In this issue: -5 prevailing factors affecting pulse shipping in 2024. -Pakistan’s shift to bulk vessels in 5 key facts. -The trillion-dollar potential of the transition to green shipping. And much, much more!
PULSE FORWARD DRIVING THE FUTURE OF FOOD SYSTEMS LET'S GET LOGISTICAL From price rises to port strikes, our roundup of the 5 key factors influencing pulses shipping in 2024
I S S U E # 1 2 A U G . 2 0 2 4
GREEN FLAG How the e-fuel transition could rapidly unveil a trillion dollar market
BUYING IN BULK Why Pakistani importers moved away from containers
THE PORT THAT CUTS COSTS FOR USA PULSE EXPORTERS NORTHWEST SEAPORT ALLIANCE
Contact us! EDITOR IN CHIEF MARIANA FUSARO mariana@globalpulses.com CONTENT EDITOR LARA GILMOUR Lara@globalpulses.com
SPOTLIGHT
Pakistan's switch to bulk vessels in 5 key facts 1 • Container crisis Container scarcity led Pakistan to use more bulk vessels. Faisal Majeed, CEO of Bombi’s Group, explains: "With limited containers during Covid, vessel operations represented the most efficient and cost friendly solution. Vessels allow the buyer to manage the supply chain, as the shipment is usually direct." 2 • Hybrid system The new approach is flexible and combines with traditional container shipping. "Pakistan has a hybrid system," says Majeed. “We buy containerized
SPOTLIGHT
Improved freights and availability are crucial for a return to containers (Shutterstock).
SPOTLIGHT
shipments as well as bulk vessel business. When bulk business is workable, we do it, but purchases are still done in containers whenever feasible." 3 • More stability "Banks had been giving letters of credit (LCs) without collateral," says Majeed, "but now 50% of payment is taken in advance, so when the cargo comes in there’s less pressure on buyers to sell quickly into the local markets and reduce local prices. This keeps markets stable and avoids disturbing supply chains." 4 • Bigger is better for bulk financing Smaller companies may not meet requirements to receive an LC to buy in bulk. Majeed explains: "Pakistani banks are quite supportive, but high interest rates mean not everyone can get LCs from the banks. Banks tend to support bigger groups with better financial
SPOTLIGHT
conditions/relationships. Bigger players will then purchase on behalf of smaller players." "Now 50% of payment is taken in advance, so when the cargo comes in there’s less pressure on buyers to sell quickly into the local markets and reduce local prices." 5 • The price paradigm Bulk trade depends on container freight prices – importers swing between them: “There was a patch where bulk shipping stopped being viable,” says Majeed, “but then container rates went back up and bulk became workable again. We’ve done two bulk shipments of yellow peas since then. Unless container prices improve, bulk will continue to be part of Pakistan’s trade.”
PULSE POD CURATED
GPC's global outlook on dry peas, and more
PULSE POD CURATED
AUSTRALIA-PAKISTAN TRADE, INDIA'S KHARIF SOWING, RED LENTILS AND CHICKPEAS IN TURKEY. THIS IS WHAT HAS BEEN ON OUR MINDS LATELY.
PULSE POD CURATED
PULSE POD CURATED
PULSE POD CURATED
PULSE POD CURATED
The sown area of kharif crops increased to 24 million hectares by June 2024, 32% more than last year (Shutterstock).
PARADIGM SHIFTER
Double the green: maritime transition as a trillion-dollar market New data by the UN raises hopes that decarbonization of shipping will create critical potential for economic growth and four million new jobs in the next decade – besides making a sharp turn for the future of life on Earth. BY MARIANA FUSARO 3 MINUTE READ E veryone involved knows it. Speeding up efforts to decarbonize the shipping industry is imperative if we are to limit global warming to 1.5 degrees.
