth to reach AED770 billion. Customs warehouse trade hit AED9 billion.

Land trade grew by 11 percent contributing to AED228 billion, air trade rose by 5 percent to AED641 billion and sea trade increased by 4 percent to AED502 billion.

Sultan bin Sulayem, DP World Group Chairman & CEO and Chairman of Ports, Customs and Free Zone Corporation, said: “Growth in Dubai’s external trade is the fruit of dedicated and well-planned work over the last few years, which helped us establish global leadership in different sectors. The future is promising and there are no limits when it comes to our expectations. We will keep growing and developing based on the latest and most advanced innovations and breakthroughs in AI smart applications following the vision and directives of our leadership.

“Hosting major international events will give our organizations a greater voice on the world stage, backed by our presence and strong network out of the 80 terminals that DP World operates worldwide, and our bold economic initiatives including the Dubai Silk Road.”

Bin Sulayem added: “Free zones in Dubai are a key factor behind the emirate’s trade success. The sophisticated infrastructure of our free zones, especially Jebel Ali Free Zone (JAFZA), has helped businesses benefit from different incentives and facilities, and attracted more foreign investments over the years.”

Bin Sulayem said Dubai Customs is continuously evolving to facilitate greater trade and provide more exceptional service to its customers. The number of customs transactions completed by Dubai Customs grew by a record 34 percent in 2019 to 13 million from 9.7 million in 2018. As part of the Dubai Silk Road strategy, Dubai Customs launched the World Logistics Passport, which links Customs World, DP World, and Emirates Group to enhance connectivity through Dubai and, through sharing of expertise and process development directly between partner countries. Dubai Customs also launched the second phase of the productivity engine, an initiative developed in-house and approved by The Executive Council with the aim of boosting productivity by 8 – 10 percent.

China remained Dubai’s largest trading partner, contributing AED150 billion. India was the second-biggest trading partner, contributing AED135 billion, followed by the USA with AED77.7 billion, and Switzerland with AED60 billion.

Saudi Arabia maintained its position as Dubai’s largest Arab trade partner. The country was the emirate’s fifth-biggest partner globally, contributing AED56 billion.

The highest traded commodity by value in 2019 was gold, jewelry, and diamonds which contributed AED370 billion, a growth of 7 percent from 2018. Gold took the lion’s share of trade with AED169.5 billion, followed by phones with AED164 billion, an increase of 9 percent from the previous year. The third-highest traded commodity was jewelry at AED116.6 billion, followed by petroleum oils which contributed AED85.4 billion in 2019, a growth of 55 percent, and diamonds which accounted for AED83.9 billion.

*Republished with permission

turkey
Archives, EU Trade, Global Trade Daily

Germany, Spain, and Poland Are the Largest Markets for Preserved Turkey Meat in the EU

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IndexBox has just published a new report: ‘EU – Prepared Or Preserved Meat Or Offal Of Turkeys – Market Analysis, Forecast, Size, Trends And Insights’. Here is a summary of the report’s key findings.

The revenue of the preserved turkey market in the European Union amounted to $2.3B in 2018, remaining relatively unchanged against the previous year. This figure reflects the total revenues of producers and importers (excluding logistics costs, retail marketing costs, and retailers’ margins, which will be included in the final consumer price).

Over the period under review, preserved turkey consumption, however, continues to indicate a mild drop. The pace of growth appeared the most rapid in 2011 with an increase of 12% y-o-y. The level of preserved turkey consumption peaked at $2.7B in 2014; however, from 2015 to 2018, consumption failed to regain its momentum.

Consumption By Country

The countries with the highest volumes of preserved turkey consumption in 2018 were Germany (124K tonnes), Spain (88K tonnes) and Poland (57K tonnes), with a combined 54% share of total consumption. These countries were followed by France, the UK, Greece, the Netherlands, Hungary, Portugal, Italy, Belgium and Bulgaria, which together accounted for a further 35%.

From 2007 to 2018, the most notable rate of growth in terms of preserved turkey consumption, amongst the main consuming countries, was attained by Hungary, while preserved turkey consumption for the other leaders experienced more modest paces of growth.

In value terms, Germany ($572M), Spain ($353M) and France ($287M) constituted the countries with the highest levels of market value in 2018, with a combined 54% share of the total market. These countries were followed by Poland, the UK, Greece, Portugal, Belgium, Italy, Bulgaria, Hungary and the Netherlands, which together accounted for a further 35%.

The countries with the highest levels of preserved turkey per capita consumption in 2018 were Greece (2,075 kg per 1000 persons), Spain (1,887 kg per 1000 persons) and Germany (1,512 kg per 1000 persons).

From 2007 to 2018, the most notable rate of growth in terms of preserved turkey per capita consumption, amongst the main consuming countries, was attained by Hungary, while preserved turkey per capita consumption for the other leaders experienced more modest paces of growth.

Market Forecast to 2030

Driven by increasing demand for preserved turkey in the European Union, the market is expected to continue an upward consumption trend over the next decade. Market performance is forecast to accelerate, expanding with an anticipated CAGR of +1.6% for the period from 2018 to 2030, which is projected to bring the market volume to 598K tonnes by the end of 2030.

Production in the EU

The preserved turkey production totaled 512K tonnes in 2018, dropping by -4.6% against the previous year. The total output volume increased at an average annual rate of +2.3% over the period from 2007 to 2018; the trend pattern remained consistent, with only minor fluctuations being observed in certain years. The pace of growth was the most pronounced in 2017 with an increase of 8.1% year-to-year. In that year, preserved turkey production attained its peak volume of 537K tonnes, and then declined slightly in the following year.

In value terms, preserved turkey production amounted to $2.2B in 2018 estimated in export prices. Over the period under review, preserved turkey production, however, continues to indicate a relatively flat trend pattern. The growth pace was the most rapid in 2011 with an increase of 17% year-to-year. In that year, preserved turkey production attained its peak level of $2.6B. From 2012 to 2018, preserved turkey production growth remained at a somewhat lower figure.

Production By Country

The countries with the highest volumes of preserved turkey production in 2018 were Germany (129K tonnes), Spain (89K tonnes) and Poland (69K tonnes), with a combined 56% share of total production.

From 2007 to 2018, the most notable rate of growth in terms of preserved turkey production, amongst the main producing countries, was attained by Germany, while preserved turkey production for the other leaders experienced more modest paces of growth.

