September 1st, 2010
Louisiana lobbies for monitoring and marketing its seafood
Louisiana Department of Wildlife and Fisheries (LDWF) biologists are reported to be collecting thousands of specimens of crab, shrimp and finfish in the waters east of the Mississippi Delta for Food and Drug Administration (FDA) and National Oceanic and Atmospheric Administration (NOAA) testing and analysis that, hopefully, will support a conclusion that the area is safe from hydrocarbons and dispersants released following the Deepwater Horizon oil spill — and a decision to reopen waters now closed to commercial fishing.
At the same time, the seafood industry and state leaders continue to fight for a long-term testing-and-monitoring program that could last up to 20 years, paired with a nationwide marketing campaign to promote local seafood, says the Daily Comet.com of Lafourche Parish. Urging decades of special precautions while promoting care-free consumption here and now could be tricky. In pressing its case that the spill’s damage to its fisheries merits considerable compensation, Louisiana risks warning off seafood consumers.
Meanwhile, the Fort Worth Star-Telegram tells us Louisiana oysters and shrimp are back on the menu (at the higher prices that inevitably follow short supplies). The problem is getting the word out and the customers in. Tommy Cvitanovich, owner of New Orleans’ Drago’s Seafood Restaurant, told the American Statesman, “The biggest challenge we have is telling people we have oysters. Since Katrina, we’ve only had three shifts with no oysters. And they’re healthy. This is the most scrutinized seafood in the U.S.”
Update 9/3/10: The NOAA announced it has reopened 3,114 square miles of Gulf waters offshore of the western Florida panhandle to commercial and recreational fishing after fish caught in the area and tested by NOAA showed no signs of contamination. This is in addition to 5,130 square miles reopened yesterday. The closed area now covers 39,855 square miles or about 17% of federal waters in the Gulf, down from 37% at the height of the closure on June 2.
Tags: crab, Drago's Seafood Restaurant, FDA, Food and Drug Administration, Gulf fishing ban, Louisiana, National Oceanic and Atmospheric Administration, NOAA, oysters, seafood, shrimp
Posted in Exports, Imports, Markets | No Comments »
August 31st, 2010
BHP bid signals realignment in global N-P-K sector
It’s a pretty safe bet: As the world’s population increases, so too will demand for food. That makes fertilizer – and its three primary ingredients nitrogen (N), phosphate (phosphorus or P) and potash (potassium or K) – a high-growth industry. [See related “From Few to Many” on global trade in potash.]
Over the long-term, that is. In the year-and-a-half just past, fertilizer sales overall have been flat, a victim of a spike in pricing, global recession and local weather conditions. According to the International Fertilizer Industry Association, farmers have been reducing or postponing investment in agricultural inputs. Since demand for seeds and N fertilizer is relatively inelastic, the big cutbacks have been in P and K fertilizers and in crop protection products. The IFA estimates that world consumption of P dropped 11%, while K use was down 20% in 2008-09.
Now the IFA forecasts a rebound, with demand for hardest hit K forecast to grow 18% in 2010-11. But the recession has set the stage for realignment and very likely consolidation within the sector.
During the downturn, shares of Potash Corp. of Saskatchewan Inc., the world’s largest fertilizer company by capacity and its leading producer of potash, took a tumble – making it a take-over target for Melbourne-headquartered BHP Billiton, a multinational with diversification plans that include achieving “an immediate leadership platform in the global fertilizer industry.”
The PotashCorp board rejected BHP’s unsolicited bid and is said to be in talks with alternate suitors, including Rio Tinto, a British-Australian mining company, and the state-owned Sinochem Group of China. One potential bidder, Brazil’s Vale, has said it’s not interested and announced it will invest $12 billion by 2014 to become the world’s second-largest phosphate and potash producer. Last week a consortium led by Chinese private-equity fund Hopu Investment Management Co. was reported to be looking into the feasibility of a bid.
Meanwhile, Russia’s antitrust watchdog says that country’s two largest potash producers, OAO Uralkali and OAO Silvinit may be allowed to merge into a national monopoly. At the same time, Rio Tinto and PotashCorp are each seeking to buy a 10-to-15% share of Uralkali.