PARADIGM SHIFTER
According to the World Economic Forum, ships produce over 1 billion metric tonnes of CO2 annually, accounting for 2-3% of global greenhouse gas emissions. If the industry was a country, it would rank as the sixth-largest emitter, surpassing Germany and just before Japan; and maritime trade is expected to increase by up to 130% by 2050. As the main trade route of the global economy – over 80% of worldwide commerce is carried by sea – the maritime ecosystem has been facing enormous pressure to decarbonize. But now the extent to which zero- emissions shipping is a market opportunity with vast economic potential, in addition to an urgent need for the environment, is becoming clear . A recent study by the International Maritime Organization, the UN body responsible for shipping, projects trillions of capital
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investment to be injected into green fuels for vessels in the immediate future, due to the rapid scaling of e-fuel uptake. And this may bring solutions to the water not only faster, but at a meaningful scale. FROM AMBITION TO ACTION According to the IMO’s analysis, released this past May, the expanding demand for e-fuels will scale to 500 million tonnes by 2040, requiring an additional 2 terawats of renewable energy generation capacity and up to USD 4.16 trillion of infrastructure investment to support the establishment of renewable energy, hydrogen, and e-ammonia facilities for shipping. The UN projection forecasts the development of 1,500 gigawatts of renewable energy capacity, 800 gigawatts of green hydrogen capacity, and the production of 530 million tonnes
PARADIGM SHIFTER
Green corridors aim to accelerate the uptake of zero-emissions fuels on vessels traveling between major shipping hubs (Shutterstock).
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per year of green ammonia. This will drive the creation of up to 4 million green jobs, mainly during the 2030s, across the main areas of the supply chain. IN THE ZONE By the 2040s, when capital investment is expected to decrease, many of these jobs will have transferable skills that could aid decarbonization efforts in different industries. This is when, from a broader perspective, the wave of green jobs on shipping could have a dramatic impact in the wider economy, facilitating the transition to renewable energy and the adoption of green hydrogen across various sectors, and enhancing climate action even further. Regardless of how these massive figures about e-fuels and green jobs finally play out in the next 10 or 15 years – and the reasons why big players won’t take their
PARADIGM SHIFTER
eyes off the ball –, no doubt the shipping industry has embarked on its journey towards the future. And one fact is already proven: solutions for decarbonizing this and the other supply chains that power our economies are staring us in the face. All we need to do is hoist up the anchor. Ammonia and green hydrogen have great potential in the push for ships to meet the IMO's goal of reducing emissions 70% by 2050 (Shutterstock).
PULSES & BEYOND STEVE BALASKI NWSA
“We want to help pulse shippers take the cost out of their transport” The Northwest Seaport Alliance is a marine cargo operating partnership between the Port of Seattle and the Port of Tacoma. Director of Business Development Steve Balaski gives Lara Gilmour the lowdown on the port activity. What’s your day to day? I’m responsible for the international container line of business at the Northwest Seaport Alliance gateway. I work directly with ocean carriers and shippers to determine how our gateway can improve their supply chains and grow container
FOOD FORWARD PULSES & BEYOND STEVE BALASKI NWSA
“Any additional costs, especially for US products with the current exchange rates, make it that much more challenging to compete globally.”
FOOD FORWARD PULSES & BEYOND STEVE BALASKI NWSA
volumes moving through our terminals. What role does the Northwest Seaport Alliance play in the USA pulses trade? We are the largest export gateway in the USA for containerized chickpeas and lentils specifically; containerized peas also move through our terminals so collectively we’re one of the largest export gateways for containerized pulses. In Q4 of last year, we did about 4,600 twenty-foot equivalent units (TEUs). It is a small volume relative to other export commodities but we are the primary gateway for US pulses to get to export markets and we definitely value the business and engage with the growers to determine how to take the cost out of their transportation and export processes. In general, agriculture is very important to our gateway. Approximately75% of our containerized exports are agricultural commodities.
FOOD FORWARD PULSES & BEYOND STEVE BALASKI NWSA
What are the typical export routes? The primary markets are Asia but in the case of chickpeas, Spain and South America are also important. We have historically had all water ocean services connecting our gateway to Europe and South America. During the pandemic, because of all the vessel voids we had, some pulse traders and growers were forced to look at other export points in the country. Some services were discontinued and that limited our ability to reach those markets. That’s where my team tries to play a role in talking to the ocean carriers and connecting them to shippers. We’re focused now on engaging with ocean carriers and the pulse community to get that capacity back. Has the pressure come off since Covid? I would say in 2024 we have moved beyond the congestion issues seen during the pandemic. In 2023 we had over
FOOD FORWARD PULSES & BEYOND STEVE BALASKI NWSA
PING-PONG How do you let off steam?