Exports in the EU

In 2018, the preserved turkey exports in the European Union totaled 122K tonnes, going up by 9.2% against the previous year. The total export volume increased at an average annual rate of +4.5% over the period from 2007 to 2018; however, the trend pattern indicated some noticeable fluctuations being recorded in certain years. The pace of growth appeared the most rapid in 2008 when exports increased by 19% y-o-y. Over the period under review, preserved turkey exports reached their maximum in 2018 and are likely to see steady growth in the near future.

In value terms, preserved turkey exports amounted to $474M (IndexBox estimates) in 2018. The total export value increased at an average annual rate of +2.9% over the period from 2007 to 2018; however, the trend pattern remained relatively stable, with somewhat noticeable fluctuations being observed in certain years. The pace of growth appeared the most rapid in 2008 with an increase of 32% y-o-y. The level of exports peaked in 2018 and are expected to retain its growth in the near future.

Exports by Country

The Netherlands was the major exporter of prepared or preserved meat or offal of turkeys exported in the European Union, with the volume of exports resulting at 41K tonnes, which was approx. 34% of total exports in 2018. Germany (21K tonnes) held the second position in the ranking, followed by Poland (13,041 tonnes), Belgium (8,602 tonnes), Italy (8,022 tonnes), France (6,983 tonnes), Hungary (6,934 tonnes) and Spain (6,045 tonnes). All these countries together held near 58% share of total exports.

From 2007 to 2018, the most notable rate of growth in terms of exports, amongst the main exporting countries, was attained by the Netherlands, while exports for the other leaders experienced more modest paces of growth.

In value terms, the largest preserved turkey supplying countries in the European Union were the Netherlands ($134M), Germany ($106M) and Belgium ($49M), with a combined 61% share of total exports.

In terms of the main exporting countries, the Netherlands recorded the highest rates of growth with regard to the value of exports, over the period under review, while exports for the other leaders experienced more modest paces of growth.

Export Prices by Country

In 2018, the preserved turkey export price in the European Union amounted to $3,900 per tonne, remaining relatively unchanged against the previous year. Overall, the preserved turkey export price, however, continues to indicate a slight reduction. The pace of growth appeared the most rapid in 2011 an increase of 16% y-o-y. The level of export price peaked at $5,155 per tonne in 2008; however, from 2009 to 2018, export prices stood at a somewhat lower figure.

There were significant differences in the average prices amongst the major exporting countries. In 2018, the country with the highest price was Belgium ($5,720 per tonne), while Poland ($2,839 per tonne) was amongst the lowest.

From 2007 to 2018, 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.

Imports in the EU

In 2018, the amount of prepared or preserved meat or offal of turkeys imported in the European Union stood at 107K tonnes, rising by 13% against the previous year. In general, preserved turkey imports, however, continue to indicate a significant drop. The pace of growth appeared the most rapid in 2018 with an increase of 13% y-o-y. The volume of imports peaked at 152K tonnes in 2007; however, from 2008 to 2018, imports failed to regain their momentum.

In value terms, preserved turkey imports amounted to $403M (IndexBox estimates) in 2018. In general, preserved turkey imports, however, continue to indicate a perceptible shrinkage. The growth pace was the most rapid in 2018 when imports increased by 14% against the previous year. Over the period under review, preserved turkey imports reached their peak figure at $601M in 2008; however, from 2009 to 2018, imports failed to regain their momentum.

Imports by Country

Germany (16,239 tonnes), France (11,509 tonnes), Hungary (7,889 tonnes), the UK (7,614 tonnes), Greece (7,423 tonnes), the Netherlands (6,661 tonnes), Italy (6,577 tonnes), Belgium (6,314 tonnes), Spain (5,158 tonnes), Austria (5,019 tonnes), Portugal (4,455 tonnes) and Ireland (4,418 tonnes) represented roughly 84% of total imports of prepared or preserved meat or offal of turkeys in 2018.

From 2007 to 2018, the most notable rate of growth in terms of imports, amongst the main importing countries, was attained by Hungary, while imports for the other leaders experienced more modest paces of growth.

In value terms, the largest preserved turkey importing markets in the European Union were Germany ($60M), France ($51M) and the Netherlands ($32M), together comprising 35% of total imports. The UK, Belgium, Greece, Italy, Austria, Portugal, Spain, Ireland and Hungary lagged somewhat behind, together accounting for a further 47%.

Hungary experienced the highest growth rate of the value of imports, among the main importing countries over the period under review, while imports for the other leaders experienced more modest paces of growth.

Import Prices by Country

The preserved turkey import price in the European Union stood at $3,777 per tonne in 2018, standing approx. at the previous year. Over the period under review, the preserved turkey import price, however, continues to indicate a relatively flat trend pattern. The growth pace was the most rapid in 2008 when the import price increased by 22% y-o-y. Over the period under review, the import prices for prepared or preserved meat or offal of turkeys attained their peak figure at $4,847 per tonne in 2011; however, from 2012 to 2018, import prices remained at a lower figure.

There were significant differences in the average prices amongst the major importing countries. In 2018, the country with the highest price was the Netherlands ($4,854 per tonne), while Hungary ($1,577 per tonne) was amongst the lowest.

From 2007 to 2018, the most notable rate of growth in terms of prices was attained by the Netherlands, while the other leaders experienced more modest paces of growth.

Source: IndexBox AI Platform

live animals
Archives, Global Trade Daily, International Trade

THE GLOBAL TRAVELS OF LIVE ANIMALS

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Horses, Asses, Mules and Hinnies Atop the Tariff Schedule

Unless you’re a farmer or animal breeder, the first item in Chapter 1 of the Harmonized Tariff Schedule is one we may think about the least – Live Animals. For most Americans, live animals are a long supply chain away from the supermarket.

At over $21 billion in 2017, global trade in live animals has increased 140 percent over the last two decades. Some 45 million hogs, 16 million sheep, 11 million head of cattle, 5 million goats and 1.9 million poultry (mainly chickens) were transported around the globe, some for breeding and about 80 percent intended for consumption.

A specialized segment within the transportation sector is dedicated to transporting live animals by air, land and sea – from air cargo, tractor trailers and trains, to ocean container shipping.

HTS snippet 0101

Shifting Resource Burdens

The world will be home to 9.7 billion people by 2050. With more mouths to feed, agriculture production must become more efficient against the challenges of limited arable land, energy and water resources, especially in developing countries. International development agencies promote raising livestock as a way to increase income for smallholder farmers (owners can sell products and/or offspring) and to achieve greater food security in rural areas through access to high quality proteins. Importing livestock in the last few months of their life can reduce expenses associated with animal feed and veterinary care while conserving limited water resources.

