In last year’s Annual Review and Outlook, I wrote of the anticipation that 2017 would be a year of uncertainty, and that it was; the market traded with less forward demand, and, instead, the spot market defined 2017. In terms of carrier ambiguity, the waters calmed in 2017 and the roll-out of new alliances was executed seemingly flawlessly with few major service disruptions. With low rates for much of the year, the market demonstrated an incredibly conservative approach to political and geopolitical uncertainty.
As for 2018, while economic indicators are trending up, the agricultural grain and feed markets look to face another year of supply outpacing demand.
Those of us in the global trade market are expected to operate in an environment of rapid change; change that manifests itself in copious ways. The global agricultural trade is continually faced with geopolitical obstacles. In 2017, the dried distillers grain (DDGS) market faced regulation changes in Vietnam, forcing a shift in sourcing product from the US to Canada and back to the US with new regulatory restrictions. We adapted, and utilized our networks to comply and continue the trade, albeit in lower volumes, but the market adjusted.
The most interesting industry dynamic that will impact US exports will be the resins market and how it manifests volume. It’s the most anticipated market mover the trade has seen in several years. With the reduction of wastepaper shipments, and an unsure timeline of when the big resins boom hits, I expect volumes to remain relatively flat in the first half of 2018, yet I’m incredibly intrigued to what the last half of 2018 will bring.
With rumors swirling around policy changes in China regarding the taxes levied on DDGS, and continued year-over-year US bumper crops, 2018 has the potential to be a rebound year.