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2020 proved to be a challenging year for many, with the impact
of the coronavirus pandemic causing a variety of issues; from
reductions in trade in the initial months of the year, to port
congestion as the wheels of industry began spinning again. Despite
the hardships faced by industry, it is difficult as such to imagine
that certain products in industry thrived in the face of the
pandemic.
For instance, a review of the United States export trade of skim
milk powder or SMP (HS 040210), for calendar year shows a
resounding increase of 22.29% in trade between 2019 and 2020,
coming in at just slightly over $2 billion. This increase is made
all the more impressive by the fact that the price per ton
increased as well, at a healthy 5.22% so those in the industry were
not only able to export larger volumes but were also able to do so
at for a better price.
Driving this increase in export activity was an equally strong
demand in Asia, with six of the top ten U.S. markets being in
Asia.
Source: IHS Markit Global Trade Analytics Suite
Source: IHS Markit Global Trade Analytics Suite
A closer look at the Asia markets shows that the increase in
demand for U.S. SMP is possibly a result of supplier
diversification, as a weakening of imports from Europe can be
observed over 2020, where many of the formerly strongest suppliers
are now seeing double digit percentage drops in imports for markets
like the Philippines.
Source: IHS Markit Global Trade Analytics Suite
Source: IHS Markit Global Trade Analytics Suite
This shift to imports from the U.S. over the European suppliers
is mainly driven by how the price for U.S. SMP is lower even with
the increases in price per ton.
Source: IHS Markit Global Trade Analytics Suite
This marked increase in the Philippines imports of SMP belies
the expectation of forecasts which had predicted a contraction of
their imports and then a steady growth over the next few years.
Source: IHS Markit Global Trade Analytics Suite
This unforeseen growth has created opportunities for producers
like Darigold, Land O' Lakes, & Dairy Farmers of America to
export into this new and growing market.
Source: IHS Markit Global Trade Analytics Suite
If the past year has highlighted anything, it is that the
marketplace is a constantly changing landscape, one that requires
companies to have the best tools and insights to allow them to stay
competitive. Data without analysis won't be sufficient in the face
of shifting supply chains or price volatility and only the type of
analysis that takes into account both market and supplier
perspectives, allows for the tracking and comparison of pricing,
gives insight into the companies involved, all while keeping an eye
on what the future holds through market forecasting will position
companies to take advantage of opportunities when they arise. This
kind of analysis is hard won using a combination of trustworthy
data and years of experience and industry knowledge, both of which
can be hard to come by, but IHS Markit has leveraged both in the
creation of its Global Trade Analytics Suite (GTAS) that provides
users the agility to gain decision ready intelligence built on a
foundation of trusted data.
