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The American Hardwood Veneer and Plywood Market: Vietnam Replaces China as Top Foreign Supplier

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The American Hardwood Veneer and Plywood Market: Vietnam Replaces China as Top Foreign Supplier

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IndexBox has just published a new report: ‘U.S. Hardwood veneer and plywood Market. Analysis And Forecast to 2025’. Here is a summary of the report’s key findings.

The American Hardwood Veneer and Plywood Market is to Languish on the Backdrop of the Pandemic

The hardwood veneer and plywood market in the U.S. stood at $4.9B in 2019 (IndexBox estimates), which was  -9.1% less than the year before. This figure reflects the total revenue of producers and importers (excluding logistics costs, taxes, and tariffs, which will be included in the final consumer price). Over the last five years, it increased gradually, driven by rising construction.

In physical terms, the market volume reached approx. 6.9M cubic meters, declining by -3.3%. The decrease in market volume was caused, on the one hand, by the slowdown in the U.S. economy in 2019, and, on the other hand, by a sharp drop in the volume of imports from China due to the introduction of anti-dumping duties, which could not be immediately replenished by domestic producers and suppliers from other countries.

Plywood is one of the basic materials widely used in construction, and, to a lesser extent, in industry. Therefore, the key factor determining the development of the plywood market is the dynamics of construction, which, in a broader context, reflects the overall GDP growth.

According to the World Bank outlook from January 2020, the U.S. economy was expected to slow down to +1.7% per year in the medium term, hampered by increasing global uncertainty, trade war, and slower global growth. The number of building permits increased steadily, with single-family premises posting the most prominent growth. Those factors were driving the market over the period under review and were assumed to remain in the medium term.

In early 2020, however, the global economy entered a period of the crisis caused by the COVID-19 epidemic, due to which most countries in the world put on halt production and transport activity. The result will be a drop in GDP relative to previous years and an unprecedented decline in oil prices.

The U.S. is struggling with a drastic short-term recession, with the expected contraction of GDP of approx. -6.1% in 2020, as the hit of the pandemic was harder than expected, and unemployment soared due to the shutdown and social isolation. The construction sector has proven extremely vulnerable to the pandemic as due to quarantine measures, construction projects were paused, and the drop in incomes of the population makes mortgage loans less affordable.

In the medium term, should the pandemic outbreak end in the second half of 2020, the economy is to start recovering in 2021 and then return to the market trend of the gradual growth, driven by the fundamentals existed before 2020 and boosted by support measures imposed by the government.

Taking into account the above, it is expected that in 2020, the consumption of plywood will drop by approx. 6%. In the medium term, as the economy recovers from the effects of the pandemic, the market is expected to grow gradually, with an anticipated CAGR of +0.2% for the period from 2019 to 2030, which is projected to bring the market volume to 7B cubic meters by the end of 2030.

The U.S. Hardwood Veneer and Plywood Market Remains Dependent on Imports

In 2019, the production of hardwood veneer and plywood decreased by -2.3% to 4.5M cubic meters, falling for the second year in a row after five years of growth. The total output volume increased at an average annual rate of +4.7% over the period from 2013 to 2019; however, the trend pattern indicated some noticeable fluctuations being recorded in certain years.

Over the period under review, the share of imports in terms of total hardwood veneer and plywood consumption in the U.S. decreased from 52% in 2007 to 44% in 2019 (based on physical terms). It means that the U.S. hardwood veneer and plywood market is still largely supplied by foreign manufacturers. The market position of domestic producers may improve further as the anti-dumping tariffs were imposed against plywood from China. This, however, is disputed by American furniture producers who relied on the imports of cheap raw materials. Anyway, some other countries like Viet Nam and Cambodia, and, to a lesser extent, Brazil, Spain, Canada, and Russia, benefit from the counter-China trade measures, increasing their supplies to the U.S. market to fill the market gap.

Viet Nam Emerged as the Largest Hardwood Veneer and Plywood Supplier to the U.S. After the Chinese Products Were Kicked Out

The volume of hardwood veneer and plywood imports in the U.S. totaled 2.8M cubic meters (IndexBox estimates) in 2019, decreasing significantly for the second consecutive year. As mentioned above, the decrease is caused by a deep slump in supplies from China which has not yet been compensated by other supplying countries. In value terms, it amounted to $1.7B in 2019.

In terms of supplying countries, Viet Nam (555K cubic meters), Indonesia (441K cubic meters), Russia (432K cubic meters), and Canada (411K cubic meters) were the main suppliers of hardwood veneer and plywood imports to the U.S., together accounting for 62% of total imports. Imports from Viet Nam soared over 2018-2019, filling a gap that appeared on the market after the Chinese plywood been pushed off. Imports from Brazil, Cambodia, and Spain also increased due to the same reason.

In value terms, the largest hardwood veneer and plywood suppliers to the U.S. were Viet Nam ($362M), China ($340M), and Canada ($302M), with a combined 45% share of total imports. These countries were followed by Indonesia, Russia, Cambodia, Malaysia, Spain, Brazil, Ecuador, Italy, and Uruguay, which together accounted for a further 43%.

The average hardwood veneer and plywood import price stood at $742 per cubic meter in 2019, with a decrease of -11.6% against the previous year. Over the period from 2013 to 2019, it increased at an average annual rate of +2.0%. The pace of growth appeared the most rapid in 2018 when the average import price increased by 19% year-to-year. As a result, import price reached the peak level of $839 per cubic meter and then declined in the following year.

Prices varied noticeably by the country of origin; the country with the highest price was Cambodia ($1,310 per cubic meter), while the price for Uruguay ($285 per cubic meter) was amongst the lowest.

From 2013 to 2019, the most notable rate of growth in terms of prices was attained by China, while the prices for the other major suppliers experienced more modest paces of growth.

Companies Mentioned in the Report

Columbia Forest Products, Smith Family Companies, Veneer Technologies, States Industries, Decorative Panels International, Mt. Baker Products, Rutland Plywood Corp., The Freeman Corporation, Marion Plywood Corporation, David R. Webb Company, Nmsa, International Timber and Veneer, Miller Veneers, Amos-Hill Associates, Swaner Hardwood Co., Manthei, Murphy Company, Ferche Millwork, Standard Plywoods Incorporated, Swanson Group Mfg., Coldwater Veneer, Birchwood Lumber & Veneer Co., Plycraft Industries, Bessemer Plywood Corp., Davis Wood Products, Timber Products Michigan Limited Partnership, Danzer Services, Northern Michigan Veneers, Columbia Plywood Corporation, Plum Creek Northwest Plywood, Coastal Plywood Company, Ivc USA Inc.

Source: IndexBox AI Platform

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COVID-19 PANDEMIC FORCES INDUSTRIES TO RE-THINK GLOBAL SUPPLY CHAINS

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As COVID-19 continues to dominate news headlines, American cities and international businesses are showing their true colors. From innovation in recovery to redrawing the predictions model businesses have adhered to for years, the health and economic crisis has done much more than disrupt the supply chain and logistics sectors. Despite the challenges, the process of recovery has been maximized by thinking outside the box and utilizing resources available to extend a helping hand. Dozens upon dozens of alcohol distilleries across the nation have switched production to meet the demand for hand sanitizer—to the point that the Distilled Spirits Council of the United States created its COVID-19 Hand Sanitizer Connection Portal as a dedicated resource for American distillers looking to join the efforts. General Motors announced its participation in joining forces to combat COVID-19 in April by kickstarting the production of face masks at the auto giant’s Warren, Michigan, and China facilities, thanks to a joint venture through SAIC-GM-Wuling.

