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Global Cotton-Seed Oil Market – Production Rose 2.7% to Reach 5.7M tonnes in 2018

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Global Cotton-Seed Oil Market – Production Rose 2.7% to Reach 5.7M tonnes in 2018

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

The global cotton-seed oil market revenue amounted to $8.2B in 2018, falling by -3.6% 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). The market value increased at an average annual rate of +2.3% from 2007 to 2018; the trend pattern indicated some noticeable fluctuations being recorded in certain years. The pace of growth appeared the most rapid in 2011 with an increase of 13% y-o-y. The global cotton-seed oil consumption peaked at $8.9B in 2013; however, from 2014 to 2018, consumption stood at a somewhat lower figure.

Consumption By Country

The countries with the highest volumes of cotton-seed oil consumption in 2018 were India (1.6M tonnes), China (1.4M tonnes) and Pakistan (470K tonnes), together comprising 62% of global consumption. These countries were followed by Brazil, Australia, Uzbekistan, Turkey, the U.S., Burkina Faso and Myanmar, which together accounted for a further 25%.

From 2007 to 2018, the most notable rate of growth in terms of cotton-seed oil consumption, amongst the main consuming countries, was attained by Myanmar, while the other global leaders experienced more modest paces of growth.

In value terms, India ($3.5B) led the market, alone. The second position in the ranking was occupied by China ($1.5B). It was followed by Pakistan.

The countries with the highest levels of cotton-seed oil per capita consumption in 2018 were Australia (10,839 kg per 1000 persons), Uzbekistan (7,845 kg per 1000 persons) and Burkina Faso (4,923 kg per 1000 persons).

From 2007 to 2018, the most notable rate of growth in terms of cotton-seed oil per capita consumption, amongst the main consuming countries, was attained by Myanmar, while the other global leaders experienced more modest paces of growth.

Market Forecast 2019-2025

Driven by increasing demand for cotton-seed oil worldwide, the market is expected to continue an upward consumption trend over the next seven-year period. Market performance is forecast to retain its current trend pattern, expanding with an anticipated CAGR of +1.4% for the seven-year period from 2018 to 2025, which is projected to bring the market volume to 6.3M tonnes by the end of 2025.

Production 2007-2018

In 2018, the amount of cotton-seed oil produced worldwide stood at 5.7M tonnes, going up by 2.7% against the previous year. The total output volume increased at an average annual rate of +1.0% over the period from 2007 to 2018; the trend pattern remained relatively stable, with only minor fluctuations over the period under review. The pace of growth was the most pronounced in 2011 with an increase of 6.5% y-o-y. The global cotton-seed oil production peaked in 2018 and is likely to continue its growth in the immediate term.

In value terms, cotton-seed oil production stood at $7.4B in 2018 estimated in export prices. Over the period under review, the total output indicated a modest increase from 2007 to 2018: its value increased at an average annual rate of +1.0% over the last eleven years. The trend pattern, however, indicated some noticeable fluctuations being recorded throughout the analyzed period. The pace of growth appeared the most rapid in 2012 with an increase of 24% y-o-y. The global cotton-seed oil production peaked at $9.4B in 2013; however, from 2014 to 2018, production failed to regain its momentum.

Production By Country

The countries with the highest volumes of cotton-seed oil production in 2018 were India (1.6M tonnes), China (1.4M tonnes) and Pakistan (470K tonnes), together accounting for 61% of global production. These countries were followed by Brazil, Australia, Uzbekistan, the U.S., Turkey, Burkina Faso and Myanmar, which together accounted for a further 26%.

From 2007 to 2018, the most notable rate of growth in terms of cotton-seed oil production, amongst the main producing countries, was attained by Australia, while the other global leaders experienced more modest paces of growth.

Exports 2007-2018

In 2018, approx. 168K tonnes of cotton-seed oil were exported worldwide; picking up by 17% against the previous year. In general, cotton-seed oil exports, however, continue to indicate a mild slump. The most prominent rate of growth was recorded in 2008 when exports increased by 18% y-o-y. In that year, global cotton-seed oil exports reached their peak of 234K tonnes. From 2009 to 2018, the growth of global cotton-seed oil exports remained at a lower figure.

In value terms, cotton-seed oil exports amounted to $144M (IndexBox estimates) in 2018. In general, cotton-seed oil exports, however, continue to indicate a temperate deduction. The most prominent rate of growth was recorded in 2008 when exports increased by 18% year-to-year. In that year, global cotton-seed oil exports attained their peak of $237M. From 2009 to 2018, the growth of global cotton-seed oil exports remained at a somewhat lower figure.

Exports by Country

The U.S. (47K tonnes) and Australia (42K tonnes) represented the key exporters of cotton-seed oil in 2018, resulting at approx. 28% and 25% of total exports, respectively. Kazakhstan (16K tonnes) held a 9.7% share (based on tonnes) of total exports, which put it in second place, followed by Malaysia (5.7%). The following exporters – Benin (7,036 tonnes), Argentina (6,725 tonnes), Azerbaijan (5,989 tonnes), South Africa (5,630 tonnes), Burkina Faso (4,310 tonnes) and Brazil (3,637 tonnes) – together made up 20% 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 Australia, while the other global leaders experienced more modest paces of growth.

In value terms, the largest cotton-seed oil markets worldwide were the U.S. ($42M), Australia ($25M) and Kazakhstan ($14M), together accounting for 56% of global exports.

In terms of the main exporting countries, Australia experienced the highest growth rate of exports, over the last eleven years, while the other global leaders experienced more modest paces of growth.

Export Prices by Country

In 2018, the average cotton-seed oil export price amounted to $857 per tonne, declining by -2.4% against the previous year. In general, the cotton-seed oil export price continues to indicate a mild descent. The growth pace was the most rapid in 2010 an increase of 6.8% against the previous year. Over the period under review, the average export prices for cotton-seed oil attained their maximum at $1,012 per tonne in 2008; however, from 2009 to 2018, export prices stood at a somewhat lower figure.

Prices varied noticeably by the country of origin; the country with the highest price was South Africa ($1,396 per tonne), while Azerbaijan ($558 per tonne) was amongst the lowest.

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

Imports 2007-2018

Global imports stood at 141K tonnes in 2018, picking up by 14% against the previous year. Overall, cotton-seed oil imports continue to indicate a relatively flat trend pattern. The most prominent rate of growth was recorded in 2011 with an increase of 36% year-to-year. The global imports peaked at 162K tonnes in 2013; however, from 2014 to 2018, imports failed to regain their momentum.

In value terms, cotton-seed oil imports totaled $132M (IndexBox estimates) in 2018. Overall, cotton-seed oil imports continue to indicate a relatively flat trend pattern. The most prominent rate of growth was recorded in 2011 when imports increased by 33% year-to-year. Over the period under review, global cotton-seed oil imports attained their peak figure at $155M in 2008; however, from 2009 to 2018, imports stood at a somewhat lower figure.

Imports by Country

In 2018, Mexico (16,353 tonnes), Malaysia (14,348 tonnes), Australia (13,963 tonnes), Saudi Arabia (12,915 tonnes), Tajikistan (11,277 tonnes), South Africa (8,493 tonnes), Nigeria (8,024 tonnes), Germany (6,365 tonnes), Canada (6,355 tonnes), India (6,036 tonnes), Uzbekistan (5,582 tonnes) and Kyrgyzstan (4,855 tonnes) were the major importers of cotton-seed oil in the world, achieving 81% of total import.

From 2007 to 2018, the most notable rate of growth in terms of imports, amongst the main importing countries, was attained by Saudi Arabia (+85.1% per year), while the other global leaders experienced more modest paces of growth.

