This provides a condensed update on the current COVID-19 situation, state of the carrageenan market, and supply chain conditions.

CARRAGEENAN MARKET

• COVID-19 has changed the way consumers shop, but perhaps nothing more than the normal weekly or even daily trips to the grocery store.
• At the height of the pandemic, the U.S. Department of Homeland Security suggested that all Americans purchase enough food to last for two weeks at a time to keep grocery stores from becoming packed, decrease the risk of individual exposure, and ensure an adequate food supply at home.
• Recently, 47% of consumers reported stocking up on essential items like food and water. As the pandemic continues, with many restrictions still in place, food conservation and shelf stability are even more important.
• Food ingredients, including food additives, play key roles in increasing the shelf lives of many foods, making them even more important when stocking up on foods that will last during the pandemic.

OPERATIONS

• W Hydrocolloids keeps employing stringent health and safety measures to prevent the spread of COVID-19 while continuing to take steps to maintain full operations.
• All our production locations and warehouses continue to maintain operations while continuing to work closely with our customers, suppliers, and value chain partners to proactively manage supply chain risks.

INVENTORY

• As a leading provider of food ingredients essential to the food supply in times like this, we have prioritized a series of mitigating actions to reduce the risk of potential supply chain disruptions.
• We are also encouraging our value chain partners to reach out to us proactively to refine these mitigating actions.

LOGISTICS

• Even though the World Container Freight Index is slightly decreasing, the composite index decreased 0.2%, which is far from the normal average. It remains 232.4% higher compared with the same period of 2020. Please see the updated Drewry World Container Index as of Feb 25.
• On-ground, the Container Availability Index (CAx) is gradually increasing though it slipped on week 7 of 2021 as Chinese factories remained open to meet demands. See the latest CAx from Container-Exchange here.

PHILIPPINE ECONOMY

• The Philippine economy was projected to grow at a slower pace in the first quarter of 2021, compared to an increase in output in the fourth quarter of 2020, as a result of a decision to keep in place current COVID-19 quarantine restrictions until an elusive mass vaccination is rolled out according to Socioeconomic Planning Secretary Karl Kendrick Chua of Philippine National Economic and Development Authority (NEDA).
• The further reopening of the local economy and easing of quarantine level to modified general community quarantine (MGCQ) nationwide in the coming months are expected to further lift the manufacturing sector. This, after Markit’s manufacturing Purchasing Managers Index (PMI) for the Philippines, remains steady at 52.5 in the second month this year.

MISCELLANEOUS

• Countries around the world could boost their prospects of economic recovery from COVID-19 by reducing restrictive maritime trade policies, the International Chamber of Shipping (ICS) has found. An ICS report, entitled ‘Protectionism in Maritime Economies’ and co-authored with Professor Craig Van Grasstek of the Harvard Kennedy School of Government, found that reducing trade protectionism could see GDP gains for national economies increase by up to 3.4%.
• Although recent vaccine approvals have raised hopes of a turnaround in the pandemic later this year, renewed waves and new variants of the virus pose concerns for the outlook. Amid exceptional uncertainty, the global economy is projected to grow 5.5% in 2021 and 4.2% in 2022 according to the recent World Economic Outlook Update from International Monetary Fund (IMF). The 2021 forecast is revised up 0.3% relative to the previous forecast, reflecting expectations of a vaccine-powered strengthening of activity later in the year and additional policy support in a few large economies.