Go for a run, I’m a big trail runner What’s the most dangerous thing you’ve ever done? Driving while traveling in other countries. At least it felt dangerous at the time! If you could eat one meal for the rest of your life, what would it be? Chicken fried steak and mashed potatoes… with lentils! If you could give your 18-year-old self some advice, what would it be? “Be open to new experiences.” You can bring one object to a desert island, what would it be? My kindle. What’s the last great book you read? Team of Rivals. it’s about Abraham Lincoln and his cabinet.
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200 voided sailings, which was a huge problem, but this year we’re below 2019 levels in terms of frequency of that activity. We track vessel schedule reliability and it’s also much improved; some lines that weren't calling since Covid have come back. I’d say on the west coast of the USA in general, things have improved and we’re finally past the boomerang effect of the pandemic. What are some of the challenges currently facing the port? Our efforts to attract services serving key pulse export markets have been hampered by the situation in the Red Sea and recent restrictions at the Panama Canal. Available vessels have been deployed in these lanes to account for the longer transit times. That restricted transit is having an impact on available vessel capacity to serve new markets. That limits the ability of ocean carriers to expand
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their services because they don’t have the ships available. We’re also seeing the impact on rates. The spot market has surged this year, especially in the trans-pacific market, more so on the import than the export side but we are seeing the price pressure there too. It has more impact on the export side because margins on those commodities are so much lower. I would argue that the competitive nature of the commodity markets is much greater. Any additional costs, especially for products in the USA with the current exchange rates, make it that much more challenging to compete globally. Once you throw in tariffs as well, it’s a real challenge. Are you finding that price pressure is causing the formation of new trade routes for ag commodities out of the port? If shippers need to move the product, they
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find a way. They’re looking at all options from trucking to rail down to east coast ports. We’ve seen peas grown in Montana move to Montreal for export, for example. Freight will always find a way to move and if they can't do it through here, they just have to find a way. It does increase the cost and decrease the efficiency but, at the end of the day, they have to serve their customers. What tools does the NW Seaport Alliance have in its arsenal to come up against that competition? The Northwest Seaport Alliance is a marine cargo operating partnership between the Tacoma and Seattle ports. It’s a new model, the first of its kind - at least in the USA-, and allows us to act as a single gateway. We don’t have a preference on where cargo goes between the two ports, which lets us look at our capital investments more holistically in terms
FOOD FORWARD PULSES & BEYOND STEVE BALASKI NWSA
of how we serve the Pacific Northwest. We are what’s known as a ‘landlord port’, which means the terminal operating company is our tenant so we don’t directly operate our container terminals. Our CEO John Wolfe and the leadership team are focused on making our gateway easy to do business with. We are always looking for ways to influence better processes, such as how to improve vessel and cargo receiving consistency so that the shipper can have more stability and avoid additional costs. We have a new program that financially awards shipping lines whose services are on time. What we’ve seen is if the ship is on time as scheduled, a lot of the other issues with congestion are minimized. We also have a peak planning meeting every year where we bring the whole supply chain into a room to discuss issues and opportunities for improvement. We highlight best practices and trends to help the supply chain to plan
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THE NORTHWEST SEAPORT ALLIANCE IN NUMBERS 75% of their containerized exports are agricultural commodities. In Q4 of last year, they did about 4,600 twenty-foot equivalent units (TEUs). International and domestic trade supports more than 58,000 jobs. Nearly $12.4 billion in business output. More than $4 billion in labor income. About $136 million in state and local taxes to support communities throughout the region. Source: 2023 NWSA Annual Cargo Report.