In value terms, Australia ($16M), Malaysia ($15M) and Mexico ($15M) appeared to be the countries with the highest levels of imports in 2018, with a combined 35% share of global imports. These countries were followed by Tajikistan, Nigeria, Canada, South Africa, Germany, India, Uzbekistan, Kyrgyzstan and Saudi Arabia, which together accounted for a further 40%.

In terms of the main importing countries, Tajikistan experienced the highest rates of growth with regard to imports, over the last eleven-year period, while the other global leaders experienced more modest paces of growth.

Import Prices by Country

The average cotton-seed oil import price stood at $939 per tonne in 2018, dropping by -2.4% against the previous year. Over the period under review, the cotton-seed oil import price, however, continues to indicate a relatively flat trend pattern. The growth pace was the most rapid in 2008 an increase of 18% year-to-year. Over the period under review, the average import prices for cotton-seed oil reached their maximum at $1,116 per tonne in 2010; however, from 2011 to 2018, import prices failed to regain their momentum.

Prices varied noticeably by the country of destination; the country with the highest price was Canada ($1,220 per tonne), while Saudi Arabia ($6.6 per tonne) was amongst the lowest.

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

Source: IndexBox AI Platform

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Archives, Global Trade Daily, News

Global Woven Woolen Fabric Market 2019 – Italy is Far Ahead of China in Export Value, but Their Volumes are Getting Closer

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

Exports 2009-2018

In 2018, the global exports of woven woolen fabrics amounted to 90M square meters, falling by -3.8% against the previous year. In general, woolen fabric exports continue to indicate a slight decline. The pace of growth appeared the most rapid in 2010 when exports increased by 21% y-o-y. The global exports peaked at 132M square meters in 2011; however, from 2012 to 2018, exports remained at a lower figure.

In value terms, woolen fabric exports stood at $3.5B (IndexBox estimates) in 2018. In general, woolen fabric exports continue to indicate a relatively flat trend pattern. The pace of growth was the most pronounced in 2011 when exports increased by 16% against the previous year. In that year, global woolen fabric exports reached their peak of $4.2B. From 2012 to 2018, the growth of global woolen fabric exports failed to regain its momentum.

Exports by Country

In 2018, Italy (30M square meters) and China (21M square meters) represented the key exporters of woven woolen fabrics across the globe, together mixing up 57% of total exports. It was distantly followed by the UK (5,267K square meters), achieving a 5.9% share of total exports. Germany (3,841K square meters), Japan (3,302K square meters), South Korea (3,249K square meters), the Czech Republic (2,641K square meters), Turkey (1,662K square meters), Denmark (1,447K square meters) and Lithuania (1,369K square meters) followed a long way behind the leaders.

From 2009 to 2018, the most notable rate of growth in terms of exports, amongst the main exporting countries, was attained by Lithuania, while the other global leaders experienced more modest paces of growth.

In value terms, Italy ($1.6B) remains the largest woolen fabric supplier worldwide, comprising 44% of global exports. The second position in the ranking was occupied by China ($414M), with a 12% share of global exports. It was followed by the UK, with a 7.4% share.

In Italy, woolen fabric exports increased at an average annual rate of +1.6% over the period from 2009-2018. The remaining exporting countries recorded the following average annual rates of exports growth: China (-0.0% per year) and the UK (+7.2% per year).

Export Prices by Country

The average woolen fabric export price stood at $39 per square meter in 2018, rising by 16% against the previous year. Over the period from 2009 to 2018, it increased at an average annual rate of +1.8%. The most prominent rate of growth was recorded in 2018 when the average export price increased by 16% against the previous year. In that year, the average export prices for woven woolen fabrics attained their peak level and is likely to continue its growth in the immediate term.

Prices varied noticeably by the country of origin; the country with the highest price was Japan ($58 per square meter), while South Korea ($18 per square meter) was amongst the lowest.

From 2009 to 2018, the most notable rate of growth in terms of prices was attained by Japan, while the other global leaders experienced more modest paces of growth.

Imports 2009-2018

In 2018, the amount of woven woolen fabrics imported worldwide stood at 91M square meters, going down by -3.1% against the previous year. In general, woolen fabric imports continue to indicate a mild setback. The most prominent rate of growth was recorded in 2010 when imports increased by 9.7% year-to-year. Over the period under review, global woolen fabric imports attained their maximum at 119M square meters in 2011; however, from 2012 to 2018, imports stood at a somewhat lower figure.

In value terms, woolen fabric imports stood at $3.3B (IndexBox estimates) in 2018. Overall, woolen fabric imports continue to indicate a relatively flat trend pattern. The growth pace was the most rapid in 2011 when imports increased by 15% against the previous year. In that year, global woolen fabric imports reached their peak of $4.1B. From 2012 to 2018, the growth of global woolen fabric imports remained at a somewhat lower figure.

Imports by Country

In 2018, China (8,571K square meters), Viet Nam (7,399K square meters), Italy (4,978K square meters), Germany (4,593K square meters), Romania (4,076K square meters), Japan (3,780K square meters), Turkey (3,532K square meters), Morocco (3,115K square meters), Spain (3,056K square meters), the U.S. (3,029K square meters), the UK (2,379K square meters) and Bulgaria (2,278K square meters) were the major importers of woven woolen fabrics in the world, making up 56% of total import.

From 2009 to 2018, the most notable rate of growth in terms of imports, amongst the main importing countries, was attained by Viet Nam, while the other global leaders experienced more modest paces of growth.

In value terms, China ($377M), Germany ($201M) and Japan ($193M) were the countries with the highest levels of imports in 2018, together comprising 23% of global imports. These countries were followed by Viet Nam, Italy, Romania, the U.S., Turkey, Bulgaria, Spain, Morocco and the UK, which together accounted for a further 33%.

Viet Nam experienced the highest rates of growth with regard to imports, in terms of the main importing countries over the last nine years, while the other global leaders experienced more modest paces of growth.

Import Prices by Country

The average woolen fabric import price stood at $37 per square meter in 2018, picking up by 6.6% against the previous year. Over the period from 2009 to 2018, it increased at an average annual rate of +1.7%. The most prominent rate of growth was recorded in 2011 an increase of 13% year-to-year. Over the period under review, the average import prices for woven woolen fabrics reached their maximum at $37 per square meter in 2014; however, from 2015 to 2018, import prices stood at a somewhat lower figure.

There were significant differences in the average prices amongst the major importing countries. In 2018, the country with the highest price was Japan ($51 per square meter), while Morocco ($25 per square meter) was amongst the lowest.

From 2009 to 2018, the most notable rate of growth in terms of prices was attained by China, while the other global leaders experienced more modest paces of growth.

Source: IndexBox AI Platform

supply chain finance
Archives, Banking, Global Trade Daily, Stories

5 Companies to Consider for Supply Chain Finance

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Supply chain finance is a set of technology-based business and financing processes that link the various parties in a transaction—buyer, seller and financing institution— to lower financing costs and improve business efficiency. Short-term credit that optimizes working capital for both the buyer and the seller is provided by what the hip kids refer to as SCF.

There are several SCF transactions, including an extension of buyer’s accounts payable terms, inventory finance and payables discounting. The SCF solutions differ from traditional supply chain programs to enhance working capital, such as factoring and payment discounts, by connecting financial transactions to value as it moves through the supply chain. Also, SCF encourages collaboration between the buyer and seller, rather than the competition that often pits buyer against the seller and vice versa.

Tom Roberts, senior vice president of Marketing at PrimeRevenue, warned Global Trade readers in September 2016 that a multinational bank may not be the way to go when it comes to SCF. “First, both global supply chains and multinational banks are highly susceptible to changes in the economic and geopolitical landscape,” Roberts wrote. “Supply chain finance programs that are locked into a single source of funding are held hostage to that funder’s risk tolerance. It’s a dangerous game, especially as the global coverage of multinational banks continues to be a moving target.”