Clearly, these are just the opening moves in a realignment of suppliers of a critical resource. Nor will potash be the only piece of N-P-K in play. BHP has already said that, should it acquire PotashCorp it will likely sell off its nitrogen and phosphates businesses.
Tags: BHP Billiton, fertilizers, Hopu, IFA, International Fertilizer Association, N-P-K, nitrogen, phospate, potash, Potash Corp of Saskatchewan, PotashCorp, potassium, Rio Tinto, Silvinit, Sinchem Group, Uralkali, Vale
Posted in Exports, Imports, Markets | 1 Comment »
August 31st, 2010
Approximately 80% of world potash is traded across borders
Every farmer needs it, but there are few producers of potash, one of the three essential components of fertilizer (the other two are nitrogen and phosphate). According to Potash Corp. of Saskatchewan Inc., production is concentrated in Canada and the former Soviet Union (FSU) countries of Russia and Belarus while some 160 countries are consumers. [PotashCorp, the world’s largest potash producer, is currently the target of a takeover bid: see the related “Tug of War over PotashCorp.”]
The Food and Agriculture Organization (FAO) of the United Nations issued its world fertilizer outlook to 2012 in 2008, so its projections don’t take into account the unprecedented decline in demand during the global recession. But the FAO estimate of regional contributions to its forecast 2.4% annual growth rate in potash consumption provides a fair picture of where demand will be.
Data on potash from such sources as the International Fertilizer Association provides additional insight on global supply and demand. For instance, IFA statistics (through 2005) indicate that just four countries – China, the U.S., Brazil, and India – account for about two-thirds of potash imports.
Note, however, that gross trade statistics don’t always distinguish between potash shipped for fertilizer and potash for industrial uses.
Datamyne U.S. import database can be searched for 10-digit Harmonized System Tariff (HST) codes. To search the top 5 U.S. sources of potash, we used six-digit HST codes 310420, 283421, and 310430 for the forms commonly used for fertilizers. Datamyne trade data for first-half 2010 shows that Canada is far and away the primary source for U.S. potash imports.
Datamyne’s bill-of-lading database provides the kind of fine detail needed for commercial applications, including commodity descriptions, shippers and consignees. The data is also current, capturing transactions as recent as two weeks ago. To learn more about how Datamyne can help track trade and identify trading partners in potash, fertilizers, or other chemicals, contact us.
Tags: Belarus, Brazil, Canada, China, FAO, fertilizers, Food and Agriculture Organization, IFA, India, International Fertilizer Association, potash, PotashCorp, potassium chloride, potassium nitrate, potassium sulfate, Russia, U.S.
Posted in Data Applications, Exports, Imports, Markets, Trade Data | No Comments »
August 21st, 2010
A U.S. federal court ruling is a global market changer
Global sugar supplies were already tightening because of the Russian drought, Pakistan’s floods, and weather delays at the ports of top exporter Brazil, when a potentially huge hit to U.S. stocks emerged from the U.S. District Court for the Northern District of California. On August 13, Judge Jeffrey S. White issued a ruling that effectively outlaws the planting of genetically modified sugar beets for the 2011-2012 growing season.
According to the U.S. Department of Agriculture (USDA), the genetically modified sugar beets, called “Roundup Ready” by creator Monsanto because they can withstand the weedkiller, account for about 95% of planted sugar area in the U.S. About half the nation’s sugar supply comes from sugar beets. The U.S. does not rely on homegrown sugar; it is, in fact, the second-ranked net importer of sugar (after Russia) in the world, according to USDA/FAS statistics.
The ruling is the result of a lawsuit brought by advocacy groups opposed to GMOs (genetically modified organisms) in the food supply, led by the Center for Food Safety and including the Organic Seed Alliance and the Sierra Club. The court decided that the USDA should have conducted an environmental review before the GMO sugar beets were deregulated in March 2005. The new ban can be lifted once the USDA conducts such a review, but that can take years to accomplish.
In the commodities markets, the price of sugar has risen on the promise of short supply/high demand for imports. On Thursday, at the behest of sugar users, the USDA lifted restrictions on sugar imports to avert a shortage. The August 19 USDA action extends the period during which sugar imports under the existing tariff-rate quota are permitted by moving the start date to September 1 (a month earlier than the usual October 1 start).