If this pandemic has taught us anything, it is the importance of adaptability and what the true definition of agility looks like. Although the above companies proved prepared and agile enough to weather the storm, other companies and the American economy were not.

“Though the concept of supply chain readiness is not new, that does not mean it always has been practiced correctly,” explains Ron Leibman, head of McCarter & English’s Transportation, Logistics & Supply Chain Management practice. “Companies must begin now, if they are not doing so already, to test their business continuity plans, with a goal of identifying and correcting weaknesses in the supply chain and updating their plans to avoid future out-of-stock situations.”

Leibman points to a recent Institute for Supply Management survey that showed 75 percent of the companies surveyed had been affected by COVID-19, yet 44 percent of those companies had no plan in place to deal with that type of disruption.

Supply and demand have also shifted, creating a new set of challenges for domestic and international supply chain players. Products such as toilet paper, medical supplies, and grocery meats have seen a spike in demand since the pandemic reached the United States. These and other consumer trends have defined a new wave of purchasing habits that have essentially redefined what effective production looks like.

“Few could have predicted the run on toilet paper that occurred early in the pandemic, or the meat shortage that seems to be occurring today,” Leibman says. “Regardless of how this demand plays out, manufacturers will certainly need to be able produce and modify production to meet the needs of the economy and support customers/consumers through the enhanced use of ecommerce platforms and automated processes to minimize turnaround time. Now, rather than having a business ecosystem that prizes vendor-managed inventory, the reduction of inventory holding costs, and just-in-time delivery, manufacturers may have to re-gauge their production cycles and capabilities to meet their customers’ new purchasing patterns, which could include the use of forward inventories and safety stocks and perhaps larger replenishment volumes.”

The COVID-19 pandemic has revealed a lot about the current state of the global supply chain to the same degree that it challenged traditional predictive risk models. The fact of the matter is that business continuity and risk assessment going forward will not be the same–at least for a while.

“Countless industries are saying that they used to be so good at prediction, and now all their prediction models are out the window,” explains Marc Busch, a Business Diplomacy professor at Georgetown University. “This will require learning, and the question is how long will that learning take and how much will businesses invest in it? One way or another, the ‘new normal’ is going to have to be diagnosed. Market factors need to be considered. The ability to digitally gain enough information and predictive power to handle demand or supply shocks is paramount in moving forward and recovering.”

New challenges will arise as global traders determine the next steps in sourcing and site selection as well. What will make sense in the near future to better predict disruption management is an inevitable conversation.

“In moments of crisis, there’s an opportunity for businesses to reevaluate how they’ve been operating,” Busch says. “New entrants into well-formed supply chains may find that this is precisely the moment to pitch themselves to those companies that want to diversify, but aren’t yet willing to start shuffling assets around the world (i.e. out of China). This was the case in the financial crisis and it’s likely to be an opportunity soon again. There’s going to be a lot of new discoveries and the question is: Who is going to be learning.”

As this story was being published, retail stores and restaurants had just started the process of reopening and allowing customers back into their establishments. For many, customers are still required to wear face masks and maintain social distancing while capacity limits are cut in half if not more. The relief is found through the restarting of local business operations; however, it’s a slow and steady process that requires the support of customers to kickstart our economy once again. This kickstarting means rehires for business owners and working again for the countless people who lost their only source of income amid COVID-19.

“There is no doubt that people are eager to return to usual practices,” Busch says. “Some of the ways in which we collect our goods are going to forever be different. Businesses will have to learn like the rest of us. The new etiquette in business—the way in which services and goods are sold—will depend on how quickly and how fully we all come to grips with the new normal, and there are bound to be surprises. It is going to be difficult to determine how businesses should best try to rejuvenate trust and coax people into something like their usual consumption patterns.”

Retailers, restaurants, and entertainment venues aren’t the only ones that experienced unprecedented shifts, however. Amid the COVID-19 pandemic and the economic chaos, crude oil prices plummeted to negative numbers spurred by the significant drop in global demand. Although the market is now back to what we are used to (for the most part), regulations remain a big part of the foreseeable future in navigating such disruptions.

“On the trade side, for now, the industry should expect status quo for the immediate future,” explains David McCullough, partner in the Energy & Infrastructure practice group at the New York office of Eversheds Sutherland (US) LLP. “If there is to be another price shock where physical crude oil prices go negative or very low, we will see a real push for measures such as the waiver of the Renewable Fuel Standard (RFS), the waiver of the Jones Act and imposing crude oil and potentially refined product import restrictions specifically on non-North American sources.”

Opposite of what brick-and-mortar retailers experienced, the oil industry was not nearly as caught off-guard. In fact, according to McCullough, the majority was prepared. “There were anticipations of crude prices going negative and there were negative pricing clauses built into contracts for this reason,” he explains. “When this instance occurred, several large players were prepared. The situation was largely focused on a few players that got squeezed in the market. On the refined product side of the market, there are a few sectors that still do not seem to fully appreciate the demand destruction that has occurred and the ramifications of this demand destruction. For example, there will be significantly less demand for environmental credits under the Renewable Fuel Standard and California Low Carbon Fuel Standard. Despite this, we are still seeing the environmental credits remaining relatively robust. The market may not be fully understanding that the massive drop-off in demand for gasoline and diesel will also result in a drop-off in demand for these environmental credits.”

It boils down to visibility while clearly understanding and predicting market disruptions. As mentioned previously, the ways in which business is conducted have been changed drastically (for any industry, really). This change does not have to be met with complete failure, but it must be met with resilience through the utilization of the tools already available to us. Unlike past pandemics, modern businesses have a robust technology toolbox readily deployable. Virus or no virus, technology provides more opportunity now than it has ever before for all of us impacted by COVID-19. Technology is the critical and obvious part of the equation. Technology can support all parts of the supply chain from production and distribution to consumers and the economy. Those that tap into its potential will undoubtedly be among those that recover successfully.

“When shippers, retailers and supply chain professionals fail to understand and embrace the importance of digitization in the supply chain, it shines a spotlight on the weak points of the industry,” states Glenn Jones, GVP Products at Blume Global. “This has been abundantly clear over the past several months and forced the accelerated digitization of the industry, which traditionally has been slow to adopt new technologies.”

Jones points to a recent survey in which 67 percent of shipping and freight professionals vowed to invest in new supply chain technologies due to the pandemic. “To remain competitive, organizations need digitally empowered logistics platforms that leverage data to make informed decisions quickly,” he says. “Companies need to expect the unexpected. We can anticipate a significant disruption to the supply chain almost every year, we just do not know what that disruption will be. What is critical is being prepared for that disruption, and a digitized supply chain operation is your best chance for responding quickly to what your customers need, when they need it.”