No one bank—no matter how global—has the processes and systems in place to serve all currencies and jurisdictions, he also noted. “If a company needs to add a supplier that can’t be funded by their multinational bank, they have to not only source alternative funding, they have to handle the back-end systems integration required to facilitate the trading of receivables. It’s a resource-intensive approach that many companies simply can’t afford.”

The best-in-class supply chain finance programs are typically based on multi-funder platforms, rather than closed, bank-proprietary platforms, according to Roberts. “While it may seem counter-intuitive to simplify supply chain finance by adding more players, it’s not,” he wrote. “With the right processes and systems in place, a multi-funder strategy can increase program participation, secure more competitive pricing and discounts, and ultimately increase cash flow predictably and sustainably for both buyers and suppliers.”

What follows are Global Trade’s picks for places to consider for SCF.

Raistone Capital

Located on Madison Avenue in New York City, Raistone Capital started as a division of Seaport Global, a full-service, independent investment bank. Today, Raistone Capital has access to significant levels of institutional capital and the ability to deliver on customer’s needs, “whether it’s $50,000 or $300,000,000+,” according to the company. Raistone even created invoiceXcel (iX), a complementary financial solution so banks “can continue to serve clients in this ever-changing regulatory environment by providing additional capital offerings to customers—such as supply chain finance and accounts receivable finance.” 

Flexport

Headquartered in San Francisco—with global offices in several major U.S. cities as well as Hong Kong, mainland China, Germany and Holland—Flexport offers clients lines of credit ranging from $100,000 to $20 million to finance inventory, freight and duty and so that customers can accelerate product expansion and revenue growth; enable strategic decisions that reduce landed costs; and minimize supply chain disruption. Best of all, it costs nothing to connect with a Flexport Capital expert to discuss how your supplier terms, customer terms, and capital structure can be optimized to support your working capital goals and business growth. 

PrimeRevenue

Giving the expertise Tom Roberts has already shared via Global Trade, how could we in good conscience skip over his Atlanta-based company that also has offices in Hong Kong, Australia, London, Frankfurt, and Prague. Billed as “the leading provider of working capital financial technology solutions,” PrimeRevenue helps more than 30,000 clients in 70+ countries optimize their working capital to efficiently fund strategic initiatives, gain a competitive advantage and strengthen relationships throughout the supply chain. Established in 2003, PrimeRevenue boasts of now having “the largest and most diverse global funding network of more than 100 funding partners.” They support 30+ currencies on a single cloud-based, multi-lingual, cross-border network, facilitating a volume of more than $200 billion in payment transactions per year.

Trade Finance Global

London-based TFG assists companies with raising debt finance, accessing many traditional forms of finance while also specializing in alternative finance and complex funding solutions related to international trade. “We help companies to raise finance in ways that are sometimes out of reach for mainstream lenders,” according to the company, which taps into more than 250 lenders with unique focuses on different products and/or geographies. And TGF boasts of being able to “quickly get to the key decision-makers of financiers, to make sure your application gets through to the right person.” That ability is built on reputation alone, as TGF is 100 percent independent and not tied to any lenders. Instead, they find the most appropriate SCF solution for the individual customer.

Bank of America Merrill Lynch

Okay, much of this article details why a multinational bank may not be the best option when it comes to SCF, but Charlotte, North Carolina-based Bank of America Merrill Lynch, which also has central hubs in New York City, London, Hong Kong, Minneapolis, and Toronto, does have a solid, end-to-end SCF program. Bank of America Merrill Lynch boasts of having a number of tools to help: segment suppliers and analyze rates; design an optimal marketing program; and educate suppliers on program benefits.

“Bank of America Merrill Lynch made sure that the resources needed—support staff, legal, credit and such—all worked towards achieving the efficient deployment of the program,” says Philippe Andre Marcoux, credit and treasury manager at SCF customer Uni-Select Inc., a large multiservice corporation that distributes motor vehicle replacement parts, tools equipment and accessories. “Communication between Bank of America Merrill Lynch, our suppliers and ourselves was the driving force behind the successful implementation. Tools to evaluate the benefits to our suppliers and ourselves were key in convincing our team to participate.” 

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Blume CarrierGo Provides Motor Carriers with All-Encompassing Business Solutions

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This year’s Intermodal Expo in Long Beach, California featured some of the latest solution offerings disrupting the transportation sector. Among leading industry experts including logistics and supply chain solutions provider, Blume Global unveiling their latest product offering, Blume CarrierGo. Blume Global boasts over 25 years of transportation solution offerings in the cloud enabling international multimodal operations including shipment planning, execution, visibility, invoicing, invoice processing & settlement.

“Blume CarrierGo is a product we created that offers our global network of 7,000-plus carriers more than just execution, adding more value for both the carriers and the drivers,” explains Glenn Jones, GVP Product Strategy at Blume Global. “CarrierGo is localized in 22 languages and utilized by customers around the globe, so it’s not limited to the United States. This solution enables carriers to increase turns per day while reducing empty miles and maximizing efficiencies.” 

The days of manual processes are becoming a thing of the past, particularly in transportation and carrier services as automation continues setting a new and more improved standard of streamlining operations. Blume CarrierGo solution identifies processes such as appointment scheduling for carriers lacking levels of automation needed for optimization. Another example is opportunities with street turns found within the Blume import and export-heavy freight forwarding customers.

“We have insight into what independent freight forwarders might not be able to see, such as import and export maps leading to an opportunity for a street turn recommendation or automatic allocation. Dwell times also provide an opportunity for automation. We may have 20, 30, or even 50 carriers trying to pick up containers out of the same terminal. By leveraging our visibility across multiple freight forwarders we can either make recommendations or we can delay making appointments through the insight we have into marine terminals with delays,” Jones adds. 

And how about invoicing? Blume covers all bases for carriers in terms of accessorials and eliminating the element of surprise when it comes to unpredictable charges backing up processing times. The Blume solutions process requires carriers to gain approval for accessorials before they even happen. 

“If a carrier needs to get to a port and they’re unable to, there might be a demurrage charge or there might be a carrier in a dwell time charge situation unexpectedly. They can gain approval from the buyer for that accessorial and when it appears on the invoice days – or hours later, there’s no surprise and the invoice will be processed faster,” Jones adds. “This is particularly useful for carriers in 3rd world countries, where the carriers tend to be much smaller and require payments quicker than what the freight terms offer,” Jones adds. 

Processes like these are found within the CarrierGo solution, providing maximized efficiencies and reducing costly and time-consuming overhead freight audits and manual payment processes. Carriers are not only paid on time, but have increased opportunity for invoice factoring discussions in international markets. This is a major differentiator found within the Blume solutions structure impacting global scale capabilities across the supply chain, creating seamless flows between all players and competitors in the multimodal sector. 

For more information about how Blume CarrierGo can improve your cargo needs, please visit booth 512 at Intermodal Expo or visit Blume Global on the web. 

__________________________________________________________

Glenn Jones, GVP Product Strategy, Blume Global

 Glenn has a proven track record of growing businesses by building and leading product management/marketing and R&D organizations to define, develop, position, and sell highly innovative and high value enterprise solutions delivered in the cloud. He was formerly the COO of Sweetbridge and the CTO of Steelwedge Software. He also held leadership positions at several other companies, including Elementum and E2Open.

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Archives, Global Trade Daily, International Trade

8 Strategies to Navigate Trade and Tariff Volatility

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A steady drumbeat of tariffs, changing trade policy and an overall environment of uncertainty are leading many manufacturers to take a “wait and see” approach to investment and expansion. Companies are reassessing spending plans, finding it challenging to adjust how they do business on the fly in response to unsettled trade policies.

Manufacturers have seen the effects in the cost of raw materials, which has led customers with long-term pricing agreements to push back. Some are finding they need to negotiate changes to contract terms, while others are faced with locating new supply sources. However, these are difficult changes to make, and companies are unsure whether to push forward as uncertainty over tariff amounts, origin, timing and related retaliation persists.