Longer term, the outlook is murky. Right now, U.S. growers warn that there are not enough old-fashioned, non-GMO sugar beet seeds on hand to produce any crop at all next year.
Datamyne can help you track global buyers and sellers of sugar, sugar beets (and seeds, for that matter) – down to the details of individual bills of lading. Ask us to show you how.
Tags: Center for Food Safety, genetically engineered crops, genetically modified organisms, GMO sugar beet ban, GMOs, Judge Jeffrey S. White ruling, Monsanto, Roundup Ready, sugar, sugar beet seed, sugar beets, U.S. Department of Agriculture, USDA
Posted in Imports, Indicators, Markets, Trade Policy | No Comments »
August 19th, 2010
Maersk pays $3 million for trading with Iran and Sudan
By Peter Quinter, guest columnist
Maersk Line, Ltd. paid the U.S. Office of Foreign Assets Control (OFAC) $3 million to settle allegations of violations of the U.S. trade embargo with Sudan and Iran that Maersk committed between 2003 and 2007. How the world’s largest ocean transportation company committed such violations is a good story. How Maersk’s lawyer was able to limit the payment to $3 million is also important to understand.
According to the OFAC Enforcement Information for July 28, 2010:
“OFAC’s investigation alleged that Maersk provided unlicensed shipping services for 4,714 shipments of cargo originating in or bound for Sudan and Iran. These services involved the transportation of such cargo on vessels owned, operated, and/or chartered by Maersk’s parent, A.P. Moller-Maersk A/S on at least one leg of the cargo’s journey to or from Sudan and Iran.”
This is very interestingly worded by OFAC. As A.P. Moller-Maersk A/S, a Danish conglomerate, is not bound by the U.S. laws regarding trade sanctions with Sudan and Iran, it could provide unrestricted vessels services in those countries. If, however, any part of the cargo to or from those countries were transported on a U.S.-flagged vessel, then a violation of the U.S. laws would occur. Cargo is often shifted from ship to ship between the port of departure and the port of delivery, and A.P. Moller-Maersk did not carefully trace the cargo from Sudan and Iran as well as it should have to prevent the cargo from touching a U.S.-flagged vessel.
Using OFAC’s Economic Sanction Enforcement Guidelines effective November 9, 2009, the penalty against Maersk could have been $61 million. Even though Maersk did not voluntarily self-disclosure the violations to OFAC, the settlement and payment of only $3 million reflects the mitigating factors of:
- the non-egregious nature of the violation;
- no violations by Maersk in the prior 5 years;
- substantial and effective remediation measures were implemented by Maersk; and
- substantial and full cooperation with OFAC officials during the investigation.
For non-U.S. based multinationals, compliance with U.S. trade laws and regulations enforced by OFAC and the export controls enforced by the Bureau of Industry and Security of the U.S. Department of Commerce is often confusing. Moreover, if the world’s largest, most sophisticated shipping company, and one with an excellent reputation for service and integrity, is doing business with Iran and Sudan, what does that say about the effectiveness of the U.S. sanctions and trade embargo programs?
Contact pquinter@becker-poliakoff.com or (954) 270-1864. Follow Quinter at his Customs & International Trade Law Blog.
Copyright © 2010, Becker & Poliakoff
About Peter Quinter
Peter Quinter is Chair of the Customs and International Trade Department of Becker & Poliakoff, P.A. He is Board Certified as an expert in International Law by the Florida Bar. His expertise includes providing advice and representation to persons and companies involved in the international supply chain, such as importers, exporters, customs brokers, and freight forwarders. He strategically counsels companies to prevent or resolve difficulties with United States Government law enforcement and regulatory agencies, especially the U.S. Customs and Border Protection (CBP), the U.S. Food and Drug Administration (FDA), and the Transportation Security Administration (TSA). He writes the Customs & International Trade Law Blog. Contact: pquinter@becker-poliakoff.com or (954) 270-1864.