So, what have we learned? Are the lessons of COVID-19 rooted in the technology we already possess? For some, the answer will be yes while for others, proactivity and prediction will serve as major differentiators in recovery and rebuilding the nation’s economy.

“The impact of COVID-19 on the supply chain, and the world, underscores the importance of collaboration amongst colleagues, partners and with customers,” Jones concludes. “The on-demand needs of current supply chains will lead to an increase in digital supply chain platforms. These platforms will enable companies to scale up or down based on demand. This will be made possible by large networks of carrier partners across all modes of transportation providing intel in real time. A digitally empowered adaptive/flexible responsive logistics platform that leverages a global carrier network will enable companies to quickly move to alternate suppliers in other regions when needed and provide better data across multiple resources, ensuring companies can make informed decisions at every mode and along every mile—no matter the crisis.”

Each step of the recovery process will be a testament to our humanity and exactly how willing we are to support each other and the economy in times of crisis. COVID-19 continues to test our limits, our grit, and our tenacity on an international scale.

It is a testament to how much we appreciate those who protect us and continue to work on the frontlines for those who are sick, while others continue working to keep the supply chain moving. All of these workers are essential—farmers, supply chain managers, truckers, grocery workers, first responders, IT professionals, business owners, and beyond. We are all connected in some form or capacity and have been throughout this crisis. How we come out of this crisis will be the real determination of the economic future.

__________________________________________________________________

David McCullough, a Partner at Eversheds Sutherland, counsels producers, refiners, commodity traders and distributors on the production, trade and movement of energy commodities, particularly crude oil, petroleum products and renewable fuels.

Glenn Jones, GVP Products at Blume Global, 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.

Ron Leibman is head of McCarter & English’s Transportation, Logistics & Supply Chain Management practice. A respected leader in supply chain law with more than 40 years of experience, he brings valuable industry insights with prior experience as a senior logistics executive at Wakefern Food Corp. (ShopRite Supermarkets) and home-furnishing retailer Fortunoff’s. He is a member of Syracuse University’s Supply Chain Advisory Board at the Whitman School of Management.

Marc L. Busch is the Karl F. Landegger Professor of International Business Diplomacy at the Edmund A. Walsh School of Foreign Service at Georgetown University and a nonresident senior fellow in the Atlantic Council.

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Global Direct Dye Market Decreased by -3.6% to $1.9B in 2019

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IndexBox has just published a new report: ‘World – Direct Dyes And Preparations Based Thereon – Market Analysis, Forecast, Size, Trends And Insights’. Here is a summary of the report’s key findings.

After two years of growth, the global direct dye market decreased by -3.6% to $1.9B in 2019. Overall, consumption, however, continues to indicate a relatively flat trend pattern in the past decade. The pace of growth appeared the most rapid in 2014 when the market value increased by 13% year-to-year. As a result, consumption reached a peak level of $2.2B. From 2015 to 2019, the growth of the global market failed to regain momentum.

Consumption by Country

China ($460M), the U.S. ($333M) and India ($144M) were the countries with the largest market size in 2019, with a combined 48% share of the global market. Japan, Brazil, Indonesia, Pakistan, Mexico, France, Canada, Germany, and the UK lagged somewhat behind, together accounting for a further 27%.

The countries with the highest levels of direct dye per capita consumption in 2019 were the U.S. (265 kg per 1000 persons), Canada (253 kg per 1000 persons), and the UK (235 kg per 1000 persons).

From 2009 to 2019, the most notable rate of growth in terms of direct dye per capita consumption, amongst the key consuming countries, was attained by China, while direct dye per capita consumption for the other global leaders experienced more modest paces of growth.

Global Trade of Direct Dyes 2009-2019

In 2019, global trade of direct dyes and preparations based thereon increased by 1% to 110K tonnes, rising for the fourth year in a row after two years of decline. The total export volume increased at an average annual rate of +4.5% from 2009 to 2019. The growth pace was the most rapid in 2010 with an increase of 32% against the previous year. Over the period under review, global exports attained the peak figure in 2019 and are likely to see gradual growth in the immediate term.

In value terms, direct dye exports fell modestly to $398M (IndexBox estimates) in 2019.

Exports by Country

In 2019, India (38K tonnes) represented the largest exporter of direct dyes and preparations based thereon, achieving 34% of total exports. Spain (18K tonnes) ranks second in terms of the total exports with a 16% share, followed by China (9.7%) and Germany (6.9%). Taiwan, Chinese (4.8K tonnes), the U.S. (4.7K tonnes), the UK (4.2K tonnes), France (4.1K tonnes), Mexico (3.1K tonnes), Turkey (2.7K tonnes), Poland (2.5K tonnes) and Italy (1.9K tonnes) took a little share of total exports.

From 2009 to 2019, the average annual rates of growth with regard to direct dye exports from India stood at +14.5%. At the same time, Turkey (+27.1%), Poland (+12.8%), Spain (+9.4%), France (+8.8%), the U.S. (+4.6%), the UK (+4.5%), Mexico (+3.6%) and Italy (+2.8%) displayed positive paces of growth. Moreover, Turkey emerged as the fastest-growing exporter exported in the world, with a CAGR of +27.1% from 2009-2019. China and Taiwan experienced a relatively flat trend pattern. By contrast, Germany (-4.2%) illustrated a downward trend over the same period. India (+25 p.p.), Spain (+9.5 p.p.), Turkey (+2.2 p.p.), France (+2.1 p.p.), Poland (+1.6 p.p.) and the U.S. (+1.5 p.p.) significantly strengthened its position in terms of the global exports, while Germany saw its share reduced by -3.6% from 2009 to 2019, respectively. The shares of the other countries remained relatively stable throughout the analyzed period.

In value terms, India ($110M) remains the largest direct dye supplier worldwide, comprising 28% of global exports. The second position in the ranking was occupied by China ($44M), with an 11% share of global exports. It was followed by Spain, with a 10% share.

In India, direct dye exports expanded at an average annual rate of +13.2% over the period from 2009-2019. In other countries, the average annual rates were as follows: China (+3.2% per year) and Spain (+7.3% per year).

Export Prices by Country

In 2019, the average direct dye export price amounted to $3,610 per tonne, dropping by -4.5% against the previous year. Over the period under review, the export price recorded a slight contraction. The pace of growth was the most pronounced in 2014 when the average export price increased by 13% y-o-y. As a result, the export price reached a peak level of $4,684 per tonne. From 2015 to 2019, the growth in terms of the average export prices remained at a somewhat lower figure.

There were significant differences in the average prices amongst the major exporting countries. In 2019, the country with the highest price was the UK ($6,110 per tonne), while France ($1,724 per tonne) was amongst the lowest.

From 2009 to 2019, 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.

Imports by Country

In 2019, Germany (12K tonnes), followed by Italy (7.2K tonnes), Japan (6.2K tonnes), France (6.1K tonnes), China (4.8K tonnes), the UK (4.7K tonnes) and Indonesia (4.5K tonnes) were the largest importers of direct dyes and preparations based thereon, together generating 45% of total imports. The following importers – the U.S. (4.1K tonnes), Taiwan, Chinese (3.4K tonnes), the Netherlands (3.4K tonnes), Poland (3.2K tonnes) and Spain (3.1K tonnes) – together made up 17% of total imports.