As a result, manufacturers are hesitant to commit to large investments or expansion plans unless they can be certain they’ll see a long-term payoff. Whether manufacturers need to change their supply chain strategy, find alternative sourcing or re-source materials, they don’t feel confident implementing these initiatives without more evidence of stability in trade policy.

While the next round of tariffs may be out of manufacturers’ control, they can be proactive in preparing for changing trade policies by considering these steps to weather the storm:

Renegotiate rates with suppliers
Even if a manufacturer’s products aren’t direct tariff targets, they may include affected materials like steel and aluminum, resulting in higher cost of goods and materials. Now is the time to renegotiate terms with suppliers and try to lock them into long-term deals with favorable pricing. It may be easier said than done in many cases, particularly in cases where suppliers are using the assessment of new tariffs as an opportunity to raise prices. It’s critical manufacturers incorporate key protection clauses to avoid major price spikes that would be damaging to their business model when entering into an amended, extended or new supply contract.

Evaluate profit margins
With tariffs increasing the costs of goods and materials, it’s imperative for manufacturers to examine which costs they can absorb and which they’ll need to pass on to customers. This process involves understanding where a manufacturer might offset material cost increases with other efficiencies or cost rationalization, and the level of cost increase customers will tolerate. In customer contracts that have price escalation clauses or limitations, manufacturers may need to attempt to renegotiate clauses that prevent recovery of tariffs paid.

Consider free-trade zone opportunities
Too often, manufacturers overlook available opportunities provided by free-trade zones. The free-trade zone option allows companies to develop a product, then export it to a U.S. customs territory or foreign destination, potentially bypassing any tariffs on the product if it has been transformed.

Establish a dedicated trade and customs compliance group
Consider forming a trade compliance group with clear governance. Charge this group with developing strong “what-if” capabilities to understand the impact of various tariff and trade scenarios, including inventory and supply chain strategies, sourcing alternatives and modeling multiple data sources.

Take advantage of exclusion processes
When granted, exclusions apply retroactively to the date a tariff became effective. The Commerce Department reviews exclusion requests for Section 232 Steel and Aluminum tariffs, while the United States Trade Representative (USTR) provides a mechanism to request exclusions for Section 301 (China) tariffs. The Commerce Department has shown a willingness to provide exemptions in certain cases, particularly since March when the tariffs of 25 percent on steel and 10 percent on aluminum went into effect, making it all the more important for manufacturers to evaluate opportunities for exclusions.

Assess imported product classifications
Each product’s classification dictates whether or not it is included in the tariff order. Whether there is an accidental misclassification, an intentional misclassification by the overseas seller or a product that falls within a gray area, an audit of the classifications of imported goods will help manufacturers elude surprises and potential liabilities – and could even result in the avoidance of higher tariffs.

Import sooner versus later
Manufacturers with source material subject to the 10 percent tariff may want to procure more before the tariff leaps to 25 percent.

Seek out alternative sources of supply
Manufacturers should explore alternate supply sources to shield their business from the disruption caused by tariffs. They should be prepared to onboard new supply partners quickly – a process that might include partner profiles, legacy systems, custom coding and new systems to securely exchange order, invoicing, shipping and payment data.

Time will tell the extent to which new tariffs and trade policy will impact the manufacturing industry. Regardless of today’s uncertainty, manufacturers should take steps now to prepare and protect their business interests amid the shifting trade environment.

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Archives, Global Trade Daily, Special Reports

5 KEYS TO EFFECTIVE PLANNING FOR CAT EVENTS

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The National Oceanic and Atmospheric Administration (NOAA) recently issued its forecast for the 2019 Atlantic and Pacific Hurricane Seasons. Specifically, NOAA forecast 9-15 named storms, 4-8 hurricanes and 2-4 major (Category 3+) hurricanes between June and November for the Atlantic Basin. It also forecast 15-22 named storms, 8-13 hurricanes, including 4-8 major hurricanes, through November for the Eastern Pacific Basin.

Although NOAA indicated its forecasts are “near normal” for the Atlantic Basin and “above average” for the Pacific, even one storm making landfall in a populated area can have dire consequences for local residents and businesses, as well as their trading partners and customers. 

Business leaders and managers whose enterprises and key trading partners are located in areas vulnerable to catastrophes need to plan effectively and well in advance for any potential disaster. Here are five keys for effective disaster planning and management.

1. Develop and test an emergency response plan.

Create a team of key personnel and external resources needed to prepare for and respond to a disaster affecting your operations. Besides members from your risk management, executive, legal, accounting/finance, IT, HR, operations, and communications, the team should include your insurance broker, risk consultant, claims adjuster, and restoration contractors for emergency repairs of damaged facilities.

Have multiple contact information (including office, home and cellular phones; business and personal email) for each individual and create call trees to contact everyone on a timely basis.

Designate an internal leader, such as the risk manager or CFO, and alternates to coordinate  response and claims teams, and oversee the plan’s implementation.

Next, carefully assess the potential vulnerabilities of each facility, such as wind damage, flooding, and fire. Conduct a comprehensive evaluation of your organization’s facilities and locations situated in regions prone to hurricanes so you have a full understanding of business interruption and asset values at risk from these events.

A key lesson from past storms: Planning must address not only wind-related loss, but also storm surge, flooding, extended power outages, and interruption of land line, cell phone and internet access, as well as the potential for sustained site inaccessibility.

List all measures needed to prepare for such events in advance, as well as to respond at each stage as they unfold, including pending, immediately prior, during, following, preparation of the insurance claim, process management or repair and restoration through full recovery.

Develop a project flowchart or playbook so everyone involved understands the plan and their responsibilities. New planning “apps” on mobile devices can ensure all team members have ready access to all required details as storms approach and their actions are needed.

Rehearse the plan and test it using tabletop exercises. Be sure to update it regularly to account for any changes in personnel, operations, and activity.  

2. Know emergency procedures and resources.

Well in advance of any event, contact the local Emergency Management Office to gain an understanding of community evacuation plans. Have a citizen band radio system at each facility to track storms and obtain critical government notifications.

3. Engage employees.

Inform all employees of your hurricane and natural disaster plan and have supervisors explain elements that apply to them, including their individual responsibilities when storms occur in areas where they live and work. They should know facility shutdown procedures, including how, when and by whom they are to be implemented and communicated.

Prepare for events that occur when employees are at any facility; make sure they have access to adequate emergency supplies (such as 72 hours of nonperishable food, potable water, first aid kits, lighting and communications devices) and safe locations onsite if they need refuge from floodwaters or structural collapse.

4. Safeguard facilities and critical equipment.

Plan to protect or secure outside equipment and inventory. Safeguard windows against breakage with permanent storm shutters or cover them with marine plywood as storms approach. Divert water from holes in foundations, doorways and sills, and other openings. Inspect roofs, HVAC systems, elevators, and loading docks for potential exposures.

Be prepared to anchor or move yard structures and equipment (trailers, cranes, loose yard storage, high profile materials, storage racks, etc.) that may be vulnerable to high winds. If sites contain drums of hazardous chemicals, move them to sheltered areas.

If your inventory includes perishable goods, have back-up generators for refrigerators/freezers or arrange transport to another facility. If possible, move susceptible equipment to higher levels.

5. Create a detailed business continuity plan.

Building on the measures taken in the emergency response plan, work with your team to create a comprehensive business continuity plan. Set priorities by identifying critical operations where any downtime or outages will have the greatest impact on the company’s revenues and business, including potential loss of market share, customers and key employees.

Be prepared to move records, computer equipment, and other sensitive equipment/valuable items to other locations in the event of a pending disaster. Additional advance steps include:

-Create electronic back-ups of critical paper documentation.

-Prepare for disruptions in telecommunications, including email and internet access.