FOOD FORWARD PULSES & BEYOND STEVE BALASKI NWSA
better. We look at things such as improving communication and increasing the visibility of shipping data. What innovations and technology are you using to support that? We’re focused on improving the visibility of cargo status information within our gateway. We currently leverage our website to provide operational data and are looking to expand this capability. We also publish a weekly operational summary we call the Gateway Performance and Outlook report. We’re focused on meeting our customers’ needs around availability of this information so they can better plan their shipments. There's also a national initiative at the federal level around supply chain visibility focused on creating a more standardized and national model for visibility to shipment information.
PULSES & BEYOND STEVE BALASKI NWSA How do you see the upcoming elections influencing port activity? Tariffs have been a key concern in this area as they have significant implications for our shippers, especially with India being the largest pulse consumer. Going back to low margins and price sensitivities, tariffs make it harder for US farmers to compete in the global marketplace so we definitely watch that closely. On the inbound side, we are seeing manufacturing shifting to other countries to avoid tariffs - there’s been a lot of interest in investment in Mexico, for example, for manufacturers. Is the port involved in advocacy at the policy level? We have a government affairs team and we do some of the advocacy work where appropriate. Because tariffs can have a negative impact on our volumes, we do advocate certain positions.
FOOD FORWARD PULSES & BEYOND STEVE BALASKI NWSA
Is there anything you would like to raise awareness about within the pulses community? I’d like to bring awareness of the importance of the logistics chain and the role ports play in it and encourage investment in ports and transportation infrastructure. It might not be the most exciting part of the supply chain but it is critically important. The USA transport network and infrastructure is what makes us more competitive, for example with countries like Brazil in crops like soybeans. Improving the transport network can make getting pulses to market more efficient and cheaper. You need great infrastructure to feed the world and get the food where it needs to go. I’d encourage the pulses community to be supportive of efforts to improve the infrastructure, that’s my soap box item! The shippers and exporters have a bigger voice than we do so we’d be grateful for
PULSES & BEYOND STEVE BALASKI NWSA
any awareness raising around port issues that would also indirectly have an impact on improving the whole supply chain. What was it like when you first got into this world and how has it changed? When I first got in, email was very new - it was on a mainframe computer! There was no internet… I remember looking at my first webpage and it took five minutes to come on the screen and we were like ‘what’s the point of this’? On the macro level, it feels like we’re more connected now, it’s so much cheaper and easier to have global connections. When I first started, international phone calls were rare and now people on the other side of the world are an email or text away. Also, I thought people used to work long hours then and now it is literally 24/7.
THE BIG PICTURE
Navigating shipping's turbulent waters From new ports and a lack of containers to rising prices and an extended Red Sea crisis, this is our roundup of the biggest factors in shipping and logistics influencing the global pulses trade this year and beyond. BY LUKE WILKINSON 8 MINUTE READ 1 • Disruption in the Suez Canal continues As always, the world's key transit arteries are vital to the pulses industry – instability in any of these trade routes can disrupt shipping directly and indirectly through
THE BIG PICTURE
repercussions in price, shipping times, and the availability of containers. July 2024 saw the Panama Canal return to a normal amount of daily vessel passages after last year's extreme drought conditions caused a drastic reduction of container traffic. As drought eased significantly, more containers have gradually been allowed to use the route. Shipping through the Suez Canal, however, remains unstable thanks to ongoing attacks on shipping vessels by Houthi rebels in the Red Sea. The Houthi rebels are a political and religious group opposed to Israel, the US, and the Western world, as well as the Yemeni president, Ali Abdullah Saleh. Since November 2023, the rebels have attacked more than 70 shipping vessels, seizing one and sinking two. The result?
THE BIG PICTURE
Rising prices, less availability, and greater instability across the shipping industry. The International Monetary Fund (IMF) The Panama Canal, inaugurated in 1914, has long been surrounded by geopolitical and, more recently, climatic tensions (Shutterstock).