From 2009 to 2019, the most notable rate of growth in terms of purchases, amongst the key importing countries, was attained by Poland, while imports for the other global leaders experienced more modest paces of growth.

In value terms, the largest direct dye importing markets worldwide were Germany ($36M), Japan ($35M) and Italy ($31M), together accounting for 26% of global imports. China, Indonesia, the U.S., France, Spain, the Netherlands, the UK, Taiwan, Chinese and Poland lagged somewhat behind, together comprising a further 35%.

Import Prices by Country

In 2019, the average direct dye import price amounted to $3,933 per tonne, surging by 2.8% against the previous year.

Prices varied noticeably by the country of destination; the country with the highest price was Japan ($5,749 per tonne), while Poland ($2,290 per tonne) was amongst the lowest.

From 2009 to 2019, the most notable rate of growth in terms of prices was attained by Indonesia, while the other global leaders experienced more modest paces of growth.

Source: IndexBox AI Platform

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How COVID-19 is Accelerating the Rise of Digitalization in Supply Chain

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COVID-19 has brought about a digital transformation with businesses transferring their operations to deal with restricted movement, supply interruption, and office closures.

Predictably, all industries are running in a constant state of instability, and businesses are left with no other choice but to keep redesigning their strategies to adapt to the changing behavior of the consumers. For some companies, it meant shifting from conferences, meetings, and events to virtual streaming, or replacing B2B with the direct-to-consumer model. As individuals and businesses adapt to the newfound measures, people are discovering more productive methods to perform the same task, which is already making a major impact on the digital roadmap.

While digitalizing operational processes has been on the agenda of all companies big or small, it was something they always seem to put off. Automated end to end operational processes or live chat has always been something that businesses talked about but would ultimately put it on the back burner because they could not account for the impact of internal change to support it.

Things have changed. Businesses are now implementing new processes overnight and have already adjusted to the technology and eased into the changes. This quick progression of digital processes has brought about a new mindset, welcoming the future with an open mind to give the new technology a chance.

Obstacles that used to prevent businesses from welcoming innovations hardly correlated to the technology in question. They were rather tied to an unwillingness to change existing ways of systems and bureaucracy. Now that businesses have no choice but to welcome remote working, they have become more flexible and open to trying out new approaches.

Lately, Departments have now recorded a change in priorities with regard to its clients’ digital pipeline, ranging from internationally recognized brands to SMEs. One can’t help but wonder if COVID-19 has accelerated digital transformation.

Twitter (Susanne Wolk) Digital Transformation Quiz

 

Predicting the Unforeseeable 

In a fast-changing and unpredictable environment, the only way to adapt is to collect real-time, accurate data.

With digitized track and trace systems, you can spot your goods, locate where they are, and keep track of how they are selling. Barcoding is steadily being replaced by RFID tagging in managing this. The reason behind this is because as opposed to manual scanning, an RFID tag relays data simply by being in a sensor’s proximity. They seamlessly feed into the Internet of Things (IoT) and help you find your merchandise, track shipment conditions, and secure it to a database for scheduled invoicing, reporting, and replenishment without any human input.

In a survey recently reported by Zebra Technologies, 52% of firms out of 950 participating IT decision-makers in different organizations from 9 countries are currently utilizing RFID technology while 34% are planning to implement it in the coming years.

Business intelligence becomes a lot easier once the data is encapsulated. Dashboarding, which is centered visualization of important metrics, can now be achieved with a level of accuracy and speed that wasn’t otherwise possible. Whether you are tracking yearly freight volumes, operational compliance, or staff levels, new technology has made collecting and organizing the data painless and instant.

The advent of COVID-19 has highlighted the limitation of the human workforce and market unpredictability. Organizations are now on their way to fast-track the execution of this technology and one can expect to see a quantum leap in its adoption. Even after the economy recovers from this pandemic, it will enable organizations handling a lot of data to make informed strategic decisions. Additionally, the decrease in the physical handling of goods will also improve hygiene in workplaces.

Supplier Strain Management 

Managing unpredictable demand normally forces businesses to negotiate with suppliers, use up backup resources, and order with a certain level of elasticity. When operating in a global pandemic like today, these actions are not effective enough to safeguard the supply chain.

Information is everything. How much product are you able to buy, stock, and trade? Is there a way to help struggling suppliers by negotiating another product mix or placing large orders in advance? You can only know this with accurate data about your present shipment.

In the long run, businesses will likely diversify their supplier base due to COVID-19 and change consumer behavior as we have already witnessed in situations like the tariff war between U.S.-China and Brexit. Businesses no longer rely on just one country for their manufacturing needs. Instead, they have started to diversify operations by employing neighboring countries for production or shifting it closer to consumer markets which give them the flexibility to be able to pivot if a given location faces reduced capacity.

Traversing Transportation Difficulties 

Today, businesses are facing a lot of issues due to closed borders and restrictions on international transport. Those that are able to have a stronghold on the whereabouts of their shipment at any given time gain a competitive advantage. When a business is able to locate where exactly a shipment is holding and how long it will take to arrive, they gain the maximum level of flexibility should it be delayed or routed.

For instance, slow steaming has become quite common in the industry. This is an intentional choice of opting for slower methods of transportation in order to delay the delivery of non-perishables. By this method of “floating storage”, it buys time for the destination warehouses to create space for storage or find other ways to market in case of closed primary outlets. Such a strategy can be pulled off only with the help of accurate tracking processes which in turn will allow an unparalleled chance for responsiveness.

With the help of a reliable logistics partner, you will be able to navigate disruption. Find a partner that will be able to provide real-time updates on transit options and supply chains. Some years back, this would have taken several weeks to develop such a sophisticated view. But thanks to advanced technology, it has been reduced to minutes.

Moving Stagnant Stock

Businesses today are still investing large sums of money into leased or owned physical spaces and in certain cases, it is done without simultaneously building their online channels or presence. This pandemic is exposing the defect in failing to provide an omni-channel, with even powerful organizations having a hard time to move stock.

As the saying goes, the best time to develop your website would have been ten years ago; now is the second best time. As retailers, a central part of their strategy for growth should be e-commerce. When it comes to client inquiries, service providers must have a lead-generation website. Businesses sometimes need to be conducted face to face however, brands today require a reliable digital home. When you invest in the power of online presence, it unlocks a whole new world of global business opportunities to boost sales by connecting with customers.

Should your stock pile up, you will get sufficient warnings through the digital tracking systems. This in turn will give you enough time to pivot. A good way is to shift your non-perishable products to another space in your network. Diversify your offering by redeploying your unused equipment. You can also donate your surplus perishables to local charities and shelters as a goodwill gesture.

Supply chain technology has become accessible and powerful like never before and businesses that make use of it will pull through this pandemic. As we steer past the effects of this global disruption, both shippers and logistics companies will come to see that investing in automation and data furnishes the power to make agile, smart decisions.