-Plan for electric power outages and utility service disruption. Fill diesel engine-driven emergency generators and fire pump fuel tanks. Maintain extra supplies of fuel.  

-Develop a system to advise customers and suppliers of a potential disruption in operations, as well as for keeping them informed of progress in restoring operations after an outage.

-Check key suppliers’ plans to address any disruptions in service or the supply chain.

All measures should be documented, communicated to individuals involved, and the entire plan should be reviewed and updated regularly.

Besides helping protect employees and properties, emergency response and business continuity plans are a key part of a company’s property and business interruption insurance application process. Often, evidence of comprehensive and robust preparation may have an impact on the availability and cost of related insurance protection.

With appropriate planning, businesses can help minimize the potential impacts of hurricanes and other disasters on their operations. As the 2019 hurricane season progresses, these measures can reduce the chances of storm-related employee injuries and property damage, as well as accelerate recovery and reduce potential losses.

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Peter Jagger, a managing director, Aon Global Risk Consulting, works with the firm’s clients on their pre-loss and post-loss planning and risk mitigation. During an insurance industry career that has spanned more than 25 years, he has been involved in claims program design and development, and the preparation of property claims for a variety of industries. Previously, at Aon, he served as director of Property/Casualty Claims/Specialty Services responsible for the oversight and management of the property and casualty claim staff. Over the years, he advised clients around the world that have sustained losses due from such large-scale disaster events as Hurricane Georges, Super Typhoon Pongsona, Hurricane Katrina, Hurricane Wilma, Hurricane Ike, Thailand flood, and Super Storm Sandy. 

Archives, Global Logistics, Global Trade Daily

Deconstruction of the Value Chain

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Why Large Shipping Lines Should Think About Asset-Sharing

In the past, companies have tried to optimize and unearth efficiency gains through value chain integration. Reason was that it is easier to communicate and optimize within a company than with external partners. Examples from container logistics include Maersk Line acquiring Damco as part of the P&O Nedlloyd acquisition and Amazon aiming to consolidate the entire value chain from factory to last mile delivery. 

In the literature, the explanations focus on lower transaction costs when communicating within an organization compared to the outside and the risk of “hold-ups” is better manageable if you can observe the entire value chain compared to just a small fraction. 

Extrapolation: You can argue that these factors and risks are the only reason why we have companies at all, those are basically just a way for humans to work together and communicate efficiently. In a sense, a company is just a collection of specialists who work together on a “platform” called a company. 

Technology Reduces Those Underlying Costs and Risks

Today, technology and digital platforms reduce transaction costs and remove risks. This makes the traditional “company borders” obsolete. We see that in the “gig” economy where specialists (from highly paid professionals such as lawyers and consultant to poorly paid uneducated “hands”) chose not to get a job in a company but instead offer their workforce on platforms – think of Uber, Fiverr and even Deliveroo. Interestingly, this does not quite fit into the B2B vs B2C vs C2C logic of the past but is rather P2B (“Platform-to-B”) or P2C: As a company or as a consumer I only need to join a platform to get access to a wide range of services without further need to search, compare or contract. 

“Traditional” B2B Markets Follow the Trend

We see the same happening in B2B! M&A activity will not remain the only logical way to increase efficiency along the value chain and to achieve economies of scale. Instead, platforms and digital technologies allow companies (no matter how small or specialised) to work together across company borders. On successful platforms, this is powered not only by efficient online processes, but supported by platform activities that increase trust such as peer reviews, performance information or payment handling. 

An industry perspective: “a simulated large, consolidated company” which operates equipment in an efficient, market-driven pool. Other examples that come to mind are platforms focused on the optimization of hinterland intermodal moves—improving communication between container carriers, freight forwarders, and trucker. 

Future: We Expect This Along the Entire Transportation Value Chain

Thinking about the future of shipping industry, we will see further deconstruction happening. Multiple “neutral” platforms will link together specialized actors along the value chain. Actors on the value chain will be much more specialized than today and instead of  seeing mega carriers covering the transport chain end-to-end, we’ll have actors such as equipment owner, vessel owner, vessel operator, slot marketer, agents in POL and POD, equipment tracking technology, ports, terminal, truckers, depots… 

An example: from an economic viewpoint (and when removing transaction costs / communication barriers and “holdup risks”) it makes only very little sense have “vessel operation” and “equipment ownership” done by the same party. In the case of equipment: Managing a pool allows you to balance out company-specific imbalances and reduce empty container moves! Container Leasing companies are a prime example where this already happens. 

Of course, this does not need to be fragmented down to the individual micro-service at all stages. Thinking back to our example before, that would mean that we don’t even have companies here anymore but just individual freelancers. Such companies can then also contribute 2, 3, 4 steps but we think the underlying logic is important: Deconsolidation makes sense! 

Additionally, there will be some clients who prefer buying from a consolidated entity instead of plugging-and-playing services on a platform. Consider a large shipper who wants to have a reliable long-term contract with stable rates and a single-point of contact -> this role will still exist and also create value (as they cater to a specific demand). Here you’ll also find strong “consumer” / “client” facing brand names such as Maersk. However, the way this “consolidator” then provides the service will change completely from an inhouse solution to an “on demand platform solution”. 

What we see in shipping is that fully integrated liners act like a “one-stop-shop” and try to offer everything even though their core business is ocean freight. Why shouldn’t forwarders or shippers bring their own containers and only book the vessel slot? When shippers bring their own boxes, containers are so-called shippers owned containers, SOC container in short. Such containers increase flexibility and create a win-win for shippers and carriers: Forwarders save demurrage charges, while carriers avoid time-consuming planning and can focus on what they’re good at: moving goods between continents and the sale of vessel slots! 

More and more shipping companies increase their SOC activities because online platforms provide them with access to global capacity and streamline processes of booking containers separately to the vessel slot. 

Container xChange is an example of how companies can work together on a neutral platform and share capabilities/ assets. It is not necessary anymore to take over your competitor to leverage a shared equipment pool of containers. More than 300 companies use this chance to access to world market and to have eyes and ears across the entire globe. It is also possible to add further services from 3rd parties to a transaction such as container insurance or surveying to further driving down transaction costs. Apart from efficient processes, transaction costs are further reduced through secure payment handling, partner reviews, performance, and issue resolution by the always on support. 

No Need to Run the Race for Integration 

You can stop the “race to be the largest and most integrated actor”, in the future of shipping you’ll need to be super specialized and able to play multiple platforms instead. In a corporate finance viewpoint there will be no more “conglomerate cover-up”, every activity needs to be performed at par with or better than the best. Because markets will be so efficient, that customers are not willing to pay for sub-par parts of products anymore. 

How Do You Prepare for The Future of Shipping?

What does this all mean for you? Firms should ensure they are preparing for an eco-system future—or what “eco-systematisation” will mean for them. Specifically, they need to dedicate resources to understanding which services are available, as the landscape is evolving quickly. More and more platforms are evolving that might evolve into an eco- system services—just think of Alibaba and WeChat. They need to decide what they are really distinctive at and exit or source marginal activities. While this has always been a good idea and strategic exercise, it is becoming more important than ever (examples could be COSCOs divestment of its shipbuilding/shipyard arm).

And finally, they need to create plug and play architectures, not just in a technical sense, but also in how they contract (e.g., shorter duration). And in some cases, they may need to organize themselves into a set of discrete internal services to allow inter-operability with the external market. Zapier is a really good example for pushing plug and play architectures, it basically is an online service that “connects” distinct services to provide additional user value. Easyjet is a good example for an “unbundling” of services into micro-services: You can book everything, but you don’t have to—that aligns very well with the market and is profitable in itself! 

tariffs
Archives, Global Trade Daily, International Trade

TARIFFS: NAVIGATING THE LATEST TARIFFS ON CHINESE GOODS

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Despite recent plans to revive moribund negotiations, the prospects for a near term solution to the U.S.- China trade conflict are very much in doubt. The United States has expanded the tariffs already in place to cover nearly all imports from China, and in response China has hit back with tariffs of its own where it may hurt U.S. exports the most, mainly in swing-state industries such as farming and automobile production. 