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has stated that in the first two months of 2024, the volume of transit trade going through the Suez Canal had halved year- on-year. A July New York Times article put container traffic through Suez at “one tenth of its usual flow,” which has meant many ships going around the southern Cape of Africa. This rerouting is far more expensive and demands significantly more energy use – Ship Management International reported that 20-foot container miles traveled have increased by 17.9% in 2024 compared to the same period of time in 2023. Maersk reports that the number of ships passing through the canal has dropped by 66% since carriers began to divert ships. How this issue develops will depend on many factors – the reaction of the shipping carriers themselves, for one. Freight tariffs have already gone up as a result of the crisis, and as long as the Red
THE BIG PICTURE
Sea attacks continue, we can expect the disruption, and the costs, to keep rising. 2 • Price rises in China and beyond Regional conflicts such as the Houthi rebels are just one of many variables that cause the cost of maritime freight to rise. Hiccups in a tightly organized system create big repercussions down the line, and 2024 has seen prices for some routes jump significantly due to the various threats and obstacles faced by shipping. Sending a 40-foot shipping container from China to Europe has increased by an average of US$1,200-US$7,000 since October 2023. Similar rises have been seen on other routes, including shipping goods across the Pacific. 20-foot containers sent between Shanghai and Europe have risen from just under US$800 up to around US$4,000 since the first seizure of a cargo ship by Houthi rebels.
THE BIG PICTURE
Surcharges, price rises, and stress from lower vessel capacity remain a threat to smooth shipping, as well as margins. Nick Crowley of CL Commodities told the GPC’s Pulse Pod in July that "shipping lines have As we enter peak season for shipping for many regions around the world, traders will be keeping their fingers crossed that a deceleration sees more reasonable, trade-friendly pricing moving forward. increased freight rates at short notice and canceled bookings at short notice, making trade difficult in the short-term." While this is the experience of an Australian trader, it is not unique to that region's trade routes – prices from Korea to the EU, for example, rose 44.6% in June compared to May, or
THE BIG PICTURE
121.6% year-on-year. In mid-July, Norman Global reported average spot rates from the Far West to US West Coast had ‘risen 200%’ since April. Some good news comes from a July 18 Shipping Watch article suggesting prices for shipping have already peaked, with price inflation on global routes slowing significantly compared with the preceding weeks. As we enter peak season for shipping for many regions around the world, traders will be keeping their fingers crossed that this deceleration sees more reasonable, trade-friendly pricing moving forward. 3 • Berbera port in Somaliland, a new outlet for Ethiopian pulses Since the secession of Eritrea from Ethiopia in 1993, Ethiopia has become the world's most populated but landlocked country. It is also one of the world's largest producers
THE BIG PICTURE
of pulses. As mentioned in the GPC's interview with Sefa Mohammed earlier this year, the majority of Ethiopia's exported pulses go by train to the port of Djibouti – a neighboring coastal country alongside Somalia and Somaliland. The latter's independence from Somalia has not been recognised internationally, but is now hoping to provide a new shipping outlet for the east of Ethiopia. Ethiopia is also keen, but Somalia's government is not. The Turkish government has had to become a mediator between Ethiopia and Somalia, after the latter's rejection of a memorandum of understanding (MoU) between Ethiopia and Somaliland for use of the Berbera Port and the lease of a 20 km stretch of the Somaliland coastline in exchange for recognition of their independence.
THE BIG PICTURE
SHIPPING RATE INFLATION
THE INCREASE FOR 40-FOOT SHIPPING CONTAINERS SENT FROM CHINA TO EUROPE SINCE OCTOBER 2023. $1,200-$7,000
THE PRICE RISE FOR 20-FOOT CONTAINERS SENT BETWEEN SHANGHAI AND EUROPE. FROM $800 TO $4,000
+44.6%
THE RISE OF FREIGHT RATES FROM KOREA TO THE EU IN JUNE COMPARED TO MAY, OR +121.6% YOY.