_____________________________________________________________

Robert Jordan, a seasoned marketing professional with over 10 years of experience, currently working as Media Relations Manager at InfoClutch Inc, which provides technology database including Quickbooks customers list & many more technologies for your marketing campaign. His passion is writing. Now he works at Studyclerk as a content creator.
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CHINA IS GIVING ANCIENT SILK ROAD TRADE ROUTES A DIGITAL MAKEOVER

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The New Silk Road is Paved by Bits and Bytes

In 2015, China launched its Digital Silk Road (DSR) initiative. The DSR is the digital backbone for China’s modern reconstruction of the ancient silk trade routes. Against the backdrop of heightened U.S.-China tensions and the COVID-19 pandemic, the DSR is how China is creating new trade ecosystems and deepening its trade relations across the developing world.

The pandemic has propelled us all faster toward a digital world as we adapt to distance learning, working from home, telehealth, and online shopping, putting technology at the center of economic life.

The pandemic has also shone a spotlight on reliance on China for imports of critical products like personal protective equipment and pharmaceuticals.

These dynamics are fueling China to accelerate its global tech drive – embodied by the DSR – as well the backlash against it, primarily led by the United States. We are entering a “tech cold war” with China’s Digital Silk Road at the epicenter.

The DSR is neither well defined nor understood, but it will re-shape the global economy. Here’s what you need to know.

DSR quote

What the Digital Silk Road and McDonald’s Have in Common

Paul Triolo, a leading U.S.-based China tech analyst, compares the structure of the DSR to the groundbreaking business model of McDonald’s: In a word — it’s about franchising. China’s publicly traded tech giants establish technological outposts or “franchises” that receive political, financial, and branding benefits under the DSR marketing umbrella from the state, which China’s competitors claim tilts the playing field against other international players.

The Digital Heart of China’s Belt and Road

China’s Belt & Road Initiative (BRI) was announced by President Xi Jinping in 2013. It’s an ambitious plan to rebuild the land (belt) and maritime (road) trade routes of the ancient silk trade routes, extending throughout the developing world from central Asia to the Middle East, and to Latin America and the Caribbean. To date, 137 countries have signed onto the program. All in, BRI is estimated to be a trillion-dollar infrastructure build, but the BRI is already showing signs of shifting global trade flows.

As the signature foreign policy of President Xi, activities to advance the BRI are a top priority across Chinese government and business sector. The Digital Silk Road is a key part of the BRI vision. So far, 30 countries have MOUs with China for DSR projects – spanning from Laos up to Kazakhstan, across to Egypt, Saudi Arabia, and the UAE and stretching to Peru and the Dominican Republic.

The DSR encompasses a vast array of tech projects: building the physical infrastructure for 5G networks, laying fiber optic cable, and constructing and equipping data centers. By design, it also includes promoting China’s standards for telecom, satellite navigation, artificial intelligence, quantum computing, and electronic payment systems throughout the countries where DSR projects are underway.

DSR projects combine the hard and soft infrastructure that enable the trade efficiencies promised by this next generation of technology. Under the so-called “franchise” model, public and private Chinese tech companies leverage state funding, political support, and the China brand to compete effectively for major projects around the world. The growing network of BRI trade hubs are connected through smart ports and digital free trade zones.

Title to DSR map
Merics_Digital-Silkroad-Tracker_RGB_final_web_0

Tech-Fueled Competition

Many developing countries are attracted to China’s investments that enable technological leapfrogging and the deployment of next-generation technologies in manufacturing and service-delivery. But China’s aggressive strategy has led to mounting concerns about the security implications of China’s potential dominance in the technology that drives the global economy, but that could also be used in more concerning ways.

Chinese tech products, particularly in telecommunications, are alleged to enable cyber espionage, providing the Chinese Communist Party access to sensitive data. China’s push to conform international standards to Chinese tech products could effectively shut out competition in third markets. The Trump administration initiated an investigation into unfair trade practices such as state funding to companies like Huawei that enable them to undercut Western competitors on price. The international community is also raising concerns about China’s use of facial surveillance products to target and suppress political, religious, or ethnic minorities, amounting to fears that a techno-authoritarianism governance model could also be exported.

Some of these concerns may be overstated, but the lines between private competition and state security are blurred when it comes to emerging technologies in China. Chinese companies are capable of producing high-quality 5G telecom products. China’s satellite navigation system, known as Beidou, went fully operational in June, and stands as a competitor to the U.S. GPS system and Europe’s Galileo system. China dominates the financial technology space, largely leapfrogging credit cards and offering solutions to global financial inclusion. China is also launching a digital currency that will be piloted domestically and along the BRI. Most controversially, China is the global leader in surveillance and facial recognition technology, offering these products at a much lower cost without the significant export controls used by other countries.

30 countries MOU revised

How a Tech War Could Affect Trade

The DSR is part of a larger tech race which could divide the world into at least two systems: one operating with Chinese products and standards, the other with Western products and standards. Separate systems could face interoperability issues and challenges with cross border data flows or become subject to geopolitical fractures that force countries to choose political sides when they choose tech systems. Or, countries may have to build infrastructure to accommodate both systems, at great expense, which could undermine many of the trade efficiencies that would otherwise be achieved by these technologies.

The opening battles of the tech race are already producing trade disruptions. After years of pressure by the United States, the UK announced last week that Huawei products are barred from their telecom networks, citing national security concerns. British telecom companies are prohibited from buying Huawei products after this year and will have seven years to remove all Huawei products from current networks. The United States placed Huawei on its Entity List, limiting U.S. exports to Huawei that will severely restrict the company’s access to the semiconductors needed to make their products. That lack of access will also factor in countries’ decisions about the viability of Huawei systems in the long run. And last week, U.S. Secretary of State Mike Pompeo announced that employees of Huawei and other Chinese tech firms will not be eligible for U.S. visas, citing complicity in human rights violations.

Despite the international response, China’s biggest challenge may arise from its internal policies restricting cross border data flows, as well as from conflicts between its domestic practices and other country’s requirements to secure data and protect privacy.

Where the Fault Lines May Emerge

Even as it works to overcome these hurdles, China’s tech drive into developing countries will continue. Many developing countries are reeling from the pandemic and falling behind on building digital infrastructure.

The Chinese government offers an attractive lifeline to developing countries, packaging hard infrastructure and software at good prices and high quality. It can build a new port and digitize traditional port operations while investing in the development of smart cities around those smart ports. China’s offer may prove to be more consequential in practical and political terms than ever before. Without strong alternatives, the tech competition could create fault lines in developing countries, further fracturing global trade.

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Leigh Wedell

Leigh Wedell is a Founder and COO of Basilinna and Senior Fellow at the Paulson Institute. A veteran facilitator of U.S.-China business relations, she has advised leading multinational firms across all major business sectors on China market entry and expansion, crisis management, and corporate social responsibility programs. She began her career working on political development projects traveling to more than half of China’s provinces.

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

aluminium foil
Archives, EU Trade, Global Trade Daily

EU Aluminium Foil Market Increased 0.3% to $5.2B

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

In 2019, the EU aluminium foil market increased by 0.3% to $5.2B, rising for the third year in a row after two years of decline. The market value increased at an average annual rate of +1.1% over the period from 2009 to 2019; the trend pattern remained consistent, with somewhat noticeable fluctuations being observed in certain years. The most prominent rate of growth was recorded in 2011 when the market value increased by 19% against the previous year. As a result, consumption attained a peak level of $5.4B. From 2012 to 2019, the growth of the market remained at a somewhat lower figure.