The stock markets and economic growth in each country have increasingly shown signs of strain from the trade war and a cease-fire could provide a welcome respite. Although the Trump administration has agreed to renew trade negotiations in early October, it would be irresponsible to expect these talks to arrive at a meaningful resolution based on how entrenched each side has become. Leaving fate in the hands of the negotiators is risky business since prior negotiations have stalled or led to further escalations. So what can companies do to protect their interests and to mitigate the impact of the tariffs? 

Many companies find they cannot quickly change their supply chains or stop doing business with China. This is because U.S. importers and producers are dependent on Chinese parts makers. Some of these parts may not be available in the United States or third countries. Moving production to the United States could itself take years. But in the short term, companies can take certain steps to mitigate the impact of the tariffs. 

First, companies should consider seeking official exclusions from the tariffs with the Office of the United States Trade Representative (USTR). Since importers are responsible for paying the tariff amounts, it is crucial that they are well informed about the exclusion process and consider filing requests as soon as possible since deadlines are looming. 

Tariffs on imports from China have been divided into four separate Lists; goods on Lists 1 and 2 encompass roughly $50 billion of imports from China and their exclusion process has closed. Lists 3 and 4 cover the remaining $500 billion of imports and are entering their final phase. 

List 3 goods have been subject to a 25 percent tariff since May 2019, but the rate is set to increase to 30 percent on October 15, 2019 (originally the increase was set for October 1, but President Trump has extended it by two weeks as a gesture of “good will” towards China). The deadline for requesting List 3 exclusions is September 30. 

List 4 goods, or all goods not presently covered by Lists 1-3, are subject to a 15 percent tariff effective September 1 (List 4A), or December 15 (List 4B). The exclusion process for List 4 has yet to be announced, but is likely to resemble that which applied to the previous Lists. 

What makes an exclusion request successful? This has been like reading tea leaves, although certain patterns have emerged. Namely, successful applications are extremely detailed and provide adequate information for USTR staff on which to base their opinion. Products not manufactured in the United States, products for which the manufacturer has a U.S. or foreign patent, or products which are difficult to manufacture in the United States due to high costs or environmental concerns are examples of those for which the USTR has approved exclusions. 

Other factors which have shown to affect exclusions include: potential U.S. jobs lost; financial impact on an industry sector; store of facility closings; customer demographics; ability of the customers to accept some of the tariff costs; geographic location; whether the products are included in the “Made in China 2025” policies; capacity of U.S. manufacturers to produce the quantities and quality required for the product; impact on swing states in the next presidential election; or effective public relations. 

However, an exclusion request can take time to submit, and often much longer for the USTR to reach a determination. Exclusions have also been rare. 

For those looking for another option, a change in the product’s customs classification may provide a viable option. U.S. Customs and Border Protection can only levy tariffs on the condition of goods as imported. When goods are imported, they are assigned a specific classification under the Harmonized Tariff Schedule (HTS) subheading. Each subheading for Chinese imports is assigned a specific tariff rate depending on where it falls on Lists 1-4. U.S. companies can work with their Chinese suppliers to determine whether certain products could be shipped in separate parts, finished or unfinished, or in embellished forms so that they legally fall under an HTS subheading assigned to a lower tariff rate. 

For some U.S. companies, passing on of the tariff cost to their consumers may be preferable. But for many, this is not a competitive solution. Some customers simply will not tolerate the increased pricing and demand for the products would correspondingly decline. 

While it is not always a quick solution, U.S. companies concerned about the duration of the current trade war may also consider diversifying their sourcing away from China altogether by shifting some or all manufacturing to the United States, or to a third country. A product with a non-China country of origin would not be subject to the current tariffs. However, country of origin rules are not harmonized internationally and different rules may apply under free trade agreements, or the substantial transformation test. Therefore, it is important for importers to understand the applicable rules and carefully verify the country of origin when considering this option. 

Finally, another approach would be to lower the dutiable value of the product upon importation to the United States through the so-called “first sale” valuation. In this scenario, U.S. importers pay duty on the price that a trading company pays the manufacturer instead of the higher price the importer pays the trading company. While the tariffs would still apply in this case, their impact would be less severe because the dutiable value would be significantly lower. 

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Mark Ludwikowski is the leader and Courtney Taylor is an Associate of the International Trade practice of Clark Hill, PLC. They are resident in the firm’s Washington D.C. office and can be reached at 202-772-0909; mludwikowski@ClarkHill.com and cgtaylor@ClarkHill.com

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Archives, Global Trade Daily, News

Global Hardboard Market 2019 – Manufacturing Suffers Setback Due to Demand Weakness

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

The global hardboard market revenue amounted to $5.2B in 2018, picking up by 5.7% 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, hardboard consumption, however, continues to indicate a measured shrinkage. The most prominent rate of growth was recorded in 2011 with an increase of 17% year-to-year. Global hardboard consumption peaked at $8.5B in 2013; however, from 2014 to 2018, consumption failed to regain its momentum.

Consumption By Country

China (3.3M cubic meters) constituted the country with the largest volume of hardboard consumption, comprising approx. 35% of total consumption. Moreover, hardboard consumption in China exceeded the figures recorded by the world’s second-largest consumer, Germany (1.1M cubic meters), threefold. The third position in this ranking was occupied by Russia (474K cubic meters), with a 5% share.

From 2007 to 2018, the average annual growth rate of volume in China amounted to +8.1%. In the other countries, the average annual rates were as follows: Germany (+3.5% per year) and Russia (-2.8% per year).

In value terms, China ($1.8B) led the market, alone. The second position in the ranking was occupied by Germany ($748M). It was followed by the U.S..

The countries with the highest levels of hardboard per capita consumption in 2018 were Belarus (22 cubic meters per 1000 persons), Belgium (17 cubic meters per 1000 persons) and Germany (13 cubic meters per 1000 persons).

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

Market Forecast 2019-2025

Driven by rising demand for hardboard worldwide, the market is expected to start an upward consumption trend over the next seven years. The performance of the market is forecast to increase slightly, with an anticipated CAGR of +5.5% for the seven-year period from 2018 to 2025, which is projected to bring the market volume to 14M cubic meters by the end of 2025.

Production 2007-2018

In 2018, approx. 9.7M cubic meters of hardboard were produced worldwide; reducing by -3% against the previous year. Over the period under review, hardboard production continues to indicate a measured setback. The most prominent rate of growth was recorded in 2011 when production volume increased by 15% year-to-year. Over the period under review, global hardboard production attained its peak figure volume at 15M cubic meters in 2013; however, from 2014 to 2018, production failed to regain its momentum.

In value terms, hardboard production totaled $5.3B in 2018 estimated in export prices. Overall, hardboard production continues to indicate a significant reduction. The pace of growth appeared the most rapid in 2013 with an increase of 20% y-o-y. In that year, global hardboard production attained its peak level of $8.7B. From 2014 to 2018, global hardboard production growth failed to regain its momentum.

Production By Country

The countries with the highest volumes of hardboard production in 2018 were China (3.5M cubic meters), Germany (2.3M cubic meters) and Russia (418K cubic meters), with a combined 64% share of global production. Ukraine, Poland, Belarus, Brazil, the U.S. and Malaysia lagged somewhat behind, together comprising a further 19%.

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

Exports 2007-2018

Global exports stood at 4.3M cubic meters in 2018, reducing by -9.4% against the previous year. Over the period under review, hardboard exports continue to indicate a slight descent. The most prominent rate of growth was recorded in 2017 with an increase of 8.5% y-o-y. Global exports peaked at 5M cubic meters in 2007; however, from 2008 to 2018, exports failed to regain their momentum.

