Q3
EDITOR’S NOTE Q3 EDITION
Digitalization, Inflation, War, Sugar, Brazil, India, Oilseeds, Black Sea, Carbon Tax, Shipping, Containers, Energy Crisis, Germany, Europe
Welcome to the latest edition of the Ghost In The Machine, as another tumultuous year draws to a close, and the tragic and terrible war in Ukraine, numerous geopolitical tensions, the energy crisis, and central bank efforts to rein in inflation via aggressive rate hikes serve to heighten uncertainty, and raise the risk of recession.
The pandemic, the enormous current economic turbulence and accompanying cost pressures have spurred many companies, above all those in the commodity and energy sectors, into fast tracking digitalization projects both to save costs and to gain a competitive edge, we take a deeper dive into the potential benefits, and highlight the key distinction between ‘digitization’ and ‘digitalization’.
Covid-19 made us that much more aware of how important shipping is to the smooth functioning of the global economy, and now with the move to decarbonize the sector moving into centre stage, there are very real risks from not moving fast enough on ‘carbon tax’ to accelerate the shipping transition. Shipping container availability and pricing is a key driver of inflation, often serving as a key leading indicator of future price trends.
The disruption from the war in Ukraine has focussed on grains supply, above all wheat, and rather less on oilseeds, despite the importance of the Black Sea region in export terms, so what has been the impact and what are the prospects. There is also a closer look at potential for the emerging ‘cultured cooking oils’ sector.
What are the prospects for the sugar market in the 2022/23 season, above all in Brazil and India, with a good deal of uncertainty around energy related demand, and potential changes to government policy following Lula’s election victory.
The immediate focus in terms of Europe’s energy crisis is how it will navigate the winter season, but German industry is facing major challenges in the longer term in terms of its competitiveness, is there a risk of ‘Japanification’?
THE GHOST IN THE MACHINE
EDITORS IN CHIEF Eddie Tofpik
E:
eddie.tofpik@
admisi.com Marc Ostwald
E:
marc.ostwald@admisi.com
PRODUCTION & CIRCULATION CREATIVE DESIGN Alfred Michelin
MARKETING Alfred Michelin
Simrat Kaur Sounthe
ADM CONTRIBUTORS Dominic Enston Eddie Tofpik
Howard Jenkins Marc Ostwald
EXTERNAL CONTRIBUTORS Alberto Peixoto Ian Murrin Lou Brien
Voytek Chelkowski
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ADM Investor Services International Limited, registered in England No. 2547805, is authorised and regulated by the Financial Conduct Authority [FRN 148474] and is a member of the London Stock Exchange. Registered office: 3rd Floor, The Minster Building, 21 Mincing Lane, London EC3R 7AG. A subsidiary of Archer Daniels Midland Company. The information within this publication has been compiled for general purposes only. Although every attempt has been made to ensure the accuracy of the information, ADM Investor Services International Limited (ADMISI) assumes no responsibility for any errors or omissions and will not update it. The views in this publication reflect solely those of the authors and not necessarily those of ADMISI or its affiliated institutions. This publication and information herein should not be considered investment advice nor an offer to sell or an invitation to invest in any products mentioned by ADMISI. © 2021 ADM Investor Services International Limited.
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