EU Consumption by Country

The countries with the highest volumes of aluminium foil consumption in 2019 were Italy (275K tonnes), Germany (144K tonnes) and France (137K tonnes), with a combined 42% share of total consumption.

From 2009 to 2019, the biggest increases were in Italy, while aluminium foil consumption for the other leaders experienced more modest paces of growth.

In value terms, Italy ($872M), Germany ($697M) and France ($485M) were the countries with the highest levels of market value in 2019, together comprising 40% of the total market. These countries were followed by the UK, Spain, Poland, Belgium, the Netherlands, the Czech Republic, Sweden, Austria and Greece, which together accounted for a further 44%.

The countries with the highest levels of aluminium foil per capita consumption in 2019 were Belgium (5.57 kg per person), Italy (4.62 kg per person) and Sweden (3.82 kg per person).

Market Forecast to 2030

Driven by increasing demand for aluminium foil in the European Union, 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 +1.7% for the period from 2019 to 2030, which is projected to bring the market volume to 1.6M tonnes by the end of 2030.

Production in the EU

Aluminium foil production rose to 1.3M tonnes in 2019, picking up by 1.5% on 2018. The total output volume increased at an average annual rate of +1.3% over the period from 2009 to 2019; the trend pattern remained relatively stable, with somewhat noticeable fluctuations being observed in certain years. The pace of growth was the most pronounced in 2010 when the production volume increased by 7.2% y-o-y. Over the period under review, production hit record highs in 2019 and is likely to see steady growth in the immediate term.

Imports in the EU

Aluminium foil imports expanded markedly to 1.2M tonnes in 2019, picking up by 8.2% against 2018.

In value terms, aluminium foil imports contracted to $4.6B (IndexBox estimates) in 2019. The total import value increased at an average annual rate of +2.0% over the period from 2009 to 2019; however, the trend pattern remained consistent, with somewhat noticeable fluctuations being recorded throughout the analyzed period. The pace of growth was the most pronounced in 2011 with an increase of 23% against the previous year. As a result, imports attained a peak of $5B. From 2012 to 2019, the growth imports remained at a somewhat lower figure.

Imports by Country

In 2019, Germany (176K tonnes), France (155K tonnes), Italy (128K tonnes), the UK (121K tonnes), Poland (89K tonnes), Belgium (81K tonnes), Spain (65K tonnes), the Netherlands (59K tonnes), Austria (42K tonnes), the Czech Republic (38K tonnes), Denmark (28K tonnes) and Hungary (26K tonnes) was the key importer of aluminium foil in the European Union, making up 88% of total import.

From 2009 to 2019, the biggest increases were in Italy, while purchases for the other leaders experienced more modest paces of growth.

In value terms, Germany ($845M), Italy ($498M) and the UK ($459M) appeared to be the countries with the highest levels of imports in 2019, with a combined 39% share of total imports. France, Poland, Spain, the Netherlands, Belgium, the Czech Republic, Austria, Hungary and Denmark lagged somewhat behind, together comprising a further 48%.

The Czech Republic recorded the highest growth rate of the value of imports, in terms of the main importing countries over the period under review, while purchases for the other leaders experienced more modest paces of growth.

Import Prices by Country

The aluminium foil import price in the European Union stood at $3,971 per tonne in 2019, dropping by -13.1% against the previous year. Over the period under review, import prices attained the maximum at $5,228 per tonne in 2011; however, from 2012 to 2019, import prices stood at a somewhat lower figure.

There were significant differences in the average prices amongst the major importing countries. In 2019, the country with the highest price was the Czech Republic ($4,973 per tonne), while Belgium ($2,775 per tonne) was amongst the lowest.

From 2009 to 2019, the most notable rate of growth in terms of prices was attained by the Czech Republic, while the other leaders experienced a decline in the import price figures.

Source: IndexBox AI Platform

dried onion
Archives, Global Trade Daily, News

Germany’s Dried Onion Market Was Finally on the Rise to Reach $53M in 2019

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IndexBox has just published a new report: ‘Germany – Dried Onions – Market Analysis, Forecast, Size, Trends And Insights’. Here is a summary of the report’s key findings.

In 2019, the German dried onion market was finally on the rise to reach $53M after two years of decline. The market value increased at an average annual rate of +1.4% from 2009 to 2019; however, the trend pattern remained consistent, with only minor fluctuations being observed throughout the analyzed period. The most prominent rate of growth was recorded in 2014 when the market value increased by 25% y-o-y. Dried onion consumption peaked in 2019 and is likely to see gradual growth in the near future.

Production in Germany

In 2019, production of dried onions increased by 4.2% to 5.7K tonnes, rising for the fourth consecutive year after two years of decline. In general, production saw a remarkable increase. The most prominent rate of growth was recorded in 2017 with an increase of 62% year-to-year. Dried onion production peaked in 2019 and is expected to retain growth in the near future.

In value terms, dried onion production amounted to $9.2M in 2019 estimated at export prices. The total output value increased at an average annual rate of +1.3% over the period from 2009 to 2019; however, the trend pattern remained consistent, with somewhat noticeable fluctuations being observed throughout the analyzed period. The most prominent rate of growth was recorded in 2016 with an increase of 12% y-o-y. Dried onion production peaked at $9.5M in 2013; however, from 2014 to 2019, production stood at a somewhat lower figure.

Imports into Germany

In 2019, overseas purchases of dried onions were finally on the rise to reach 22K tonnes after two years of decline. In value terms, dried onion imports rose rapidly to $53M (IndexBox estimates) in 2019. Overall, imports recorded a relatively flat trend pattern. The pace of growth was the most pronounced in 2014 with an increase of 20% y-o-y. As a result, imports reached a peak of $66M. From 2015 to 2019, the growth imports failed to regain the momentum.

Imports by Country

In 2019, India (8.2K tonnes) constituted the largest dried onion supplier to Germany, with a 37% share of total imports. Moreover, dried onion imports from India exceeded the figures recorded by the second-largest supplier, Egypt (3K tonnes), threefold. China (2.8K tonnes) ranked third in terms of total imports with a 12% share.

From 2009 to 2019, the average annual growth rate of volume from India amounted to +6.3%. The remaining supplying countries recorded the following average annual rates of imports growth: Egypt (-7.7% per year) and China (+2.6% per year).

In value terms, the largest dried onion suppliers to Germany were India ($15M), China ($8.8M), and Egypt ($7.6M), together comprising 59% of total imports. The U.S., the UK, France, and the Netherlands lagged somewhat behind, together comprising a further 26%.

In terms of the main suppliers, the UK recorded the highest rates of growth with regard to the value of imports, over the period under review, while purchases for the other leaders experienced more modest paces of growth.

Import Prices by Country

In 2019, the average dried onion import price amounted to $2,356 per tonne, with an increase of 7.1% against the previous year. In general, the import price, however, recorded a mild setback. The growth pace was the most rapid in 2013 an increase of 12% year-to-year. Over the period under review, average import prices attained the maximum at $2,861 per tonne in 2011; however, from 2012 to 2019, import prices remained at a lower figure.