In value terms, hardboard exports amounted to $2.5B in 2018. Overall, hardboard exports continue to indicate a moderate slump. The growth pace was the most rapid in 2013 with an increase of 10% y-o-y. Over the period under review, global hardboard exports reached their maximum at $3.2B in 2007; however, from 2008 to 2018, exports remained at a lower figure.

Exports by Country

In 2018, Germany (1.5M cubic meters) was the main exporter of hardboard, generating 36% of total exports. It was distantly followed by Poland (499K cubic meters), France (249K cubic meters), Belgium (232K cubic meters) and China (220K cubic meters), together generating a 28% share of total exports. Belarus (157K cubic meters), Brazil (122K cubic meters), Canada (113K cubic meters), Russia (112K cubic meters), Austria (101K cubic meters), Turkey (97K cubic meters) and Thailand (83K cubic meters) occupied a relatively small share of total exports.

Germany experienced a relatively flat trend pattern of hardboard exports. At the same time, Turkey (+17.3%), Belarus (+17.1%), Thailand (+9.9%) and Poland (+4.1%) displayed positive paces of growth. Moreover, Turkey emerged as the fastest growing exporter in the world, with a CAGR of +17.3% from 2007-2018. Brazil, Austria and Belgium experienced a relatively flat trend pattern. By contrast, China (-6.4%), France (-7.0%), Russia (-8.8%) and Canada (-10.4%) illustrated a downward trend over the same period. Poland (+4.2 p.p.), Belarus (+3 p.p.) and Turkey (+1.8 p.p.) significantly strengthened its position in terms of the global exports, while Germany, Russia, China, Canada and France saw its share reduced by -1.9%, -4.6%, -5.5%, -6.1% and -7.1% from 2007 to 2018, respectively. The shares of the other countries remained relatively stable throughout the analyzed period.

In value terms, Germany ($1.1B) remains the largest hardboard supplier worldwide, comprising 44% of global exports. The second position in the ranking was occupied by Poland ($257M), with a 10% share of global exports. It was followed by France, with a 5.9% share.

From 2007 to 2018, the average annual growth rate of value in Germany totaled -1.1%. In the other countries, the average annual rates were as follows: Poland (+2.7% per year) and France (-6.5% per year).

Export Prices by Country

The average hardboard export price stood at $572 per cubic meter in 2018, rising by 10% against the previous year. Over the period under review, the hardboard export price, however, continues to indicate a mild deduction. The most prominent rate of growth was recorded in 2013 when the average export price increased by 29% y-o-y. Over the period under review, the average export prices for hardboard reached their maximum at $648 per cubic meter in 2007; however, from 2008 to 2018, export prices stood at a somewhat lower figure.

Prices varied noticeably by the country of origin; the country with the highest price was Germany ($712 per cubic meter), while Russia ($265 per cubic meter) was amongst the lowest.

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

Imports 2007-2018

Global imports amounted to 4.1M cubic meters in 2018, falling by -3.1% against the previous year. In general, hardboard imports continue to indicate a measured contraction. The pace of growth was the most pronounced in 2017 when Imports increased by 15% against the previous year. Over the period under review, global hardboard imports attained their maximum at 5.2M cubic meters in 2007; however, from 2008 to 2018, imports stood at a somewhat lower figure.

In value terms, hardboard imports amounted to $2.1B in 2018. Overall, hardboard imports continue to indicate a perceptible curtailment. The most prominent rate of growth was recorded in 2011 with an increase of 9% against the previous year. Over the period under review, global hardboard imports reached their peak figure at $3.1B in 2007; however, from 2008 to 2018, imports failed to regain their momentum.

Imports by Country

The imports of the twelve major importers of hardboard, namely Belgium, France, Germany, the U.S., Poland, Russia, Romania, the UK, Canada, Italy, Australia and Lithuania, represented more than half of total import.

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

In value terms, France ($164M), Belgium ($141M) and the U.S. ($139M) were the countries with the highest levels of imports in 2018, with a combined 21% share of global imports. These countries were followed by Germany, Poland, Romania, the UK, Russia, Canada, Italy, Australia and Lithuania, which together accounted for a further 32%.

Among the main importing countries, Lithuania recorded the highest rates of growth with regard to imports, over the last eleven years, while the other global leaders experienced mixed trends in the imports figures.

Import Prices by Country

In 2018, the average hardboard import price amounted to $509 per cubic meter, picking up by 6.5% against the previous year. Over the period under review, the hardboard import price, however, continues to indicate a mild descent. The most prominent rate of growth was recorded in 2018 when the average import price increased by 6.5% against the previous year. Global import price peaked at $626 per cubic meter in 2008; however, from 2009 to 2018, import prices failed to regain their momentum.

There were significant differences in the average prices amongst the major importing countries. In 2018, the country with the highest price was Canada ($647 per cubic meter), while Belgium ($333 per cubic meter) was amongst the lowest.

From 2007 to 2018, the most notable rate of growth in terms of prices was attained by the UK, while the other global leaders experienced a decline in the import price figures.

Source: IndexBox AI Platform

milk
Archives, Global Trade Daily, International Trade

Global Whole Fresh Milk Market 2019 – Output is Driven by Increasing Demand in India, Turkey, the EU, and the U.S.

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

The global whole fresh milk market is estimated at $798.4B in 2018, an increase of 1.7% from 2017. 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). The market value increased at an average annual rate of +2.5% from 2007 to 2018; the trend pattern remained consistent, with somewhat noticeable fluctuations being observed throughout the analyzed period. The most prominent rate of growth was recorded in 2010 with an increase of 8.8% year-to-year. Over the period under review, the global whole fresh milk market attained its maximum level in 2018 and is expected to retain its growth in the near future.

Consumption By Country

The countries with the highest volumes of whole fresh milk consumption in 2018 were India (185M tonnes), the U.S. (99M tonnes) and Pakistan (46M tonnes), with a combined 39% share of global consumption. These countries were followed by Brazil, China, Germany, Russia, France, New Zealand, Turkey, the Netherlands and the UK, which together accounted for a further 28%.

From 2007 to 2018, the most notable rate of growth in terms of whole fresh milk consumption, amongst the main consuming countries, was attained by Turkey, while the other global leaders experienced more modest paces of growth.

In value terms, the largest whole fresh milk markets worldwide were India ($140.3B), the U.S. ($87.4B) and Brazil ($67.7B), together accounting for 37% of the global market. These countries were followed by Pakistan, New Zealand, China, Russia, Germany, Turkey, France, the Netherlands and the UK, which together accounted for a further 27%.

In 2018, the highest levels of whole fresh milk per capita consumption was registered in New Zealand (4,626 kg per person), followed by the Netherlands (877 kg per person), Germany (417 kg per person) and France (384 kg per person), while the world average per capita consumption of whole fresh milk was estimated at 110 kg per person.

From 2007 to 2018, the average annual rate of growth in terms of the whole fresh milk per capita consumption in New Zealand totaled +2.1%. The remaining consuming countries recorded the following average annual rates of per capita consumption growth: the Netherlands (+2.4% per year) and Germany (+1.8% per year).

Market Forecast 2019-2025

Driven by increasing demand for whole fresh milk worldwide, the market is expected to continue an upward consumption trend over the next seven years. Market performance is forecast to retain its current trend pattern, expanding with an anticipated CAGR of +1.6% for the seven-year period from 2018 to 2025, which is projected to bring the market volume to 946M tonnes by the end of 2025.

