Hot Commodities: Restarting Global Trade

HC

Hot Commodities

Restarting Global Trade

[June 10th, 2020]

Hi all,

As cities and countries around the world are beginning to lessen their restrictions, global trade has also started seeing a reemergence. While some countries, like in Argentina, are attempting to reduce further damage by buying out bankrupt companies, other countries are diligently working with their international trade to create a higher price increase in the long run.

Additionally, Jordan’s agricultural sector had primarily depended on foreign workers before COVID-19, and now they find themselves having to reinvest in its citizens to get back to work. The pandemic will leave a significant impact on nations around the world. McKinsey reported that the pandemic could cost Africa billions in crop exports. At the same time, the global trade industry has reported crews left stranded while they begin noticing several bottlenecks within the supply chains.

Argentina Moves To Take Over Bankrupt Soy Crusher

The government of Argentina will take over soy crushing company Vicentin as it struggles with bankruptcy and the government to reduce further damage to any jobs and export business.

According to Reuters, Vicentin has a joint venture with Glencore PLC called Renova, which has remained in operation despite the financial woes of Vicentin. As Argentina is the worlds leading soybean meal exporter, Vicentin has been one of the largest operators in the country.

Argentina exported over $12 billion worth of soybean meal and soybean oil. The soy meal is used as livestock feed across Europe and Asia, while soy oil is used to produce cooking oils and biofuels.

SoyBeans

Lentil Prices Increase On News That India Reduced Its Import Duty

Prices of lentil have seen a 17% rise as the Indian government has lowered the import duty from 30% to 10% for three months as origin countries Australia and Canada look to take advantage of this development. This price increase has seen the price of lentils increase from $570 per metric ton to $670 per metric ton.

The Economic Times of India reports that even after a 25% lower crop from March-April compared to last year, some traders and millers are holding onto their harvest with the hope of a price increase in July.

Jordan’s Agricultural Sector Suffers Major Blow Due To Lack Of Foreign Workers

The Coronavirus outbreak has increased the pressures on the agricultural sector in Jordan, which introduced an initiative that allowed up to 12,000 foreign workers to register to return to their home countries.

The Jordan Times reports on how the country’s agricultural sector heavily depends on foreign workers even though before the outbreak, there have been challenges with worker’s rise in salaries and the halting of recruiting non-Jordanians.

The country is planning on implementing more local workers in the agricultural sector. Still, the Agricultural Engineers Association has asked the government to make their policies gradual to have sustainability and more time to train the local workers.

Crops

Coronavirus May Cost Africa Billions In Crop Exports

Bloomberg reports that up to 10 million farmers could be affected by the impact on Coronavirus and the slowdown of the global economy, which could cost Africa $4.8 billion in lost revenue in the exportation of products, especially cash crops.

Specifically, McKinsey & Company proclaimed that the global trade had been affected by the cancellation of flights, disruptions at ports, closures of factories, and loss of jobs in most of the destination countries. Meanwhile, producing countries are harvesting crops that would typically be shipped or airlifted, including flowers, cocoa beans, nuts, coffee, and fruit. Agricultural exports from Africa are estimated to be worth between $35 billion to $40 billion per year.

The McKinsey report forecasted that between $500 million and $2 billion in export revenue of fruit, vegetables, and nuts from countries including South Africa and Kenya. For cocoa exporting countries including Ghana and Ivory Coast, McKinsey estimates a decline in cocoa beans exports by as much as $2 billion, as well, a decrease in coffee exports for East Africa of up to $200 million and $600 million for flower exports from countries such as Kenya.

Shipping Industry Warns Of Trade Logjam As Crews Remain Stranded

Bloomberg reports that up to 10 million farmers could be affected by the impact on Coronavirus and the slowdown of the global economy, which could cost Africa $4.8 billion in lost revenue in the exportation of products, especially cash crops.

The global trade industry is at a point of restarting, and as expected, there remain several bottlenecks within the supply chains. Reportingly, 80% of world trade by volume is through maritime transport, including container vessels, fuel tankers, and dry bulk carriers. Challenges are emerging, as crews are unable to end their voyages as per their agreements or their home countries implemented travel restrictions.

The Financial Times reports that the shipping industry is calling on governments to support their efforts in managing the arrival and departures of the sea workers. They are doing so by categorizing them as crucial workers, allowing proper entrance documentation, creating safe areas at airports for their transit, and fast-tracking their movements. The estimated 1.8 million sea workers crew the world 96,000 commercial vessels.

The International Transport Workers’ Federation has stated that after June 16th, the labor agreement could no longer be extended in an attempt for workers to remain at sea beyond their current contracts.

Cargo

Ian Taylor, CEO and Chairman of Vitol Group

The former CEO and Chairman of Vitol Group Ian Taylor has died at 64. Taylor is credited for building Vitol from a small Dutch fuel merchant into the world’s largest independent oil trader, trading eight million barrels per day. He was known to be a risk-taker with billions of dollars of trades with Kazakhstan and even getting approval from the British government to supply refined oil to the opposition in Benghazi, Libya, in exchange for crude supplies after the fall of Muammar Gaddafi. Taylor has been described as “exceptional” by Russell Hardy, his successor at Vitol and “one of the last of the pioneers that helped transform the oil trading industry,” according to Ivan Glasenberg of Glencore.

