Yes, I'm still at work...now in shanghai where we enter tomorrow (26 Nov 07), the world of SeaTrans 2007. We essentially decided to consolidate three events to create one larger event that offers both common streams and issues, focused content and the chance to network.
This time we have Bunkering, Dry Bulk and the container port and shipping sectors in view...all important from a china perspective and all offering a nice mix of content and exposure that everyone should enjoy.
I do hope we can build this up...at a time when everyone is jumping on the shipping conference bandwagon - we need to stay ahead and I hope the people like it..better still give me new ideas n additions and adjustments we can make so that we can deliver a better event off the base we now have.
In short 2007's agenda is about:
- rising cost of bunkers and what this means to you (I guess in short, Dry Bulk guys remain happy, tanker operators are crying and container shipping is also on their knees with the impact of higher bunker costs representing something like 40-60% of operating cost...perhaps we should move away from the residual fuel model...but then that too would open up new issues
- Dry Bulk shipping has been the darlings of the business, with rates as historic highs...then the issues here are more about fatigue, overuse and the care needed to ensure these working assets are able to maximise income at a time all owners descrive as well beyond most imagination - my own feel...the secret lies in port congestion and the possibility that new ships coming on stream
could be left crewless...and hence unable to add badly needed tonnage to the market
- Ports and the Container industry...China is factory to the world..so the Asia-Europe and US Trades are booming..but that story has been about for a long time already...the new part is China's growth, Asia rise and the demand for ports and shipping on the back haul - as Asians demand for more luxury and quality products.
On thing is for sure, China is and will be an important feature, in trade and since some 98% of world trade is via ships...shipping will take on a strong Chinese (Asian) influence.
Once this week is done...my thoughts will move to coffee..another commodity on price acendancy, and yet another product that has its future in Asia...and maybe the Middle East and Russian Far East. Anyway we will be in Vietnam...Asia's largest coffee exporter and the world No.2...so numbers from there will shape price and markets. Lets see.
Sunday, November 25, 2007
Sunday, November 4, 2007
Next Up- Lloyd's List Shipping Leaders Summit 2007
In two weeks I'm changing focus, from rice to shipping...better still with the elites in shipping. So if you are wondering why dry bulk markets fell last week, or how oil prices will affect global shipping (tankers, bunker costs or to put it simply costs overall) and want to understand the fundamentals in shipping and what CEOs are thinking (better still what they are doing)...this is it. 15th November 2007 at the Kowloon Shangri-La Hotel in Hong Kong.
Bonus - if you are a networker like me, you will also enjoy the evening cocktails the the Lloyd's List Asia Awards that takes place immediately after the seminar.
What will we look at?
firstly the seminar is done on a dialogue style - so less emphasis on powerpoint presentation and more emphasis on off -the-cuff (albeit most is prepared) discussions and the chance for audience interaction.
The issues:
- shipping cycles and if they are still relevant
- increased use of capital markets as vessel prices rise
- cargo is moved by people - human resources needed to fuel shipping (tons of issues as the global fleet grows and grows and companies struggle to fine seafarere and senior officers to work these vessels)
- free trade and ports will also be in focus as it appears that growth in the ship population alone ends up only with congestion - so port developments and the logistics infrastructure is also key
Shipping is now 40% or more Asian owned and certainly fueled by Asian demand - so I am quite excited at the prospect of meeting and discussing the industry concerns with people who have not just risen to gain from the current boom, I would say these are the guys who have been consistent - they survived the lows of shipping and have a proven record of not just survival, but excellence.
One more item not to be missed - the new generation of shipowners...and we have Sabrina Chao on board to give us a peek of what's in store.
The world is seemingly complex but when we anlyse the success stories, the simplicity of the reasoning implies that "vision" is the trick, vision that helps simplify the situation to allow clarity in looking at the opportunities on the road ahead.
I'm excited and quite looking forward to the trip....also because shipping was an area of concern at our rice event last week.
Bonus - if you are a networker like me, you will also enjoy the evening cocktails the the Lloyd's List Asia Awards that takes place immediately after the seminar.
What will we look at?
firstly the seminar is done on a dialogue style - so less emphasis on powerpoint presentation and more emphasis on off -the-cuff (albeit most is prepared) discussions and the chance for audience interaction.
The issues:
- shipping cycles and if they are still relevant
- increased use of capital markets as vessel prices rise
- cargo is moved by people - human resources needed to fuel shipping (tons of issues as the global fleet grows and grows and companies struggle to fine seafarere and senior officers to work these vessels)
- free trade and ports will also be in focus as it appears that growth in the ship population alone ends up only with congestion - so port developments and the logistics infrastructure is also key
Shipping is now 40% or more Asian owned and certainly fueled by Asian demand - so I am quite excited at the prospect of meeting and discussing the industry concerns with people who have not just risen to gain from the current boom, I would say these are the guys who have been consistent - they survived the lows of shipping and have a proven record of not just survival, but excellence.
One more item not to be missed - the new generation of shipowners...and we have Sabrina Chao on board to give us a peek of what's in store.
The world is seemingly complex but when we anlyse the success stories, the simplicity of the reasoning implies that "vision" is the trick, vision that helps simplify the situation to allow clarity in looking at the opportunities on the road ahead.
I'm excited and quite looking forward to the trip....also because shipping was an area of concern at our rice event last week.