Production 2007-2018

In 2018, approx. 846M tonnes of whole fresh milk were produced worldwide; increasing by 2.2% against the previous year. The total output volume increased at an average annual rate of +1.9% from 2007 to 2018; the trend pattern remained consistent, with only minor fluctuations being observed throughout the analyzed period. The growth pace was the most rapid in 2014 with an increase of 3.4% y-o-y. The global whole fresh milk production peaked in 2018 and is expected to retain its growth in the near future. The general positive trend in terms of whole fresh milk output was largely conditioned by a modest increase of the number of producing animals and a relatively flat trend pattern in yield figures.

In value terms, whole fresh milk production amounted to $780.5B in 2018 estimated in export prices. The total output value increased at an average annual rate of +2.5% from 2007 to 2018; the trend pattern remained relatively stable, with somewhat noticeable fluctuations being recorded over the period under review.

Production By Country

The countries with the highest volumes of whole fresh milk production in 2018 were India (185M tonnes), the U.S. (99M tonnes) and Pakistan (46M tonnes), with a combined 39% share of global production. Brazil, China, Germany, Russia, France, New Zealand, Turkey, the UK and the Netherlands lagged somewhat behind, together comprising a further 27%.

From 2007 to 2018, the most notable rate of growth in terms of whole fresh milk production, amongst the main producing countries, was attained by Turkey, while the other global leaders experienced more modest paces of growth.

Producing Animals 2007-2018

In 2018, the global number of animals for whole fresh milk output amounted to 821M heads, rising by 1.7% against the previous year. This number increased at an average annual rate of +1.4% over the period from 2007 to 2018; the trend pattern remained consistent, with somewhat noticeable fluctuations throughout the analyzed period. The pace of growth was the most pronounced in 2009 when the number of producing animals increased by 3.3% y-o-y. The global number of animals for whole fresh milk production peaked in 2018 and is likely to continue its growth in the near future.

Yield 2007-2018

In 2018, the global average yield for whole fresh milk output stood at 1 tonne per head, remaining stable against the previous year. In general, the whole fresh milk yield continues to indicate a relatively flat trend pattern. The most prominent rate of growth was recorded in 2014 with an increase of 2.7% y-o-y. The global whole fresh milk yield peaked in 2018 and is expected to retain its growth in the immediate term.

Exports 2007-2018

Global exports amounted to 10M tonnes in 2018, reducing by -11.5% against the previous year. The total export volume increased at an average annual rate of +2.4% over the period from 2007 to 2018; however, the trend pattern indicated some noticeable fluctuations being recorded in certain years. The growth pace was the most rapid in 2008 when exports increased by 13% against the previous year. Over the period under review, global whole fresh milk exports reached their maximum at 11M tonnes in 2017, and then declined slightly in the following year.

In value terms, whole fresh milk exports stood at $6.9B (IndexBox estimates) in 2018. The total export value increased at an average annual rate of +2.0% from 2007 to 2018; however, the trend pattern indicated some noticeable fluctuations being recorded throughout the analyzed period. The most prominent rate of growth was recorded in 2011 when exports increased by 26% y-o-y. Over the period under review, global whole fresh milk exports attained their peak figure at $8.6B in 2014; however, from 2015 to 2018, exports failed to regain their momentum.

Exports by Country

In 2018, Germany (1.4M tonnes), followed by the Czech Republic (855K tonnes), the UK (822K tonnes), Belgium (746K tonnes), the Netherlands (741K tonnes), France (698K tonnes), Poland (606K tonnes) and Austria (582K tonnes) were the major exporters of whole fresh milk, together achieving 65% of total exports. The following exporters – Latvia (340K tonnes), Hungary (316K tonnes), Slovenia (284K tonnes) and Luxembourg (253K tonnes) – each recorded a 12% 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 Poland, while the other global leaders experienced more modest paces of growth.

In value terms, the largest whole fresh milk markets worldwide were Germany ($976M), the Netherlands ($715M) and Belgium ($664M), together comprising 34% of global exports. These countries were followed by France, Poland, the UK, the Czech Republic, Austria, Hungary, Latvia, Luxembourg and Slovenia, which together accounted for a further 37%.

Among the main exporting countries, Poland recorded the highest growth rate of exports, over the last eleven-year period, while the other global leaders experienced more modest paces of growth.

Export Prices by Country

The average whole fresh milk export price stood at $696 per tonne in 2018, approximately reflecting the previous year. In general, the whole fresh milk export price, however, continues to indicate a relatively flat trend pattern. The growth pace was the most rapid in 2013 an increase of 14% year-to-year. In that year, the average export prices for whole fresh milk reached their peak level of $811 per tonne. From 2014 to 2018, the growth in terms of the average export prices for whole fresh milk remained at a somewhat lower figure.

Prices varied noticeably by the country of origin; the country with the highest price was the Netherlands ($965 per tonne), while Latvia ($377 per tonne) was amongst the lowest.

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

Imports 2007-2018

In 2018, approx. 11M tonnes of whole fresh milk were imported worldwide; falling by -5.3% against the previous year. The total import volume increased at an average annual rate of +3.5% from 2007 to 2018; however, the trend pattern indicated some noticeable fluctuations being recorded over the period under review. The most prominent rate of growth was recorded in 2008 with an increase of 14% year-to-year. Over the period under review, global whole fresh milk imports attained their peak figure at 12M tonnes in 2017, and then declined slightly in the following year.

In value terms, whole fresh milk imports stood at $8.2B (IndexBox estimates) in 2018. The total import value increased at an average annual rate of +3.5% from 2007 to 2018; however, the trend pattern indicated some noticeable fluctuations being recorded over the period under review. The most prominent rate of growth was recorded in 2017 with an increase of 27% year-to-year. The global imports peaked at $8.6B in 2014; however, from 2015 to 2018, imports stood at a somewhat lower figure.

Imports by Country

In 2018, Germany (2.5M tonnes), distantly followed by Italy (1.2M tonnes), Belgium (914K tonnes), the Netherlands (803K tonnes), Ireland (764K tonnes) and China (580K tonnes) were the largest importers of whole fresh milk, together making up 61% of total imports. Lithuania (480K tonnes), France (363K tonnes), Russia (238K tonnes), Croatia (206K tonnes), Poland (187K tonnes) and Romania (184K tonnes) occupied a minor share of total imports.

From 2007 to 2018, average annual rates of growth with regard to whole fresh milk imports into Germany stood at +5.7%. At the same time, China (+57.8%), Croatia (+21.9%), Poland (+13.7%), Romania (+13.1%), Lithuania (+11.4%), Ireland (+10.6%), Russia (+6.5%), the Netherlands (+6.1%) and Belgium (+1.9%) displayed positive paces of growth. Moreover, China emerged as the fastest-growing importer in the world, with a CAGR of +57.8% from 2007-2018.

By contrast, France (-1.5%) and Italy (-3.1%) illustrated a downward trend over the same period. From 2007 to 2018, the share of Germany, China, Ireland, the Netherlands, Lithuania, Croatia and Belgium increased by +10%, +5.2%, +4.6%, +3.5%, +3%, +1.6% and +1.5% percentage points, while Italy (-4.4 p.p.) saw their share reduced. The shares of the other countries remained relatively stable throughout the analyzed period.

In value terms, Germany ($1.5B), China ($747M) and Italy ($733M) appeared to be the countries with the highest levels of imports in 2018, together comprising 36% of global imports.

In terms of the main importing countries, China (+54.0% per year) recorded the highest growth rate of imports, over the last eleven years, while the other global leaders experienced more modest paces of growth.

Import Prices by Country

In 2018, the average whole fresh milk import price amounted to $735 per tonne, picking up by 4.7% against the previous year. Over the period under review, the whole fresh milk import price, however, continues to indicate a relatively flat trend pattern. The pace of growth appeared the most rapid in 2017 when the average import price increased by 16% year-to-year. The global import price peaked at $802 per tonne in 2013; however, from 2014 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 France ($1,584 per tonne), while Lithuania ($383 per tonne) was amongst the lowest.

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

Source: IndexBox AI Platform