The water-stressed Middle East region has become a major importer of live animals. Demand for meat and dairy products has grown steeply in Egypt, Israel, Jordan, Kuwait, Lebanon, Oman, Qatar and Saudi Arabia. Importing mature live animals avoids the need to rear animals from birth, shifting the water burden while meeting demand for animals freshly slaughtered in adherence to religious requirements.

Trade in live animals 3x increase

Trade in Genetics, No Goats No Glory

Countries are investing in improving their livestock by either importing live animals or importing frozen semen and embryos for artificial insemination, a process that is achieving higher success rates as costs are coming down. Global trade in purebred animals for breeding in 2017 was a $780 million industry. The animal genetic market is projected to grow from $4.2 billion in 2018 to $5.8 billion by 2023.

In November last year, 1,503 U.S.-origin Holstein heifers valued at $3 million were sold out of Statesville, North Carolina and shipped to Egypt aboard a livestock carrier in an effort by the Government of Egypt to improve the country’s dairy operations supporting output of milk for yogurt and cheese. Qatar is importing American-born dairy cows to surmount trade bans by neighboring countries.

Chickens are by far the largest category of live animals traded globally with hogs coming in second. But it’s dairy goats that could prove key to achieving the United Nations’ 2030 Agenda for Sustainable Development. Goats consume fewer resource inputs than cows, goat milk is nutritious, and women often have strong roles in dairy goat ownership and management.

Caprikorn Farms is the oldest goat dairy in Maryland. Raising some of the best dairy goats in the United States and the world, their genetics are in demand. They have worked with Russian authorities to not only send several live animal shipments to Russia but also improve Russia’s health protocol for international shipment. Ten of their goats even flew to Qatar on a private jet.

Bees also get in on the global trade act. Not only do bees circulate throughout the United States to pollinate our many crops, $48.1 million worth of live bees – including Queen bees and semen — were exported globally in 2018. Europe shipped $26.5 million or 55.2 percent of the global total.

Live animal trade routes 2017

Protecting Livestock on the Journey

While North American cattle and hogs have a short truck ride or may even live on ranches along the borders, many animals face a long ocean journey during which their health can be compromised. They are sometimes relegated to older vessels that may be converted from general cargo and not purpose-built to transport the animals in safe conditions. Often on journeys for weeks at a time, animals are at risk for fatigue, heat stress, overcrowding, injury and the spread of disease in close quarters.

The World Organization for Animal Health (OIE) issued the Terrestrial Animal Health Code in 2019 that provides standards for transporting animals by land, sea and air to protect the health and welfare of the animals and prevent the transfer of pathogens via international trade in animals.

As the global population increases and agricultural producers seek to maximize the resources available to them while improving output, global trade in live animals is likely to continue to grow. Standards and cooperation in international trade practices will need to evolve along with that trend.

Contributor Sarah Smiley lives on her family farm in Appalachia where they have raised fainting (myotonic) goats and Charolais cattle for more than 20 years.

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Sarah Smiley is a strategic communications and policy expert with over 20 years in international trade and government affairs, working in the U.S. Government, private sector and international organizations.

This article originally appeared on TradeVistas.org. Republished with permission.

warehouse
Archives, Global Trade Daily, Warehousing

MAN AND MACHINE ARE KEY TO CREATING COMPETITIVE ADVANTAGE IN TODAY’S SUPPLY-CHAIN WAREHOUSE

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When it comes to warehousing and the use of robotics to manage and maintain a competitive supply chain, the conversations usually begin with the potential for these powerhouse machines to replace workers and eliminate the need for humans in the facility. As this might be the case in some situations, the bigger concern surrounds how to successfully create an environment where both humans and robots are able to safely collaborate, creating more efficiencies within the warehouse sector while at the same time optimizing the processes many still operate manually.

This is the concept of interconnecting the mind and abilities of these machines to support human workers, not replace them. The truth of the matter is, there are some things humans can do that robots simply cannot do, and the fear of robots replacing humans is backwards compared to what is really going on in meetings between warehouse managers and creators of autonomous solutions.

Dan Khasis, founder of Route4Me, a unique route optimization software platform, takes a deeper look at the emerging relationship between robotics and warehouses and dissects the reality of what is really going on when managing the supply chain inside the modern warehouse. “There’s this perception and risk associated with the subjects of robotics and job security,” he concedes. “It is very common to see a lot of warehouses that are based on the location, the retailer, the company, where their worker population is unionized. Many times, the situation starts with C-level executives who discover the technology that can drive efficiencies in the warehouse, save money and that work very well.”

“However, word gets back to the union workers that the expectation is for them to work twice as much in the same amount of time and they quickly realize it isn’t realistic or possible,” Khasis continues. “At that point, technology adoption is eliminated because people cannot be replaced. At that point, they accept the inefficiencies and turn to loopholes to deal with the issues that are clearly present. It is not the worker’s fault, but there is a struggle with getting warehouse workers onboard with these new technologies in addition to the long hours that are required to keep up.”

Khasis goes on to explain that the ability to do the picking and packing in the warehouse is still one of the biggest pain points in the warehousing sector. An example he cites is weight restrictions and what makes sense in terms of safety and simplicity. Can one send a robot to pick up a fridge that weighs 800 pounds versus utilizing someone in a forklift to lift the fridge? Sure, but some would question how a robot could prove to be more beneficial than a forklift in situations like these.

“There are basic and common risks associated with robotics, such as employees getting injured, and the technology exists to avoid such accidents,” Khasis says. “In terms of a hybrid model, you’re able to have things such as augmented reality where if one is driving through the warehouse, there’s clearly the safety component in question. There are heavy items throughout the warehouse that are elevated and there needs to be a population of properly trained employees to minimize these risks along with the technology to support it.”

Heavy lifting comes into play with this pain point and Khasis emphasizes that well-trained individuals are more favorable over advanced technology in these cases. With every advancement comes risk and it’s about measuring the risk against current and potential resources that determines the best way to optimize operations while mitigating these risks. The warehouse sector is aiming to operate optimally and safely as that is where competitive advantage is ultimately found.

“The hybrid warehouses that are half robots and half autonomous are still an open question regarding the interaction between human workers and robots because there will undoubtedly be issues with how they collaborate together,” Khasis points out. “For example, will there be a specific area for robots and one area for the workers, how we will address collision avoidance, and how they will actually collaborate are the bigger questions still in the process of being solved?”