Saturday, November 3, 2007
Scarcity & Choice - two rules, especially in rice
Just back from Bali. Expected a sweet journey, but ended up with a lot of news, and with business also taking its tol. The event also revealed the achilles heel of the rice industry by exposing the "denial" that the industry was going through as falling stocks and challenges in keeping supply up finally impacted on price.
Also interesting were :
- Rice as a comparison against other cereals (wheat especially since it rose 2-3 times its price)
- the Falling US Dollar and its impact
- Freight markets at historice highs (add the ageing handysize fleet, the lack on newbuildings in handies and the problem is elevated further)
- Price movements in the more niche markets of basmati and japonica offering a more dramatic price impact compared to the broader markets
- reluctance by exporters to committ to new trades (they weren't sure of price to offer rice at or simply decided to hold on to stocks for future price gains!)
October 9, 2007 was a landmark date in the global rice industry when everyone sitting with low stocks and some blindingly obvious signs suggesting isssues in supply availability.
Australia - almost obliterated from markets as a supplier (and possibly facing longer term issues if they are to return
China -also see the stock situation and food security creep into the system. Is their 220,000 capacity par boil plant the solution for African buyers concerned about future availability
Brokens - we hear they are as expensive as 5%..certainly close
Basmati - at 1200 $ per tonne, is double on the back onf EU and Middle East demand
USA - not any different, falling acreage, water issues in California = not a likely canditate to take up any short supply in the market
I did however hear of more land in Africa going into grains (rice) production, but even then, what this is likeyt to do is to minimise Africa's import growth rather than stall or reduce imports.
The fear is...can demand remain inelastic to price? Are the poor people of Asia and Africa able to afford rice? So far the problem seems that rice is the cheaper amogst cereals..but I suspect that there is a limit to how far further rice can rise - politics in the form of food security will or at least should place a cap on price rises.
But...if every government were to "panic" as India did (to me India had no choice - either buy more expensive imported wheat or place this ban and hope that consumers switch to rice..just a thought)....imagine what would happen.
the fact is - wheat has become 3x more expensive this year (well..at least twice) - rice has only been slowly rising in price (some folks in the EU may not even notice the difference once you take the falling dollar into account), and the Oct 9th incident has only reinforced the industry's concern or I would say the industry's refusal to accept facts has finally been challenged.
The result - rice prices will be higher but also more volatile.
Suddenly you have all exporters "dreaming" of what price they can get...but be warned, when you go in search of peaks and looking to time your decisions, things can go wrong..exporters may perhaps prefer to be in control of theie supply chain, manage freight and concentrate on their role as a supplier of choice, once who can be counted on (ie minimize, better still - no defaults), and work on making this opportunity and occasion to build business, even brand both in trade and at consumer levels and the foundations for the long terms where the controlling factor will be value.
On that note let me check out.. there are some serious concerns that I will keep watching while I complete the rest of the year where I will look more at shipping and then end the year with our annual coffee conference.
Also interesting were :
- Rice as a comparison against other cereals (wheat especially since it rose 2-3 times its price)
- the Falling US Dollar and its impact
- Freight markets at historice highs (add the ageing handysize fleet, the lack on newbuildings in handies and the problem is elevated further)
- Price movements in the more niche markets of basmati and japonica offering a more dramatic price impact compared to the broader markets
- reluctance by exporters to committ to new trades (they weren't sure of price to offer rice at or simply decided to hold on to stocks for future price gains!)
October 9, 2007 was a landmark date in the global rice industry when everyone sitting with low stocks and some blindingly obvious signs suggesting isssues in supply availability.
Australia - almost obliterated from markets as a supplier (and possibly facing longer term issues if they are to return
China -also see the stock situation and food security creep into the system. Is their 220,000 capacity par boil plant the solution for African buyers concerned about future availability
Brokens - we hear they are as expensive as 5%..certainly close
Basmati - at 1200 $ per tonne, is double on the back onf EU and Middle East demand
USA - not any different, falling acreage, water issues in California = not a likely canditate to take up any short supply in the market
I did however hear of more land in Africa going into grains (rice) production, but even then, what this is likeyt to do is to minimise Africa's import growth rather than stall or reduce imports.
The fear is...can demand remain inelastic to price? Are the poor people of Asia and Africa able to afford rice? So far the problem seems that rice is the cheaper amogst cereals..but I suspect that there is a limit to how far further rice can rise - politics in the form of food security will or at least should place a cap on price rises.
But...if every government were to "panic" as India did (to me India had no choice - either buy more expensive imported wheat or place this ban and hope that consumers switch to rice..just a thought)....imagine what would happen.
the fact is - wheat has become 3x more expensive this year (well..at least twice) - rice has only been slowly rising in price (some folks in the EU may not even notice the difference once you take the falling dollar into account), and the Oct 9th incident has only reinforced the industry's concern or I would say the industry's refusal to accept facts has finally been challenged.
The result - rice prices will be higher but also more volatile.
Suddenly you have all exporters "dreaming" of what price they can get...but be warned, when you go in search of peaks and looking to time your decisions, things can go wrong..exporters may perhaps prefer to be in control of theie supply chain, manage freight and concentrate on their role as a supplier of choice, once who can be counted on (ie minimize, better still - no defaults), and work on making this opportunity and occasion to build business, even brand both in trade and at consumer levels and the foundations for the long terms where the controlling factor will be value.
On that note let me check out.. there are some serious concerns that I will keep watching while I complete the rest of the year where I will look more at shipping and then end the year with our annual coffee conference.
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