Tags: A.P. Moller-Maersk A/S, compliance, Economic Sanction Enforcement Guidelines, embargo, Iran, Maersk, OFAC, Office of Foreign Assets Control, Peter Quinter, sanctions, Sudan
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August 13th, 2010
Cutting the cost of imported inputs should help U.S. producers compete on price
“Before U.S. companies are exporters, they are producers. And as producers of goods, they are consumers of capital equipment, raw materials, and other industrial inputs and components. Many of the inputs consumed by U.S. producers in their operations are either imported or the costs of the inputs are affected by imports,” Daniel Ikenson points out in his response to the Trade Promotion Coordinating Committee (TPCC) invitation to comment on U.S. export policy. [See more on the comments to TPCC here.]
Ikenson (who is affiliated with the Cato Institute but in this instance speaks only for himself) also notes that U.S. producers account for over half of the value of U.S. imports. During the recent recession, both the Mexican and Canadian governments cut tariffs across the board on industrial inputs and other products to spur domestic and export sales for its manufacturers.
Just so. On August 11, President Obama signed the United States Manufacturing Enhancement Act of 2010 suspending or reducing tariffs on a new list of imported manufacturing inputs through December 31, 2012. The Act also extends previous suspensions and reductions. (Specific inputs are listed in the Act.)
The National Association of Manufacturers says the Act will help create jobs, cut costs for businesses and consumers and boost U.S. exports. The industry trade group says studies show that the bill would increase production by $4.6 billion and support 90,000 jobs.
Tags: Daniel Ikenson, imported inputs, NAM, National Association of Manufacturers, President Obama, TPCC, Trade Promotion Coordinating Committee, U.S. competitiveness, U.S. producers, United States Manufacturing Enhancement Act of 2010
Posted in Exports, Imports, Trade Policy | Comments Off
August 13th, 2010
Commentators sound off on export policy at TPCC’s invitation
(As of August 13) 168 commentators responded to the Trade Promotion Coordinating Committee (TPCC) June 30th invitation to advise the federal government on what it should do to boost exports by filing statements online.
Having run our own informal survey on what keeps U.S. companies from exporting more, we were interested to find recurring themes: the need to simplify and streamline export controls, provide trade financing programs, approve pending free trade agreements (and negotiate new FTAs), improve transport infrastructure, and make the more effective export promotion programs (trade missions, the Gold Key Service, etc.) more accessible/affordable for small businesses. The 19-point list from the San Diego & Imperial District Export Council is fairly representative of recommendations on federal policy. (Other District Export Councils filed comments as well: Oklahoma, North Texas, North Carolina, Michigan, Illinois, National, California Inland Empire.)
Some 80 industry trade associations, chambers of commerce, and business coalitions contributed 73 statements (some trade associations filed joint statements). Naturally, the trade association comments provide a more detailed discussion of hot-button topics in their sectors.
The American Chemistry Council letter, for instance, takes up the issue of last year’s Customs & Border Protection (CBP) modification of a ruling letter (HQ 113129) which effectively overturned the 15-year practice of allowing the importation of containers containing the residues of previous cargoes without formal entry. The ACC also addresses the competitive disadvantages of current U.S. export controls.
The Packaging Machinery Manufacturers Institute (PMMI) discusses the unfair advantage enjoyed by EU companies subsidized by their national governments. The PMMI also suggests easing restrictions on issuing visas for foreigners who want to visit U.S. suppliers and trade shows and harmonizing U.S. standards with EN/ISO standards. The PMMI cautions against diverting U.S. Commercial Services resources to developing markets at the expense of mature European markets, the first outlet for many “new to export” companies among its members.
(We’ll take a look at more trade association commentary in the next few weeks.)
Five individuals (including one who anonymously appealed for more trade specialists to staff Commercial Services offices) weighed in. So did 48 companies. Ford Motor Company and Levi Strauss & Co. are among these. But smaller companies’ voices of (often painful) exporting experience also come through in comments from TowHaul Corporation (“Is there any way to negotiate strict patent controls for USA businesses who export to Countries with FREE TRADE Agreements?”) and Warren Distribution (“The limited availability of containers is ridiculous! We cannot afford the extra fees to get a local container!”) and others.
The Port of Vancouver filed a comment, as did the US West Coast Collaboration, representing the Los Angeles, Long Beach, Oakland, Portland, Seattle and Tacoma container ports.