Leadership in the warehouse sector is experiencing a technological disconnect as well. While many news headlines boast the latest big-name companies adopting a new form of advanced technology, there are still many large companies operating the good old-fashioned way: via Microsoft Excel or another manual process and dismissing the option of advanced technology completely. This isn’t a bad thing, but Khasis emphasizes that these companies could maximize their bottom lines by adopting technologies that aren’t incompatible with emerging technology.

“There’s a generational shift in the warehouse,” he says. “For example, the VP or director in today’s warehouse might not have faith in the modern technology approaches available. We sometimes have friendly arguments with our own customers explaining how something might not ‘look’ better but mathematically and in terms of optimization, it is paramount in comparison and when broken down. There are both trends and realities that differ from what people are talking about versus what’s actually happening.”

Khasis continues: “Many warehouses out there are still using legacy software and there’s a significant amount of big industry players who still have not modernized their systems. Part of that modernization is moving stuff to the cloud and as they move things up to the cloud, opportunities will open up for them to take advantage of newer technologies. These newer technologies on the market are not backward compatible with the relatively obsolete systems that are closed off and still very much in use. They simply do not interact well with other systems.”

For warehouses, proactive measures through advanced technologies are phasing out antiquated systems that require a retrospective approach to the process. Processes Microsoft Excel are still very much part of the manual process Khasis says breaks the dynamic between the adoption of technology and the desired bottom-dollar impact.

“Few companies actually understand what they need to have in each warehouse and when they need it,” he says, “and the way to successfully identify what consumers are demanding is best found through reliable and integrated e-commerce data. In some cases, the warehouse directors will project certain time frames for specific items based on the previous year rather than analyzing data revealing search activity increases within the e-commerce sector.”

These data predictions and trends monitoring can give matchless insight on upcoming and unpredictable events that other manual processes simply cannot accomplish. Weather changes, for example, and alerting warehouses of what to keep in stock versus assuming patterns in spending can make big differences in gaining that advantage over competitors. E-commerce monitoring through this data can give ample information in real-time without the need of someone else providing trend forecasting. This brings extra work costs down for the warehouse worker and increases time savings overall, all while driving the bottom dollar up.

Khasis emphasizes the importance and role advanced technologies will have in providing more opportunities in optimization and human-robot collaborations. With advanced technologies, warehouse managers can better predict what types of deliveries are on the horizon and prepare their warehouse more efficiently, streamlining the process and interactions between automation and warehouse workers.

“The warehouse does not live in a vacuum and it must be able to adapt to upstream and downstream systems. For example, if a shipment is coming in and you have the capability of knowing what is on that vehicle and where it needs to g—assuming you have the technology available to share that information—you can then have the human workers and robots collaborate to make room for that to go smoothly. This can include advanced space allocation, unloader coordination and advanced warehouse space preparations.”

Autonomous vehicles will soon have to adapt to the warehouse as well. The issue of inter-compatibility will undoubtedly be of question.

“One cannot send a delivery vehicle or any other type of truck with a different height from the warehouse because the robots can’t access it,” Khasis notes. “The concept of inter-compatibility between internal robotics and external autonomous systems will be particularly important in the near future. We believe that in order for there to be efficiencies, there must be integration, and everything needs to collaborate.

“Our patent–called Autonomous Supply Chain, and the point of this is to reiterate that a warehouse can have the best software on the market but if it isn’t compatible or the timing isn’t right, then it doesn’t matter. That brings up the question of timing and what determines the right time and how it impacts planning which is very important.”

Without the key element of integration, the most advanced technology simply will not present the results sought for competitive advantage in the warehouse, negating the desired effects from the dollars spent on adopting them. For companies seeking to redefine the warehouse, they must consider in what ways integration is possible and affordable.

“We look at all the assets including the people, the vehicles, the potential shipments on the way in and out of the country, the warehouse and its capabilities and location, and figure the best way to optimize routes,” Khasis says. “For some of the biggest global companies, this is still being done with manual interpretations, which includes reporting analysis after the fact. There is little preventable action with this type of process, and it takes more of a retrospective approach.”

The option of accepting inefficiencies is simply not going to cut it anymore. Processes are changing, technology is becoming the new standard, and people are needed that are open to learning and adopting methods of work that increase productivity while supporting long-term and short-term goals in the supply chain.

“The goal of Autonomous Supply Chain is to get in front of the problems and decisions rather than behind them while utilizing an advanced technology that can collaborate across the board,” Khasis says. “By incorporating all techniques across different business units and different business entities, the process is streamlined. When this is all put together, we are estimating anywhere from 25 to 50 percent value creation, savings and profit increase mainly because a lot of this process is currently human dependent.”

More than ever before, the concept of synchronization in the supply chain is needed. Customer demands will continue to rise and become more complex as time goes by. In the age of Amazon and next-day delivery, the warehouse simply cannot afford to operate with one or the other–being robots or humans. Both are a crucial part of the bigger picture that have a significant impact on business.

“The warehouse location is equally important, and the industry is extremely behind in understanding warehouse site selection,” Khasis says. “If you have a warehouse in the wrong area–even with 100 percent support from the union with the best robots on the market—it is going to be difficult because now you need different people fulfilling roles that weren’t accounted for, such as drivers. Sure, you might have a cheaper warehouse but if the location isn’t carefully considered, your savings are quickly dissolved in other valuables that weren’t modeled into the original budget. This process is also still manually done throughout the industry and can be optimized using our software.”

Each element in the process will undoubtedly impact the success and outcome of your warehouse, beginning with site selection to worker population to technology integration. In an age where business goes to people instead of people going to businesses, ensuring all parts are synchronized is a critical part of the bigger picture of gaining and maintaining competitive advantage and keeping up with an evergreen marketplace.

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Dan Khasis is a technology entrepreneur and the founder and CEO of Route4Me, a unique route optimization software. 

business
Archives, Global Trade Daily, Stories

Keeping Your Business on Track During the Coronavirus Outbreak

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The coronavirus outbreak, which is severely affecting business operations around the globe, was recently declared a global pandemic by the World Health Organization. C.H. Robinson continues to monitor the situation in the U.S. and globally, staying close to our contract carriers and discussing continuity plans in the event shipping trajectories need to be adjusted due to disruptions or closures at any ports. Although this is not the first or the last event to disrupt global supply chains, unpredictable logistics require a proactive approach for importers and exporters to keep business running as usual.