There were significant differences in the average prices amongst the major supplying countries. In 2019, the country with the highest price was the U.S. ($3,202 per tonne), while the price for India ($1,780 per tonne) was amongst the lowest.

From 2009 to 2019, the most notable rate of growth in terms of prices was attained by the U.S., while the prices for the other major suppliers experienced more modest paces of growth.

Source: IndexBox AI Platform

frozen potatoes
Archives, Global Trade Daily, News

Britons Consume the Most Frozen Potatoes in the EU, nearly 70% Comes from the Netherlands and Belgium

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

The UK is the largest market for frozen fries and, alongside Ireland, enjoys the highest per capita consumption in the union. The lion’s share of supplies, almost 760 thousand tonnes, comes from neighboring countries, namely the Netherlands and Belgium; thus making Britain the largest importer of frozen potatoes in Europe.

EU Consumption by Country

The countries with the highest volumes of frozen potato consumption in 2019 were the UK (1.1M tonnes), Germany (682K tonnes), and France (427K tonnes), together comprising 55% of total consumption. Spain, Italy, Poland, the Netherlands, the Czech Republic, Ireland, Belgium, Romania, and Austria lagged somewhat behind, together comprising a further 33%.

From 2009 to 2019, the most notable rate of growth in terms of frozen potato consumption, amongst the main consuming countries, was attained by Romania, while frozen potato consumption for the other leaders experienced more modest paces of growth.

In value terms, the UK ($1.1B), Germany ($754M), and France ($391M) constituted the countries with the highest levels of market value in 2019, with a combined 60% share of the total market. These countries were followed by Italy, Spain, Poland, the Netherlands, Ireland, Belgium, Romania, the Czech Republic, and Austria, which together accounted for a further 27%.

The countries with the highest levels of frozen potato per capita consumption in 2019 were Ireland (19 kg per person), the UK (17 kg per person), and the Czech Republic (12 kg per person).

Market Forecast to 2030

Driven by increasing demand for frozen potato in the European Union, 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 +0.6% for the period from 2019 to 2030, which is projected to bring the market volume to 4.4M tonnes by the end of 2030.

Production in the EU

In 2019, the EU’s frozen potato production decreased by -1.1% to 6.1M tonnes for the first time since 2011, thus ending a seven-year rising trend. The total output volume increased at an average annual rate of +3.4% over the period from 2009 to 2019; however, the trend pattern indicated some noticeable fluctuations being recorded throughout the analyzed period. The growth pace was the most rapid in 2018 when the production volume increased by 8.7% y-o-y. As a result, production attained a peak volume of 6.2M tonnes and then reduced in the following year.

In value terms, frozen potato production amounted to $5.6B in 2019 estimated at export prices.

EU Production by Country

The countries with the highest volumes of frozen potato production in 2019 were Belgium, the Netherlands, and Germany.

From 2009 to 2019, the most notable rate of growth in terms of frozen potato production, amongst the leading producing countries, was attained by Belgium, while frozen potato production for the other leaders experienced more modest paces of growth.

Imports in the EU

For the seventh consecutive year, the European Union recorded growth in supplies from abroad of frozen potatoes, which increased by 8% to 3.8M tonnes in 2019. The total import volume increased at an average annual rate of +4.7% from 2009 to 2019.

In value terms, frozen potato imports expanded markedly to $3.6B (IndexBox estimates) in 2019. The total import value increased at an average annual rate of +4.6% from 2009 to 2019; however, the trend pattern indicated some noticeable fluctuations being recorded in certain years. The most prominent rate of growth was recorded in 2011 when imports increased by 21% against the previous year. The level of imports peaked in 2019 and is expected to retain growth in the near future.

Imports by Country

The UK (759K tonnes) and France (636K tonnes) represented roughly 36% of total imports of frozen potatoes in 2019. The Netherlands (409K tonnes) took an 11% share (based on tonnes), which put it in second place, followed by Germany (9.4%), Spain (7.9%), Italy (6.7%), and Belgium (4.8%). The following importers – Poland (125K tonnes), Ireland (102K tonnes), Romania (86K tonnes), Greece (81K tonnes) and Portugal (79K tonnes) – together made up 12% of total imports.

From 2009 to 2019, the biggest increases were in Romania, while purchases for the other leaders experienced more modest paces of growth.

In value terms, the largest frozen potato importing markets in the European Union were the UK ($767M), France ($586M), and Germany ($400M), together comprising 48% of total imports. The Netherlands, Italy, Spain, Belgium, Ireland, Poland, Greece, Portugal, and Romania lagged somewhat behind, together comprising a further 39%.

In terms of the main importing countries, Poland saw the highest growth rate of the value of imports, over the period under review, while purchases for the other leaders experienced more modest paces of growth.

Import Prices by Country

In 2019, the frozen potato import price in the European Union amounted to $949 per tonne, standing approx. at the previous year.

There were significant differences in the average prices amongst the major importing countries. In 2019, the country with the highest price was Italy ($1,174 per tonne), while Romania ($721 per tonne) was amongst the lowest.

From 2009 to 2019, the most notable rate of growth in terms of prices was attained by the UK, while the other leaders experienced more modest paces of growth.

Source: IndexBox AI Platform

spice
Archives, Global Trade Daily, Imports/Exports

The Global Spice Market Lacks to Regain its Former Momentum

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

The global spice market amounted to $33.1B in 2019, leveling off at 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, the total market indicated a buoyant expansion from 2007 to 2019: its value increased at an average annual rate of +3.7% over the last twelve years. The trend pattern, however, indicated some noticeable fluctuations being recorded throughout the analyzed period. Global consumption peaked at $33.7B in 2017; however, from 2018 to 2019, consumption failed to regain the momentum.

Consumption by Country

India (4.8M tonnes) remains the largest spice consuming country worldwide, comprising approx. 37% of total volume. Moreover, spice consumption in India exceeded the figures recorded by the second-largest consumer, Indonesia (634K tonnes), eightfold. Bangladesh (543K tonnes) ranked third in terms of total consumption with a 4.1% share.

In India, spice consumption expanded at an average annual rate of +4.4% over the period from 2007-2019. The remaining consuming countries recorded the following average annual rates of consumption growth: Indonesia (+1.9% per year) and Bangladesh (+2.1% per year).

In value terms, India ($8.6B) led the market, alone. The second position in the ranking was occupied by Indonesia ($1.9B). It was followed by Ethiopia.

In 2019, the highest levels of spice per capita consumption was registered in Nepal (14 kg per person), followed by Thailand (6.25 kg per person), Viet Nam (4 kg per person) and Turkey (3.71 kg per person), while the world average per capita consumption of spice was estimated at 1.69 kg per person.

From 2007 to 2019, the average annual growth rate of the spice per capita consumption in Nepal amounted to +4.9%. The remaining consuming countries recorded the following average annual rates of per capita consumption growth: Thailand (+2.3% per year) and Viet Nam (+6.9% per year).

Market Forecast 2019-2030

Driven by increasing demand for spice worldwide, the market is expected to continue an upward consumption trend over the next decade. Market performance is forecast to retain its current trend pattern, expanding with an anticipated CAGR of +3.1% for the period from 2019 to 2030, which is projected to bring the market volume to 18M tonnes by the end of 2030.