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-Editors, Ronnie Luwero and Elena Lopez Del Carril

Hot Commodities

Restarting Global Trade

Hi all,

As cities and countries around the world are beginning to lessen their restrictions, global trade has also started seeing a reemergence. While some countries, like in Argentina, are attempting to reduce further damage by buying out bankrupt companies, other countries are diligently working with their international trade to create a higher price increase in the long run.

Additionally, Jordan’s agricultural sector had primarily depended on foreign workers before COVID-19, and now they find themselves having to reinvest in its citizens to get back to work. The pandemic will leave a significant impact on nations around the world. McKinsey reported that the pandemic could cost Africa billions in crop exports. At the same time, the global trade industry has reported crews left stranded while they begin noticing several bottlenecks within the supply chains.

Argentina Moves To Take Over Bankrupt Soy Crusher

The government of Argentina will take over soy crushing company Vicentin as it struggles with bankruptcy and the government to reduce further damage to any jobs and export business.

According to Reuters, Vicentin has a joint venture with Glencore PLC called Renova, which has remained in operation despite the financial woes of Vicentin. As Argentina is the worlds leading soybean meal exporter, Vicentin has been one of the largest operators in the country.

Argentina exported over $12 billion worth of soybean meal and soybean oil. The soy meal is used as livestock feed across Europe and Asia, while soy oil is used to produce cooking oils and biofuels.

SoyBeans

Lentil Prices Increase On News That India Reduced Its Import Duty

Prices of lentil have seen a 17% rise as the Indian government has lowered the import duty from 30% to 10% for three months as origin countries Australia and Canada look to take advantage of this development. This price increase has seen the price of lentils increase from $570 per metric ton to $670 per metric ton.

The Economic Times of India reports that even after a 25% lower crop from March-April compared to last year, some traders and millers are holding onto their harvest with the hope of a price increase in July.

Jordan’s Agricultural Sector Suffers Major Blow Due To Lack Of Foreign Workers

The Coronavirus outbreak has increased the pressures on the agricultural sector in Jordan, which introduced an initiative that allowed up to 12,000 foreign workers to register to return to their home countries.

The Jordan Times reports on how the country’s agricultural sector heavily depends on foreign workers even though before the outbreak, there have been challenges with worker’s rise in salaries and the halting of recruiting non-Jordanians.

The country is planning on implementing more local workers in the agricultural sector. Still, the Agricultural Engineers Association has asked the government to make their policies gradual to have sustainability and more time to train the local workers.

Crops

Coronavirus May Cost Africa Billions In Crop Exports

Bloomberg reports that up to 10 million farmers could be affected by the impact on Coronavirus and the slowdown of the global economy, which could cost Africa $4.8 billion in lost revenue in the exportation of products, especially cash crops.

Specifically, McKinsey & Company proclaimed that the global trade had been affected by the cancellation of flights, disruptions at ports, closures of factories, and loss of jobs in most of the destination countries. Meanwhile, producing countries are harvesting crops that would typically be shipped or airlifted, including flowers, cocoa beans, nuts, coffee, and fruit. Agricultural exports from Africa are estimated to be worth between $35 billion to $40 billion per year.

The McKinsey report forecasted that between $500 million and $2 billion in export revenue of fruit, vegetables, and nuts from countries including South Africa and Kenya. For cocoa exporting countries including Ghana and Ivory Coast, McKinsey estimates a decline in cocoa beans exports by as much as $2 billion, as well, a decrease in coffee exports for East Africa of up to $200 million and $600 million for flower exports from countries such as Kenya.

Shipping Industry Warns Of Trade Logjam As Crews Remain Stranded

Bloomberg reports that up to 10 million farmers could be affected by the impact on Coronavirus and the slowdown of the global economy, which could cost Africa $4.8 billion in lost revenue in the exportation of products, especially cash crops.

The global trade industry is at a point of restarting, and as expected, there remain several bottlenecks within the supply chains. Reportingly, 80% of world trade by volume is through maritime transport, including container vessels, fuel tankers, and dry bulk carriers. Challenges are emerging, as crews are unable to end their voyages as per their agreements or their home countries implemented travel restrictions.

The Financial Times reports that the shipping industry is calling on governments to support their efforts in managing the arrival and departures of the sea workers. They are doing so by categorizing them as crucial workers, allowing proper entrance documentation, creating safe areas at airports for their transit, and fast-tracking their movements. The estimated 1.8 million sea workers crew the world 96,000 commercial vessels.

The International Transport Workers’ Federation has stated that after June 16th, the labor agreement could no longer be extended in an attempt for workers to remain at sea beyond their current contracts.

Cargo

Ian Taylor, CEO and Chairman of Vitol Group

The former CEO and Chairman of Vitol Group Ian Taylor has died at 64. Taylor is credited for building Vitol from a small Dutch fuel merchant into the world’s largest independent oil trader, trading eight million barrels per day. He was known to be a risk-taker with billions of dollars of trades with Kazakhstan and even getting approval from the British government to supply refined oil to the opposition in Benghazi, Libya, in exchange for crude supplies after the fall of Muammar Gaddafi. Taylor has been described as “exceptional” by Russell Hardy, his successor at Vitol and “one of the last of the pioneers that helped transform the oil trading industry,” according to Ivan Glasenberg of Glencore.

Interested in advertising with us?

Please contact us at advertising@panxchange.com

Do you have any news that you would like to share?

Please send to  rluwero@panxchange.com or elopez@panxchange.com

-Editors, Ronnie Luwero and Elena Lopez Del Carril