The latest in air and ocean travel

As factories and production in China return to full efficiency, the whiplash in other areas is starting to take place, particularly in consuming nations such as the U.S. and Europe. We continue to see elevated cases in developed nations that have a heavy reliance on manufacturing outside of the U.S., specifically China. Given this continued volatility, global importers are eager to restock their inventory. As a result, available capacity on the Trans-Pacific will continue to be volatile due to the removed capacity in the market.  The empty container supply has also dwindled in regions where China trade has been a catalyst, primarily North America and Europe, this can have a ripple effect if these empty containers do not get repositioned back to China to support the increase demand that is anticipated at the tail end of March into April.

Similar to China, airlines have canceled majority of passenger flights in and out of Europe and South Korea due to safety concerns and lack of travel demand. Cargo space may be constricted as certain limitations are imposed on passenger travel resulting from adjusted flight schedules and capacity. Although passenger planes have been used to transport cargo more frequently in recent years, available capacity is not heavily impacted by the cancellations due to air charter operators and blank sailings diminishing from ocean carriers. However, contract rates and transit times may need to be adjusted as the airfreight market remains fluid.

As we continue to closely monitor the situation, below are important considerations that will help keep your supply chain moving and better navigate any shipping challenges associated with the latest travel restrictions and schedule shifts.

Assessment of inventory levels

Having an accurate assessment of your inventory is expected, but it’s important to understand how limitations on imports, not only from China but around the globe, will impact your current inventory and regular shipping cadence. If you haven’t already, start discussions with your freight forward around production planning and forecasting. It’s important to look ahead to determine your transportation needs as demand is expected to surpass available capacity in the coming weeks.

Planning ahead in production

There are numerous variables to consider when planning for production. Working through these with a supply chain expert will help you be prepared and proactive as the uncertainty around the virus continues.

-What will production look like and has there been any discussion with the vendors and factories?

-How are existing inventories compared to sales projections?

-What plans are in place in case there continues to be a shortage of workers in China or the demands are not being met within a specific window of time?

-Has there been a discussion about how the backlog will be addressed?

-Where are your warehouse locations in proximity to delivery locations? Ensure you have business continuity plans in place, so deliveries are not impacted.

-Do you have enough air capacity to address decreased passenger flights?

-Is an expedited ocean or sea-air being looked at as an alternate option?

Backup sourcing options

The current backlog in China is a prime example of the importance of a diversified supply chain – including modes of transportation, carriers and sourcing locations. When there is any kind of delayed start to production, keeping up with the workload poses a challenge, and backup sources may need to be considered. Additional sourcing options are not always easy to find and keeping up with the sheer demand and quality controls can be a challenge. Connecting with a global supply chain expert to vet reliable options is important to help ensure success.

While we may not know how long this global pandemic will last, C.H. Robinson’s global network of experts are dedicated to helping you get your shipments where they need to be. We continue to closely monitor the situation and provide updates through our client advisories as needed. We encourage you to reach out to your account manager or connect with an expert for additional questions.

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Sri Laxmana is the Vice President of Global Ocean Product at C.H. Robinson

stethoscope
Archives, Global Trade Daily, News

Global Stethoscope Market to Hit US$520 Million by 2026

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Global Stethoscope Market value over US$520 Million by 2026 end and register a CAGR of over 5% from 2020 to 2026. The rise in the geriatric population prone to chronic disorders coupled with a mounting need for advanced diagnostic devices across the globe is likely to drive the stethoscope market outlook.

The rise in the occurrence of cardiovascular diseases stemming from the widespread adoption of sedentary lifestyles and unhealthy eating habits is resulting in increased stethoscope industry demand. Recent technological advancements in diagnostics tools along with an increase in R&D activities by key industry players may foster the stethoscope market size. Moreover, development and introduction of advanced electronic stethoscope with wireless Bluetooth technology may further augment product penetration over the coming years. Stethoscope market size is touted to cross the USD 520 million mark by 2026.

Product-wise, the stethoscope market is segmented into electronic and acoustic stethoscopes. The electronic stethoscope segment is expected to grow at 5.5% over the analysis period. Such robust growth can be attributed to the variety of advantageous features offered by the product, such as ambient noise reduction, amplified sound output, enhanced frequency range, reduced time to get an accurate reading, visual display, and record & replay capabilities.

Usability-wise, stethoscopes are categorized as disposable and reusable. Disposable/single-use stethoscopes market is touted to grow at 6% over the projected timeframe. Increasing awareness among medical professionals pertaining to the prevention of cross-contamination and disease transmission is resulting in the massive adoption of disposable stethoscopes. Some healthcare facilities issue patients with single-use stethoscope in a bid to avoid cross-contamination and risk of disease transmission, which is likely to change industry trends in the coming years.

Based on end-user, the market is segmented into physician offices, hospitals, ambulatory surgical centers, academic institutes, urgent care centers, and others. In 2019, the ambulatory surgical centers’ segment generated a revenue of more than USD 78 million. As per the National Health Statistics, around 47% of surgical procedures are conducted in the ambulatory surgical centers across the U.S. annually. Increasing patient preference for outpatient procedures will augment the use of stethoscopes in ambulatory surgical centers, hence supplementing industry share.

Speaking in terms of head design, the stethoscope market is segmented as a single, double and triple head. Of all the three segments, the double head stethoscope segment held the majority of market share accounting for over USD 220 million in 2019.  These stethoscopes are considered to be the most durable and efficient models. Also, double head stethoscopes are cost-effective and often used in emergency situations by medical professionals owing to efficient and quick diagnostic results. Increasing demand and adoption rate of the model will positively impact market growth.

Key players contributing to stethoscope market expansion include American Diagnostic Company, 3M, Cardionics, HEINE Optotechnik, GF Health Products, McCoy, Invacare Supply Group, etc.

Source Credit: Global Market Insights, Inc.

ireland
Archives, EU Trade, Global Trade Daily

NORTHERN IRELAND ISN’T WAITING ON POST-BREXIT TRADE DEAL TO COURT U.S. INVESTORS

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A Trade Agreement for the “Whole of the U.K.”

On March 2, 2020 the United Kingdom (U.K.) released its public negotiating objectives for a free trade agreement with the United States, its largest bilateral trading partner. In pursuing increased trade in goods and services and greater cross-border investment, the U.K government seeks an “agreement that works for the whole of the U.K.,” including “all four constituent nations,” and that takes account of the Northern Ireland Protocol that aims to avoid the introduction of a hard border on the island of Ireland. The United States released its objectives for talks with the U.K. in February of 2019.

Trade agreements are a valuable tool governments use to generate broad economic benefits, but negotiations can take time and outcomes are uncertain. Many governments simultaneously deploy export and investment promotion agencies to promote access to new markets for its companies or attract investments that will create jobs at home.