Production

In 2019, the amount of spices produced worldwide rose modestly to 13M tonnes, growing by 4.3% against 2018 figures. Overall, the total output indicated moderate growth from 2007 to 2019: its volume increased at an average annual rate of +4.0% over the last twelve-year period. The trend pattern, however, indicated some noticeable fluctuations being recorded throughout the analyzed period. Based on 2019 figures, production increased by +60.2% against 2007 indices. Global production peaked in 2019 and is likely to see gradual growth in the immediate term. The general positive trend in terms output was largely conditioned by a temperate expansion of the harvested area and modest growth in yield figures.

Production by Country

The country with the largest volume of spice production was India (5.7M tonnes), accounting for 42% of total volume. Moreover, spice production in India exceeded the figures recorded by the second-largest producer, China (1.2M tonnes), fivefold. Indonesia (659K tonnes) ranked third in terms of total production with a 4.9% share.

In India, spice production increased at an average annual rate of +4.7% over the period from 2007-2019. The remaining producing countries recorded the following average annual rates of production growth: China (+3.7% per year) and Indonesia (+1.0% per year).

Harvested Area

In 2019, the global harvested area of spices amounted to 6.7M ha, increasing by 3% against the year before. The harvested area increased at an average annual rate of +2.4% over the period from 2007 to 2019; the trend pattern remained consistent, with somewhat noticeable fluctuations in certain years. The growth pace was the most rapid in 2016 when the harvested area increased by 7% y-o-y. Over the period under review, the harvested area dedicated to spice production reached the maximum in 2019 and is expected to retain growth in the near future.

Yield

In 2019, the global average spice yield was estimated at 2 tonne per ha, therefore, remained relatively stable against the previous year. The yield figure increased at an average annual rate of +1.6% from 2007 to 2019; the trend pattern remained consistent, with somewhat noticeable fluctuations throughout the analyzed period. The growth pace was the most rapid in 2011 with an increase of 8.4% y-o-y. The global yield peaked at 2 tonne per ha in 2017; afterwards, it flattened through to 2019.

Imports

For the sixth consecutive year, the global market recorded growth in purchases abroad of spices, which increased by 2.8% to 3.5M tonnes in 2019. Overall, total imports indicated a temperate increase from 2007 to 2019: its volume increased at an average annual rate of +4.6% over the last twelve-year period. The trend pattern, however, indicated some noticeable fluctuations being recorded throughout the analyzed period. Over the period under review, global imports reached the maximum in 2019 and are likely to continue growth in the near future.

In value terms, spice imports totaled $10.5B (IndexBox estimates) in 2019. In general, imports recorded buoyant growth. The growth pace was the most rapid in 2011 when imports increased by 25% year-to-year. Over the period under review, global imports also hit record highs in 2019 and are likely to see gradual growth in the immediate term.

Imports by Country

In 2019, the U.S. (428K tonnes), followed by Viet Nam (190K tonnes) and India (172K tonnes) represented the main importers of spices, together making up 23% of total imports. The following importers – Bangladesh (154K tonnes), Malaysia (142K tonnes), Germany (137K tonnes), the Netherlands (131K tonnes), Pakistan (129K tonnes), the United Arab Emirates (116K tonnes), Saudi Arabia (109K tonnes), Japan (107K tonnes) and the UK (104K tonnes) – together made up 33% of total imports.

From 2007 to 2019, average annual rates of growth with regard to spice imports into the U.S. stood at +3.9%. At the same time, Viet Nam (+28.4%), India (+8.2%), the Netherlands (+6.3%), the UK (+4.9%), Bangladesh (+4.6%), Saudi Arabia (+4.4%), Pakistan (+3.7%), Germany (+3.5%) and the United Arab Emirates (+1.3%) displayed positive paces of growth. Moreover, Viet Nam emerged as the fastest-growing importer imported in the world, with a CAGR of +28.4% from 2007-2019. Malaysia experienced a relatively flat trend pattern. By contrast, Japan (-1.0%) illustrated a downward trend over the same period. Viet Nam (+5.2 p.p.), the U.S. (+4.6 p.p.), India (+3.1 p.p.), the Netherlands (+2 p.p.) and Bangladesh (+1.9 p.p.) significantly strengthened its position in terms of the global imports, while the shares of the other countries remained relatively stable throughout the analyzed period.

In value terms, the U.S. ($1.7B) constitutes the largest market for imported spices worldwide, comprising 16% of global imports. The second position in the ranking was occupied by Germany ($597M), with a 5.7% share of global imports. It was followed by India, with a 5.1% share.

From 2007 to 2019, the average annual rate of growth in terms of value in the U.S. amounted to +8.3%. In the other countries, the average annual rates were as follows: Germany (+5.7% per year) and India (+12.1% per year).

Import Prices by Country

In 2019, the average spice import price amounted to $3,034 per tonne, therefore, remained relatively stable against the previous year. Over the last twelve-year period, it increased at an average annual rate of +2.7%. The most prominent rate of growth was recorded in 2011 an increase of 19% year-to-year. Global import price peaked at $3,430 per tonne in 2015; however, from 2016 to 2019, import prices failed to regain the momentum.

Prices varied noticeably by the country of destination; the country with the highest price was Germany ($4,374 per tonne), while Bangladesh ($1,132 per tonne) was amongst the lowest.

From 2007 to 2019, the most notable rate of growth in terms of prices was attained by Saudi Arabia, while the other global leaders experienced more modest paces of growth.

Source: IndexBox AI Platform

trade policies
Archives, Global Trade Daily, International Trade

HOW ARE COUNTRIES MAINSTREAMING GENDER IN TRADE POLICIES AND PRACTICES?

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Tracking How Much She Trades

On July 7, the International Trade Centre rolled out a new tool to track the types and prevalence of trade policies designed to promote more trade by women-owned businesses.

Called “SheTrades Outlook” and funded by the UK, the index initially covers 25 countries as wide-ranging as Australia and Canada to Mauritius, South Africa, Rwanda, and Samoa, applying quantitative and qualitative data to rank them across 83 indicators and six policy areas. Analysts interviewed more than 460 institutions and organizations in these countries, evaluating factors including women’s access to opportunities for skills development, finance, and global markets, and networks.

Dashboard of SheTrades

The index also queries whether governments and national organizations offer tailored support to enterprises owned and run by women to enable them to grow their businesses globally, whether programs exist to help women entrepreneurs win government contracts, and if governments have begun to collect gender-disagreggated data that might better inform policies to support women in trade.

Finally, SheTrades Outlook compiles recommended practices across these policy areas to share the experiences of countries covered in the index as a global resource.

Example of SheTrades Tracker

Starting to Get the Picture

SheTrades Outlook seeks to create a more complete picture of how women participate in the global economy through trade. Doing so will help inform trade policies and national trade promotion programs that better serve women as critical drivers of productivity and economic growth worldwide.

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Andrea Durkin is the Editor-in-Chief of TradeVistas and Founder of Sparkplug, LLC. Ms. Durkin previously served as a U.S. Government trade negotiator and has proudly taught international trade policy and negotiations for the last fifteen years as an Adjunct Professor at Georgetown University’s Master of Science in Foreign Service program.

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