Academia is also represented by five comments. The balance of filings came from governmental, quasi-governmental agency, and NGO entities whose mission it is to develop and promote export trade.
You can browse all the online comments here (check the box marked “Public Submissions” to load links to the individual comments).
Tags: ACC, American Chemistry Council, CBP, Customs & Border Protection, Ford Motor Company, Levi Strauss & Co, National Export Initiative, NEI, Packaging Machinery Manufacturers Institute, PMMI, Port of Vancouver, San Diego & Imperial District Export Council, TowHaul Corporation, TPCC, Trade Promotion Coordinating Committee, U.S. Commercial Services, U.S. exports, US West Coast Collaboration, Warren Distribution
Posted in Exports, Trade Policy | Comments Off
August 5th, 2010
Most cargo thefts occur in transit
By Bill Armbruster
What’s the annual cost of cargo theft in the U.S.? Estimates range from less than $2 billion to $30 billion. There are several reasons for that huge disparity. They include the lack of a national database and the use of different formulas for calculating losses. Some companies are reluctant to report cargo theft.
Whatever the actual figure, it matters little if you’re one of the statistics.
Electronics, pharmaceuticals, apparel, food and drinks are the most targeted commodities, but thieves will go after almost anything – even toilet paper.
Trucking incidents account for 80 to 85% of all cases, followed by warehouse burglaries. Collusion between insiders and criminal gangs is often a factor. Warehouse workers, for example, can tell thieves what’s in a truck, when it’s leaving, and its route.
Here are some tips for preventing cargo theft:
- Make sure warehouse doors and gates are properly secured, and the facilities have good lighting and security cameras.
- Know your trucker.
- Assign two drivers and tell them that one should always stay inside the cab when they stop at a rest area. Require them to inform dispatch when they take a break.
- Tell drivers to park in secure areas.
- Place a GPS device or some other covert tracking device in the truck so that dispatchers can monitor it and detect the location if it’s stolen.
- Use a device connected to the ignition that immobilizes the truck if someone tries to start it without a key.
- Tell your driver to go at least 200 miles before stopping. (Most thefts occur within 200 miles of the point of origin.)
- Make sure the truck is fully fueled before the driver picks up the load.
- Use a secure seal on the container or trailer. Manufacturers of seals include Sealock Security and Tyden Brooks Security Group. Seals might not deter every thief, but they discourage most. Moreover, they make it easier to detect partial thefts of contents – the type of “leakage” theft most likely to occur at warehouses.
- Consider using the services of organizations such as Freightwatch International, Cargonet, Supply Chain Security Solutions, the Transported Assets Protection Association, the International Cargo Security Council, or one of its regional affiliates, such as the Southeast Transportation Security Council.
- Inspect the container or trailer thoroughly, including floors, walls and ceiling.
- Keep the calendar in mind when planning logistics. Most thefts occur over the weekend, so don’t expect a driver to pick up a load at 4:00 p.m. on a Friday and deliver it to a destination 400 miles away on Monday morning. That load is going to sit somewhere that’s probably not as secure as your warehouse.
- Do a cost-benefit analysis of security options. Armed escorts are expensive, but if you’re moving high-value cargo in high-risk countries, they may be worth it.
- To recover your cargo after a theft, report it to law enforcement immediately, in as much detail as possible. If you’re a customer or member of one of the above-mentioned security groups, also report it to them immediately.
- Develop a protocol for handling cargo thefts immediately. For example, make sure someone in your company knows how to use a tracking device to locate a truck.
Cargo theft is attractive to criminals because the penalties are relatively light. It is also relatively low on law enforcement’s list of priorities since most U.S. cases are non-violent. There are exceptions. Law enforcement agencies that have units devoted to cargo theft include the New Jersey State Police, the Miami-Dade County Police, and the Los Angeles County Sheriff’s Department.