Usually affiliated with government, these agencies may promote the image and offerings of the home market, provide export training, offer support in identifying partners or specific business opportunities, organize trade fairs or trade missions, and conduct research and market analysis. They may be based domestically and maintain offices abroad.

The U.K. has enjoyed longstanding success in attracting inbound investment, but with uncertainties surrounding the implementation and impact of Brexit, U.K. trade and investment promotion agencies have a key role to play in promoting a thriving post-Brexit economic future. Although the U.K.’s Department for International Trade is on the front lines in providing trade and investment services, another agency — Invest Northern Ireland (Invest NI) — is specifically focused on making sure benefits accrue to Northern Ireland.

Banking on Belfast

Formed in Belfast in 2002 through a consolidation of the departments of trade, investment, and research and development, Invest NI helps new and existing Northern Irish businesses to compete internationally and works to attract new investment to Northern Ireland. The organization has over 600 professionals in its network, with business advisors across Northern Ireland, and throughout Europe, the Americas, Asia and the Middle East. With U.S.-U.K. commercial relations in the headlines, we spoke with Peta Conn, the Boston-based Executive Vice President and Head of Americas for Invest NI about the narrative she shares.

“Northern Ireland’s strength is its talent – a growing youth population, excellent universities and people who want to stay. We offer a strong ecosystem that brings together government, academia and business. There is a real focus on ensuring we can cater to future demand for skills. I’d add that Northern Ireland offers a great lifestyle and one that is affordable. Many come for the business and stay for the life.”

Look at Belfast

Key industries in Northern Ireland include financial services, legal services and cyber security. According to FT fDi Markets, Belfast has been ranked as the world’s number one destination for financial technology development projects, the top city in Europe for new software development projects, and the number one international location for U.S. cyber security development projects.

Conn highlighted the importance of testimonials, including the vote of confidence from Boston-based security analytics software and services firm Rapid7, which announced in October 2014 it would set up a software innovation center in Boston’s sister city of Belfast, creating high-paying jobs. Speaking of the investment at that time, Rapid7 CEO Corey Thomas pointed to the work that Northern Ireland’s universities were doing in IT security and the availability of high-quality technical staff.

The Hunt for Talent

Despite the uncertainties of Brexit, Conn noted that the last few years have seen some of the strongest foreign direct investment flows out of the United States into Northern Ireland. “It’s really about the need for talent and an immediate need for developers.”

That talent flows from Northern Ireland’s two major universities – Queens University Belfast and Ulster University. Both are leaders in innovative research, and Queens is home to the Centre for Secure Information Technologies, the U.K.’s national innovation and knowledge center for cyber security.

“If you want development operations or software, you can do this at Belfast salaries that are 20 percent lower than Dublin and 30 percent lower than London, and also have lower workforce attrition.”

NI's human talent

The Tools

Conn leads the Americas team, which includes a dozen people in Boston and 28 people in total across the region, in New York, Chicago, San Francisco, Miami, Toronto, Santiago, and, as of very recently, Los Angeles. In addition to promoting foreign direct investment, the team also helps Northern Ireland companies export to the United States.

Their performance indicators are based on employment and economic growth. Sales teams work to identify prospective investors and explain how Northern Ireland could fit within their growth strategies. Business development teams then offer customized solutions of how the market can specifically support business plans.

Once a company has committed to set up in Northern Ireland, one of the programs on offer is a pre-employment program called Assured Skills, which is unique to the region. Companies can co-design an academy-style course with a local training institution and then recruit a cohort of potential employees to take the course. At its conclusion, all participants are offered a job interview, thus de-risking the recruitment process and leading to a conversion rate of about 90 percent.

Crushing It

As U.S.-U.K. trade talks get underway, politics in both countries and the U.K.’s parallel negotiations with the EU, make the timing of any deal uncertain. The issue of Northern Ireland, which under the U.K.’s Withdrawal Agreement with the European Union (EU), remains part of the UK customs territory but subject to EU regulations, will be a focus of attention among U.S. lawmakers insistent on avoiding a hard border in Ireland and protecting the 1998 peace agreement that helped bring an end to conflict in the region.

A U.K. trade deal with the United States may bring modest benefits for Northern Ireland as government analysis suggests, but the Rt. Hon. Brandon Lewis, Secretary of State for Northern Ireland, has emphasized: “The United Kingdom is going to be one area and all will be able to benefit from our future global trade deals.”

While the talks proceed, Invest NI will continue to offer a compelling narrative of innovation, entrepreneurship, and opportunities to invest in Northern Ireland. Their stories will include everything from sophisticated software development to Northern Ireland’s dominance in producing 40 percent of the world’s mobile crushing machines and manufacturing a third of the world’s airline seats.

Like free trade agreement talks, investment promotion involves understanding long-term strategy direction and the areas of an economy’s competitive advantage. Invest NI will remain an important complement to U.K. government trade negotiation efforts, serving as the messenger of an economy that is open for business.

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Leslie Griffin is Principal of Boston-based Allinea LLC. She was previously Senior Vice President for International Public Policy for UPS and is a past president of the Association of Women in International Trade in Washington, D.C.

This article originally appeared on TradeVistas.org. Republished with permission.

CFIUS
Archives, Global Trade Daily, In The News

Treasury Proposes Filing Fees for CFIUS Voluntary Notices

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On Monday, March 9, 2020, the U.S. Department of the Treasury (“Treasury Department”) published a proposed rule in the Federal Register establishing a tiered filing fee system for parties filing voluntary notices with the Committee on Foreign Investment in the United States (“CFIUS”). The proposed rule accompanies other recently implemented regulations issued by the Treasury Department that implement the Foreign Investment Review Modernization Act of 2018 (“FIRRMA”), effective since February 13, 2020.  We have previously summarized the FIRRMA implementing regulations here and here.

FIRRMA expanded the scope of transactions subject to CFIUS review and modernized the review process. FIRRMA also authorized CFIUS to collect filing fees up to the lesser of 1 percent of the value of a transaction or $300,000. The proposed rule establishes a fee structure intended, according to the Treasury Department, to “not discourage filings and…allow parties to continue the practice of determining whether to file a voluntary written notice based on an evaluation of the facts and circumstances of the transaction.” The fees were set to only be a small proportion of the value of any transaction, in order to avoid discouraging voluntary filings. Under the proposed fee structure, the required fees are in proportion to the value of the transaction, as follows:

The same fee structure applies to both foreign investments under Part 800 and real estate transactions under Part 802. Fee requirements are only in place for voluntary CFIUS notices, however, and there are no filing fees for declarations or for unilateral reviews of transactions self-initiated by CFIUS. Accordingly, parties for whom the filing fee would be particularly burdensome, or parties engaged in low-risk transactions, can take advantage of the mandatory or voluntary declarations authorized by CFIUS under Parts 800 and 802.