THE BIG PICTURE
More talks are set to be held in September regarding the port, although a Somaliland official speaking to Reuters has expressed pessimism. "I don't see a way forward," said the official, "and I don't expect much will come from these talks." Diplomatic efforts continue, and greater sea access for Ethiopia has the potential to transform both the region and Ethiopia's capacity to export more of its pulse production at more competitive prices. For understanding the shifting export dynamics and the often fragile peace in the region, this is a development worth keeping an eye on over the coming year. 4 • Labour strikes and shortages Another issue that has reared its head over the last year is shipping disruptions due to labor strikes. In June, negotiations between the US Maritime Alliance and the
THE BIG PICTURE
International Longshoreman Association failed, with the likely impact that labor strikes would create poor congestion and delays on the East Coast and Gulf Coast of the United States. Lars Jensen, founder of Vespucci Maritime and Market Analyst, wrote in Shipping Watch that the effects of labor shortages could equal those seen during the Ever Given blockage of the Suez Canal in 2021. There have also been multiple labor disputes and strike threats seen in Canada. One Canadian shipping union – International Longshore and Warehouse Union Ship and Dock Foreman Local 514 – has threatened strikes that would affect West Canadian ports. So far, these threats have not materialized, and the strike itself was declared invalid by the Canada Industrial Relations Board. Canadian Labour Minister, Seamus O'
THE BIG PICTURE
Regan, has said that "federal mediators will be working with the parties to make a deal." North America is not the only area affected by labor issues – workers in Hamburg and Bremerhaven in Germany began striking on July 10 in order to put pressure on employers to offer better working conditions. Analysis by the Russell Group suggests that these strikes could lead to a US$6 billion trade loss. 5 • Port congestion and container availability Over recent months, congestion in the ports and less availability of containers have reared their heads once more. A problem most acute post-pandemic, traders around the world have seen how the quality of shipping can spiral out of control when congestion combines with limited containers. Carla Borges, Trade
THE BIG PICTURE
Singapore, one of the busiests ports in the world (Shutterstock).
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Director of NG Trade in Brazil, told the GPC in July that she was experiencing a "big fight to get containers," and that prices had shot up for August trade. But for her, this is not the biggest issue: "The main problem," says Borges, "is space on the terminal for inspection. This is causing exporters to take big losses." Nick Crowley believes that "the Red Sea blockage is causing generally longer transit times and slower circulation of shipping containers" but that surges in demand are also having an effect. "Higher demand from the USA in Europe has pulled containers away from the Australia-to-Indian subcontinent/Middle East trade routes,” he told GPC in July. Right now, routes between China and Europe have taken a big chunk of the impact caused by the Red Sea crisis – the Port of Singapore has come under
THE BIG PICTURE
particular stress with a backlog of ships causing a bottleneck for trade, but as of mid-July, this appears to be easing, with June's throughput at the Port of Singapore down a reported 5% from the month before. Peak season for shipping (typically between mid-August and mid-October) may have been brought forward by traders getting ahead of the curve by booking cargo in advance . This, combined with the port labor concerns and attacks in the Red Sea, could explain why peak-level price rises have been felt in the spring/early summer. In May, ocean freight saw its highest ever demand – a global record, according to Xeneta. This suggests that the need for containers and smooth shipping remains strong as ever, and if the obstacles continue, so too will the domino effect that extends transit times and keeps containers scarce.
SATELLITE VIEW
“Trust is fundamental - we always say prevention is better than cure” Michael Howlett, Director of the ICC International Maritime Bureau (IMB) discusses fraud prevention and IMB's unique confidential database.
BY LARA GILMOUR 5 MINUTE READ
Tell us about your work at IMB. I joined the IMB on a six-month contract in May 1994 so I’ve got 30 years in the game. Work has changed: when I joined, there were interesting times. You’d see ships stealing cargoes under false
SATELLITE VIEW
Three decades in the business haven't made Michael more pessimistic about people: you have to see the goodness in human nature as well, he states.
SATELLITE VIEW
names - we were involved both on the preventative and on the investigative side and over the years it's become more about early identification and prevention. Lots of banks now also use our services as well as traders, shipping companies, insurance, law firms - anyone with a legitimate interest in trade. We do a lot on the verification of documents financing commodities. Additionally, we do thousands of checks a week for our membership, so we have a lot of information coming our way. What’s the importance of reporting incidents before they happen? We’re often referred to as the ‘anti- crime unit’ of the International Chamber of Commerce, the world business organization; our role is to make sure you do business with the right people and avoid the ones you don't want to be doing business with. We have a lot of unique
SATELLITE VIEW
information built up over the years that no other data provider has access to. We assist our members to identify red flags, thus safeguarding their interests and protecting the integrity of trade. How much of your work is about piracy prevention? We get lots of shipowners, governments and academia asking about piracy hotspots but it’s something we do because we believe it is only right to safeguard the seafarers that move trade – we all depend on it. The Piracy Reporting Centre is based in Malaysia and the service is provided completely free of cost and subsidized via industry funding. Our Q1 piracy report shows there has been a slight resurgence in Somali piracy, which we haven’t seen in many years. The robust actions of the Navies, whom we work closely with, resulted in several pirates being captured and ships being freed.
