This provides a condensed update on the current COVID-19 situation, state of the carrageenan market, and supply chain conditions.
CARRAGEENAN MARKET
- The pandemic has made consumers recognize that wellbeing is a vital concern. According to Mintel’s latest Global Food and Drink Trends for 2021, consumers look for more functional food and drink that claim to help people focus, relax, and relieve (or ideally prevent) emotional health concerns.
- As markets reopen after COVID-19 restrictions, the pace of life will get busier—requiring more convenience options. Consumers look for foodservice inspired options for quick meals as well as approachable upmarket solutions for special ‘hometainment’
OPERATIONS
- Throughout the ongoing COVID-19 situation we have continually monitored and implemented the government and World Health Organization (WHO) recommendations, and taken steps to ensure we have been in line with these at all times while ensuring continuity of supply to our customers.
- We want to reassure our clients and partners that we remain fully operational and continues to provide food ingredients for all of our clients because of our established agile operational guidelines.
INVENTORY
- Our raw materials and stock availability continue to be unaffected; they remain strong and sufficient to meet the demands of the market.
- As part of our ongoing commitment to ensure supply for our valued customers, we made advance bookings on our critical materials considering that many suppliers will begin slowing down or stopping production a week or so before the Chinese New Year holiday.
LOGISTICS
- We continue to expect high shipping rates due to the ongoing global logistics challenges. According to Kuenhe + Nagel, forwarder rates will still increase due to the current shortage in containers, congestion in ports, reduced number of operational vessels, and the disruption in the flow of goods because of the COVID-19 pandemic.
- To mitigate delays and facilitate timely supply, we are continuously engaging with our suppliers to monitor progress and we are working with all available resources to implement changes where possible.
PHILIPPINE ECONOMY
- The gradual easing of COVID-19 quarantine measures likely narrowed gross domestic product (GDP) contraction in the fourth quarter of last year to single-digit, but this would not stop the Philippine economy from sliding to its worst post-war recession in 2020, according to the global economic research firm Morgan Stanley Research. In a January 20 report, they projected a 6 percent year-on-year decline in fourth-quarter GDP, a slower drop than the average of 10 percent recorded in the first nine months of last year.
- Local borrowing rates will remain low for the foreseeable future to boost economic growth after being savaged by the coronavirus pandemic last year, according to the Central Bank of the Philippines. Deputy Governor Francisco Dakila Jr. said last year’s aggressive moves by the regulator to pump trillions of cash into the financial system had also met with some success as there were now emerging “encouraging signs of recovery.”
MISCELLANEOUS
- The global economy is expected to expand 4 percent in 2021, assuming an initial COVID-19 vaccine rollout becomes widespread throughout the year. A recovery, however, will likely be subdued, unless policymakers move decisively to tame the pandemic and implement investment-enhancing reforms, the World Bank says in its January 2021 Global Economic Prospects.
- The global economy is on the verge of a “great rebound” and will grow by around 5 percent this year. That’s one of the predictions made in the PwC report Global economy watch: Predictions for 2021 which also forecasts that some of the world’s largest economies may struggle to return to pre-pandemic levels by the end of the year, signaling that the growth and recovery we may see are unlikely to be evenly distributed.