The proposed rule requires parties to pay the fee at the time a notice is filed, so parties must calculate the total value of a transaction prior to filing. To calculate the value of a transaction, parties should include “the total value of all consideration that has been or will be paid in the context of the transaction by or on behalf of the foreign person who is a party to the transaction, including cash, assets, shares or other ownership interests, debt forgiveness, services, or other in-kind consideration.” Because transactions often include consideration paid in securities or non-cash assets, the rule provides the following guidance:

-Value on national securities exchange: value is calculated based on the closing price on the national securities exchange on which the securities are primarily listed on the trading day immediately prior to the date the parties file a notice with CFIUS. If the security was not traded the day prior to the date of filing, then the last published closing price will apply.

-Non-cash assets, interests, or services or other in-kind consideration:  value is calculated based on the fair market value as of the date the parties file the notice.

-Lending transaction: value is calculated based on the cash value of the loan or other similar financing arrangement.

-Conversion of contingent equity interest previously acquired by a foreign person: value is calculated including the consideration that was paid by or on behalf of the foreign person to initially acquire the contingent equity interest in addition to any other consideration.

-Real estate leases: value is calculated by the sum of fixed payments to be paid by the foreign person over the term of the lease; variable payments that depend on an index or rate over the term of the lease, measured by using the index or rate as of the date of the filing of the notice; and any non-cash or in-kind consideration to be provided by the lessee to the lessor over the term of the lease, as reasonably determined as of the date of the notice.

In light of the calculation requirements, the proposed rule also adjusts the content requirements for joint voluntary notices, requiring parties to provide the value of the transaction and the methodology used to calculate the value, along with the applicable fee.

Because parties are required to pay applicable fees at the time the notice is filed, CFIUS is authorized to delay its review until and unless the fee has been paid. In general, CFIUS will not require parties to submit double payments if it requires parties to withdraw and re-file a notice, absent a material change to the transaction or a material inaccuracy or omission in the initial filing. The proposed rule also allows for fee refunds in certain limited circumstances.

CFIUS will refund the filing fee if it later determines that the notified transaction is not a covered transaction, and it may issue partial refunds if parties can demonstrate that they paid a higher filing fee than required by the tiered fee structure. Notably, CFIUS has not indicated that it will refund the filing fees if a transaction is blocked.  Although CFIUS is also authorized to waive fees, it may only do so under “extraordinary circumstances relating to national security,” and the proposed rule states that it anticipates infrequent partial or total waivers.

The proposed fee schedule has not yet gone into effect, and it will only apply after the Treasury Department publishes its final rule.  Interested parties have until April 8, 2020, to submit comments on the proposed rule. Specifically, the Treasury Department has solicited comments from the public “on the impact of the proposed tiered fixed-fee structure and whether additional tiers or additional features should be considered.”

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By Ryan Fayhee, Roy (Ruoweng) Liu, Alan G. Kashdan, Tyler Grove and Sydney Stringer at Hughes Hubbard & Reed LLP

pandemic
Archives, Global Trade Daily, Stories

Global Trade After the Pandemic

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The staggering impact of the coronavirus pandemic on world trade is still reverberating and will for many months. Businesses are struggling to adjust to the current challenges that travel bans and factory stoppages present to their firms. They are concerned about how to keep their employees safe, informed, and on the payroll in the face of a dramatic economic turndown. But once this pandemic is over, what will its lasting impact be on global trade? How will the trade environment change and how will successful companies respond?

The jury is still out

What the final economic and personal toll of the coronavirus will be to the U.S. and global economy remains to be seen. It may take several months or years to ride out the pandemic and sort out the first stage economic loss that it will leave in its wake. The coronavirus pandemic has already drawn comparisons to the 9/11 attacks and the 1987 and 2008 recessions as far as its overall impact on the U.S. and global economy. It is a uniquely painful moment for international business, especially in regards to the movement of people and products. The recent lock-downs throughout the European Union and the travel ban from Europe to the United States, for example, have no historical precedents. Much like the world looked to regulatory changes in the wake of 9/11 or the financial cascade of problems from 2008, they will again as this initial impact recedes and governments assess how they failed to prepare for this pandemic and how they can help curtail the damage of such occurrences in the future.

Worker safety and transportation screening will be promoted

Unions, companies, and government regulators are already looking at how working conditions will need to change to better protect employees who work in the global trade trenches. From airport workers to longshoremen, workers in many key industries are exposed to cargo and passengers from overseas that potentially could be carrying new diseases across borders. The potential costs of improved detection and phytosanitary procedures will eventually be passed to consumers, but these expenses will be difficult issues to negotiate for industries that have already been hammered by first the U.S.-China trade war and then the dramatic world-wide reduction of traffic flow due to the pandemic.

Much as the terrorist attacks of 9/11 and related incidents gave rise to a host of new security measures at ports and borders, the spread of the pandemic will eventually be the subject of substantial discussion, public hearings, and eventual regulatory changes.  Governments will look for systems that would help them to better screen for potential pathogens at transportation nodes, which may include longer periods of isolation for cargo, and longer lines at the airport for global travelers (not to mention more tax funds to set up these screening and control systems).

Air and cruise industries: only the strong will survive

Passenger airlines and the cruise industry will not likely recover from the economic impact of the pandemic without some substantial government assistance. Even with that financial support, both industries will face substantial challenges to get back to a healthy volume of traffic as the pandemic brought both cruise and air traffic to a standstill. Coming on the heels of ‘flight shaming’ and a wide-spread movement to reduce their carbon emissions, as well as the Boeing crashes and 737 MAX delays, the airlines were already in a delicate position. The pandemic was the knock-out punch.  In the short term, airline CEOs such as British Airway’s Alex Cruz have noted that this is a “crisis of global proportion like no other we have known.” Airlines are projected to lose as much as $113 billion in 2020 alone. Cruises have faced similar challenges, essentially given a ‘death blow’ by the U.S. State Department warning to avoid cruise ships and port lockdowns in the Mediterranean.

What will change as a result?

The economic results of the pandemic have had some additional first-tier effects beyond border safety and damage to the transportation industry. For example, commentators have already noted that the pandemic has forced us into a great virtual working experiment. Insurance companies and their clients will be looking closely into (and likely litigating over) the responsibility for losses as a result of the pandemic. Governments will look to fix the problems we are already seeing in regards to testing and readiness. But what are the secondary effects of the pandemic for businesses? How can companies position themselves to survive and possibly benefit from the changing business landscape that awaits us?

