The Supply Chain Daily provides a curated overview of Panjiva's research and insights covering global trade policy, the logistics sector and industrial supply chains and draws from global shipping and freight data.

Food supply disruptions during COVID-19 — 3 issues to watch
The global food supply chain runs smoothly most of the time, ensuring the right products get to the right places in a timely manner. The COVID-19 pandemic has caused disruptions; this report considers three issues.

First, food protectionism has emerged, though it is not as bad as that seen in medical supplies. The World Bank has identified 40 measures restricting food exports since the start of the year, though around half have already been withdrawn. Grain export restrictions in Ukraine and the Eurasian Economic Union could disrupt 17.2% of global grain supplies based on 2018 data, though only a subset of products are affected so far. Grain stockpiling by China may price poorer countries out of the market.

Second, physical disruptions to supply chains are becoming widespread. Meatpacking has been particularly affected due to the labor-intensive processes involved. Brazil's beef exports have been robust despite plant closures with a 0.4% rise in March compared to a year earlier, though shipments by JBS SA and Minerva SA have slumped. Shortages of farm hands, fertilizer flows and logistics infrastructure are also challenges.

Finally, regulatory risks are acting as a force multiplier for COVID-19 disruptions. The U.S.-China trade deal should lead to prioritized flows from the U.S. to China, but those have yet to occur for many products. U.S. seaborne pork exports have continued to expand with a 189.8% rise in April compared to a year earlier.

There has been a divergence in the performance of exporters with WH Group Ltd.'s exports having slipped 8.7% while Tyson Foods Inc.'s surged 45.6% higher. A collapse of the phase one trade deal could lead to further disruptions.

(Panjiva Research - Agriculture)

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Under Armour's inventories surge as COVID-19 hits both demand and supply
Under Armour Inc. has reported a 23% year-over-year drop in revenues in the first quarter, with CEO Patrik Fisk stating "not only are there meaningful shifts in demand, but we're also seeing significant swings in supply due to factory closures" due to COVID-19. The firm expects second-quarter revenues to fall by 50% to 60%.

Panjiva's data shows U.S. seaborne imports linked to the firm surged 25.9% higher in the first quarter compared to a year earlier, partly explaining the 7.4% rise in inventories despite the drop in sales.

Under Armour has cut back its imports in April with shipments down by 6.5%. That is slower than its peers though. Shipments linked to adidas AG meanwhile dropped by 23.4% while Berkshire Hathaway Inc.'s Brooks Sports-related shipments fell by 28.4%.

(Panjiva Research - Consumer Discretionary)

Panjiva Insights: Supplying a locked down world — the impact of COVID-19 on LatAm
Panjiva Research joined a webinar with our colleagues from across S&P Global on May 12 to consider the impact of COVID-19 on Latin American economies, energy, supply chains and the finance sector. This report provides a link to the materials and an outline of the questions asked.

A poll of the audience, drawn mostly from the financial sector in the region, asked which country will have the weakest economic recovery from the pandemic. Mexico led the choices with 41.2% of the responses while Brazil had 39.4%. Regional exports are characterized by a high reliance on single product groups — for example 30.0% of Brazil's exports are agricultural, 55.0% of Chile's are metals while Mexico is mostly reliant on manufacturing and autos.

A second poll of the audience asked which supply chains would be most impacted by COVID-19. Autos were identified as the most impacted by 31.4% of the respondents. There are concerns about spreading protectionism in the wake of the pandemic, though it is worth noting there have been significant new trade deals agreed in the region in recent years.

Global medical export protectionism is a threat for the region, though Brazil's pharmaceutical imports have continued to expand with a 7.9% year-over-year increase in March.

Th automotive industry in the region has faced the dual challenges of falling sales and component manufacturing disruption. A bigger challenge though will be the enactment of USMCA, which may restructure parts sourcing into Mexico.

Mexico's imports of auto parts from the U.S. and Canada already rose by 13.7% year over year in the first quarter while those from Latin America and Europe fell by 1.9% and 3.4%, respectively.

(Panjiva Research - Policy)

Brexit Watch: Britain gets a taste of 2021 as medical supply imports slump
Britain's international merchandise trade slumped 17.3% year over year in March, the fastest since May 2009, as COVID-19 restrictions took a toll on both demand and supply chains. That included a 23.6% slump in trade with the EU, in part due to shorter supply chains and earlier industrial activity closures.

Negotiations to put in place a new trade and customs deal for the current post-Brexit withdrawal period in 2021 are underway, but may be stuck on a number of topics including fisheries, regulatory standards and court jurisdictions. There are only a few weeks left to agree a deal or for the U.K. to request an extension.

A taste of what may be ahead can be seen in U.K. imports of pharmaceuticals and medical supplies from the EU which fell by 43.1% year over year in March. While last year's figures were inflated by pre-Brexit stockpiling, an EU scheme to restrict exports and ensure intra-EU supply freedom may also have taken a toll.

(Panjiva Research - Policy)

US port slowdown proves uneven, Norfolk falls behind
U.S. port operators are facing challenges from lower shipping activity during the coronavirus pandemic. That has led the Federal Maritime Commission to call for congressional support for the sector, while at least two ports have requested state aid. U.S. seaborne imports of containerized freight only fell by 5.1% year over year in April, though a further decline is likely given statements from the container-shipping lines regarding their capacity plans.

On the West Coast, imports to Los Angeles stabilized with a 0.1% rise in April compared to a year earlier. In the east, volumes shipped to Newark/New York actually rose by 6.3% year over year.

Yet, Norfolk saw a 19.3% slide in traffic, vindicating an earlier decision to rationalize capacity. A 30.1% slump in imports shipped by Hapag-Lloyd AG and Ocean Network Express Pte. Ltd. was the main reason for Norfolk's fall.

(Panjiva Research - Logistics)

Christopher Rogers is a senior researcher at Panjiva, a business line of S&P Global Market Intelligence, a division of S&P Global Inc. This content does not constitute investment advice, and the views and opinions expressed in this piece are those of the author and do not necessarily represent the views of S&P Global Market Intelligence.

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