SATELLITE VIEW
Tell me about the work you do with banks. We got involved there because there were a lot of false Bills of Lading being issued, things like cargoes that don’t exist but with the Bill of Lading presented and people running away with the money, for example. Over the years it’s grown because now you have collusion between buyers and sellers and, in addition to fraud, there is money laundering and sanctions evasion and that’s a niche area we advise the banking industry on. All banks use our services to varying degrees to make sure there is an underlying trade to every transaction and the documents presented are genuine and not fabricated or cloned. Are you constantly surprised by the new methods fraudsters use to deceive? Does it make the job more fun? To an extent. IMB was started by an ex-
SATELLITE VIEW
ABOUT IMB The ICC International Maritime Bureau (IMB) is a specialized division of the International Chamber Of Commerce (ICC). Established in 1981 to act as a focal point in the fight against all types of maritime crime and malpractice. The IMB's responsibilities lie in fighting crimes related to maritime trade and transportation, particularly piracy and commercial fraud, and in protecting the crews of ocean- going vessels. It publishes a weekly piracy report and maintains a 24-hour piracy reporting centre in Kuala Lumpur, Malaysia.
SATELLITE VIEW
policeman and he said to me when I joined: ‘this isn’t a glamorous job’. It’s very much like policing, 96% of the time you are dotting the i’s and crossing the t’s; everything checks out. But there are a few instances when you find something that no one else has noticed. Fraudsters are becoming more sophisticated, especially in manipulating the financing of trade. How do they get the information? Shipping information is becoming increasingly transparent. In some ways it’s a good thing but it’s not uncommon for a port to put up vessels that are going to call, who the agents are, what the quantities are etc. and then people use that information to fabricate documents and send them off to ask for financing. With containers, there is a lot of information publicly available that can also be misused by unscrupulous parties to gain an advantage.
SATELLITE VIEW
Commodity trade is one of the more opaque industries. How much does that opacity affect what IMB is trying to do? It’s a good question because it’s about that competitive advantage. What we do is all about information sharing so you've got to volunteer that information sometimes because ultimately you can benefit from the information and experience of others. How would a relationship between our two organizations be mutually beneficial? Fraudsters benefit from the knowledge that businesses cannot share information for various reasons including market competition. A membership such as ours allows companies such as GPC members to benefit from the hundreds of thousands of companies we have in our confidential database: no one else has access to that. The inquiries on your side
SATELLITE VIEW
would contribute to our database which would ultimately benefit GPC members. And it’s not just traders but the whole chain of the trade. How else do you help protect your members against fraud? There’s a big problem with documentary fraud and most people involved in committing it are relatively small freight forwarders or NVOCCs and quite close to the parties shipping the goods. So a few years ago we launched the NVOCC register, which all our members have access to. When someone signs up to the register they have to agree to a Code of Conduct and that does help some banks look at them more favorably. There have been examples where a shipping document has come to us issued by one of these registered forwarders and we can't rationalize it but then the issuer has to give us an explanation and if they
SATELLITE VIEW
don’t, they get a yellow card and then they would get a red and then they’re removed from the Register. Do you think technology like blockchain will reduce fraud in the future? I have a different view on these tech advances because they work on the assumption that all business is good but unfortunately that is not reality. We see all the efficiencies and understand all the arguments as to why but for us it doesn’t change the nature of fraud and, in many ways, it may just accelerate it. Take the collusion angle, for example, if you allow people into these systems and you have a buyer in one country and a seller in another and they’re both in on the fraud, the fraud is still there - be it on paper or on the blockchain. Those that currently own the risk will still own the risk, only now they will not be able to quickly identify it, which is concerning.