Invest in strategy and security expertise as well as sourcing flexibility

Is this the coronavirus pandemic an isolated incident? Not according to the World Health Organization (WHO), which warns that ‘global catastrophic biological risks’ may be seen on a more regular basis in the coming decades. On top of that natural risk, consider that terrorist organizations have also seen the remarkable disruption caused by the pandemic and may attempt to weaponize biological weapons. It is a risk that governments have known about for some time, but seems even more realistic now that we’ve seen a pandemic in action and the challenges that governments face in attempting to contain it.

This future risk should result in companies spending more time and energy on both corporate strategy and security. The increasingly volatile state of the global markets means that companies will need to beef up their existing forecasting and modeling capabilities. On the risk side, security of employees and far-flung assets will take on a new urgency in the wake of the pandemic. Preparing a company that can flex and adapt in volatile times will mark the difference between companies that thrive and those that go bankrupt. Many companies will also be doing a complex overhaul of their logistics and production concepts.

The US-China trade conflict, and other isolationist tendencies that will linger after this pandemic, will encourage companies to both look closer to home for their production as well as to value the benefit of having alternative sources.  Countries like Canada, Mexico or Latin America will seem more attractive after this experience to U.S. companies. In Europe, sourcing within the EU makes much more sense once the factors of reliability and local access are properly factored into cost comparisons.

The Bottom Line

This pandemic will break firms that cannot handle the financial strain of such a dramatic and abrupt downturn. Government investment and bailouts will allow some to keep their heads above water, but others will simply disappear. Those that do survive will find a different global trade environment: one that demands a greater focus on logistics flexibility and security and the ability to succeed in an international business environment that has new regulatory boundaries which will challenge ‘just in time’ concepts and put a greater value on diverse and more local sourcing. As with all challenges, this situation will also bring opportunities – companies whose products foster virtual communication in businesses and provide equipment that can identify and protect workers from biological agents will see a new surge in interest.  Global world trade will not be killed by this pandemic, but it will have a different and potentially more chaotic nature.

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Kirk Samson is the owner of Samson Atlantic LLC, a Chicago-based international business consulting company that offers market research, political risk assessment, and international expansion assistance. Mr. Samson is a former U.S. diplomat and international law advisor who lived and worked in ten different countries.

rye
Archives, Global Trade Daily, Imports/Exports

U.S. Rye Production Dropped for a Third Consecutive Year in 2018

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

The U.S. rye market rose by 16% to reach  $362M in 2018. Over the last decade, rye consumption continues to indicate a resilient expansion. The growth pace was the most rapid in 2013 with an increase of 29% against the previous year. Rye consumption peaked at $364M in 2015; however, from 2016 to 2018, consumption failed to regain its momentum.

Market Forecast

Driven by increasing demand for rye in the U.S., the market is expected to continue an upward consumption trend over the next decade. Market performance is forecast to decelerate, expanding with an anticipated CAGR of +3.4% for the period from 2018 to 2030, which is projected to bring the market volume to 728K tonnes by the end of 2030.

U.S. Production

Rye production in the U.S. totaled 214K tonnes in 2018, going down by -17.8% against the previous year. Based on 2018 figures, rye production decreased by -26.7% against 2015 indices. The pace of growth was the most pronounced in 2015 when production volume increased by 60% against the previous year. In that year, rye production attained its peak volume of 292K tonnes. From 2016 to 2018, rye production growth failed to regain its momentum.

Harvested Area and Yield

In 2018, the rye harvested area in the U.S. stood at 110K ha, lowering by -9% against the previous year. The average yield of rye totaled 1.9 tonne per ha, shrinking by -9.6% against the previous year. From 2007 to 2018, the yield figure increased at an average annual rate of +1.9% over the period .

Exports from the U.S.

Rye exports from the U.S. amounted to 3.6K tonnes in 2018, lowering by -13% against the previous year.

In value terms, rye exports amounted to $3.6M (IndexBox estimates) in 2018. Over the period under review, rye exports reached their peak figure at $6.6M in 2013; however, from 2014 to 2018, exports remained at a lower figure.

Exports by Country

South Korea (583 tonnes), Japan (392 tonnes) and Canada (135 tonnes) were the main destinations of rye exports from the U.S., with a combined 31% share of total exports.

From 2007 to 2018, the most notable rate of growth in terms of exports, amongst the main countries of destination, was attained by Japan, while exports for the other leaders experienced a decline.

Export Prices by Country

In 2018, the average rye export price amounted to $993 per tonne, growing by 16% against the previous year. Prices varied noticeably by the country of destination; the country with the highest price was South Korea ($4,780 per tonne), while the average price for exports to the U.S. ($993 per tonne) was amongst the lowest.

From 2007 to 2018, the most notable rate of growth in terms of prices was recorded for supplies to Canada, while the prices for the other major destinations experienced more modest paces of growth.

Imports into the U.S.

In 2018, the amount of rye imported into the U.S. amounted to 279K tonnes, jumping by 53% against the previous year. In value terms, rye imports stood at $68M (IndexBox estimates) in 2018.

Imports by Country

Canada (162K tonnes), Germany (85K tonnes) and Sweden (23K tonnes) were the main suppliers of rye imports to the U.S., together comprising 97% of total imports. These countries were followed by Denmark, which accounted for a further 2.7%.

From 2007 to 2018, the most notable rate of growth in terms of imports, amongst the main suppliers, was attained by Denmark, while imports for the other leaders experienced more modest paces of growth.

In value terms, Canada ($43M) constituted the largest supplier of rye to the U.S., comprising 14% of total rye imports. The second position in the ranking was occupied by Germany ($18M), with a 5.8% share of total imports. It was followed by Sweden, with a 1.3% share.

From 2007 to 2018, the average annual growth rate of value from Canada amounted to +12.4%. The remaining supplying countries recorded the following average annual rates of imports growth: Germany (+3.2% per year) and Sweden (+14.2% per year).

Import Prices by Country

In 2018, the average rye import price amounted to $242 per tonne, shrinking by -2.5% against the previous year. There were significant differences in the average prices amongst the major supplying countries. In 2018, the country with the highest price was Denmark ($317 per tonne), while the price for Sweden ($172 per tonne) was amongst the lowest.

From 2007 to 2018, the most notable rate of growth in terms of prices was attained by Canada.

Source: IndexBox AI Platform