About Bill Armbruster
Bill Armbruster, the anchor for the Datamyne Blog has covered shipping and trade for 30 years as a reporter and editor with The Journal of Commerce and Shipping Digest. “I’ll be blogging on headline news and current issues in oceangoing commerce, trying to shed some light on the backstories and, wherever I can, supply some sound advice for shippers.” Write to Bill@Datamyne.com
Tags: Bill Armbruster, cargo security, cargo theft, Cargonet, containers, Freightwatch International, International Cargo Security Council, logistics, Supply Chain Security Solutions, theft prevention, Transported Assets Protection Association, truck security, warehouse security
Posted in Exports, Imports, Resources | Comments Off
August 5th, 2010
The path to more U.S. exports is through the nation’s metro areas
“To reset its economic trajectory, the United States needs to connect the macroeconomic goal of increasing exports with metropolitan reality of export production.” So concludes a major study from the Brookings Institute. In plainer English: Metro areas produce exports, so export boosting policy should focus on improving the ability of metro areas to invent, produce and ship exports.
The study calls for metropolitan-level initiatives to encourage public-private partnerships aimed at developing regional industry clusters and networks and marketing their products overseas as well as the federal-level efforts outlined in the National Export Initiative.
The study also provides a wealth of statistical data on metro area exports.
The nation’s four largest exporting metros, New York, Los Angeles, Chicago and Houston, are the top performers, exporting more than $50 billion apiece in 2008. Three quarters of computer and electronics exports are manufactured in the top 100 cities.
Other major metros — Dallas, San Francisco, Boston, Philadelphia, Detroit and Seattle — are also global players.
Together, these 10 large metros generated 43% of metro-sourced exports and 28% of total national exports in 2008.
The study explores the relative strengths and weaknesses of the metro areas. For example, strong manufacturing and patent producing metro areas are the most export oriented.
Four metro areas doubled the real value of their exports between 2003 and 2008. Houston doubled exports largely through sales of chemicals, while Wichita doubled exports based on its aviation cluster. Computers and electronics led Portland’s export growth. New Orleans doubled the value of its exports thanks to oil refining.
You can download the report here.
Tags: Brookings Institute, exporting metro areas, metropolitan areas, National Export Initiative, U.S. exports
Posted in Exports, Resources, Trade Policy | Comments Off
July 26th, 2010
The oil spill continues to roil the Gulf ecosystem and economy
The idea was to push the oil from the Deepwater Horizon spill back from coastal areas with torrents of fresh water by opening several Mississippi River diversions. Unfortunately, it appears that the strategy has been ineffective … and caused collateral damage to southeast Louisiana’s oyster beds that could result in oyster shortages for the next three years or more, reports Lafourche Parish’s Daily Comet.
Oysters are one of a few species that produce ecosystem infrastructure. The temperate zone equivalent of coral reefs, oyster reefs and beds were once a dominant structural and ecological component of estuaries around the world. Globally 85% of oyster reefs have been lost says this Nature Conservancy study.
Most of the world’s remaining wild capture of shellfish comes from five “ecoregions” on the East Coast of North America – with the North Gulf of Mexico region topping the list as a source and the only one of two (the other is the South Gulf) considered in “fair” condition, about as good as it gets for oyster reefs today. Which is why, according to a July 24 New York Times op-ed, the Gulf was considered the leading candidate for oyster reef restoration on a scale to support sustainable fishery. That was before the oil spill, when the political will to launch large-scale restoration was lacking. Post-spill, with the Gulf’s fair condition in jeopardy, the political will and the financial means (starting with BP’s deep pockets) may be at hand … or so the op-ed writers hope.
Ironically, another key requirement (after money) for reef restoration may soon be as scarce as hens’ teeth. As the Bay Daily notes, not only do most of the oysters packaged by Virginia and Maryland processers during the summer come from Louisiana, so do the empty oyster shells used to build new reefs in the much depleted Chesapeake Bay. The shells are also used to farm oysters in aquaculture operations. (And, speaking of hens, ground oyster shells are an ingredient of chicken feed.)
Whether you want to identify sources of supply beyond the Gulf … or you are a supplier looking for customers who need to restock … you can use Datamyne to identify buyers and sellers up and down supply chains. During our online demo, a specialist will show you how to research our data and build a custom report absolutely free. Contact us to book your demo.
Tags: Chesapeake Bay, chicken feed, Deepwater Horizon, Gulf of Mexico, Louisiana, Maryland, oil spill, oyster reefs, oyster shells, oyster shortages, oysters, reef restoration, seafood, shellfish, Viriginia
Posted in Exports, Imports, Markets | 1 Comment »