FRACTIONS: A STORY IN 4 CHARTS
African pigeon pea outlook 1 SUDAN Talking to GPC in July, Jahid Nagarwala, CEO of Alfa Group, said Sudan’s old crop is virtually finished, with around 5 thousand tonnes remaining from 23/24. Since the country is currently at war, only Port Sudan is operational for agricultural exports and logistical issues are rife, with the loading of cargo alone sometimes taking up to two months. The country will be expecting its 24/25 crop in the last quarter of the year, ready to ship from January 2025. Trade estimates put the crop production at 60 thousand tonnes while IPGA sources put the 24/25 volumes at 40 thousand tonnes.
FRACTIONS: A STORY IN 4 CHARTS
PRODUCTION 1,000 MT by Year
100
95
80
60
50
48
48
42
40
40
38
38
40
30
30
28
28
20
0
018
2017
2019
2018
2020
2019
2021
2020
2022
2021
2023
2022
2024
FORECAST
FRACTIONS: A STORY IN 4 CHARTS 2 MOZAMBIQUE
Pigeon pea production in Mozambique, which comes off in August, is expected at somewhere between 300 and 350 thousand tonnes in 2024, following on from a steady growth trend since 2021. As the largest volume to come out of Africa, Mozambican production should go some way to meeting India’s demand which, despite the exception of an improved harvest in 24/25, will still need to be fulfilled by East Africa and Myanmar. During GPC’s East Africa webinar in July, it was indicated that both the trade and the government were assuring a “smooth export process” despite the ongoing dispute between Royal and ETG.
As the largest volume to come out of Africa, production should go some way to meeting India’s demand.
FRACTIONS: A STORY IN 4 CHARTS
PRODUCTION 1,000 MT by Year
320
30
300
300
278
278
250
231
231
200
176
148
148
150
130
130
120
120
100
50
0
2018
2017
2019
2018
2020
2019
2021
2020
2022
2021
2023
2022
2024
202
FORECAST
STEADY GROWTH TRENDS SINCE 2021
FRACTIONS: A STORY IN 4 CHARTS 3 TANZANIA
The East African nation is expecting a production of around 200 thousand tonnes. In June, Zirack Andrew of Tanzania Pulse Network told GPC that Tanzania is “like an oasis in the desert in the sense that it is surrounded by three major pigeon pea producers who are battling with El Nino effects that have impacted production.” The fact that Tanzania has not been impacted, Andrew said, “will contribute to increased demand for pigeon pea and chana from Tanzania,” adding that “prices last year were the highest in 7 years, which has encouraged farmers to increase the production areas.”
The country's crop was not hit by El Niño, unlike nearby producers who were impacted.
FRACTIONS: A STORY IN 4 CHARTS
PRODUCTION 1,000 MT by Year
200
200
200
200
179
179
149
149
150
113
96
96
100
84
84
78
78
50
0
2018
2017
2019
2018
2020
2019
2021
2020
2022
2021
2023
2022
2024
202
FORECAST
2023 PRICES WERE THE HIGHEST IN 7 YEARS $
FRACTIONS: A STORY IN 4 CHARTS 4 MALAWI
As with the rest of East Africa, Malawi increased its pigeon pea area in 2024, leading to a projected production volume of approximately 100 thousand tonnes. According to Nagarwala, Indian policy has helped African farmers plan and plant certain crops, particularly pigeon peas. It is also worth mentioning that in Kenya farmers have also turned their attention to pigeon peas in 2024 and Nagarwala is forecasting an exportable volume of around 30 thousand tonnes in addition to the production it keeps for domestic consumption.
All in all, the five African nations could produce as much as 750 to 800 thousand tonnes in 2024/25.
FRACTIONS: A STORY IN 4 CHARTS
PRODUCTION 1,000 MT by Year
100
100
78
78
80
75
75
65
65
60
50
42
42
40
37
37
34
34
20
0
2018
2017
2019
2018
2020
2019
2021
2020
2022
2021
2023
2022
2024
202
FORECAST
THOUSAND TONNES OF PRODUCTION 100
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