The coronavirus’s impact on the world economy and global trade introduced new opportunities and challenges within the framework of the "new normal."
Among the new issues, there are topics such as the restructuring of global supply chains in order to reduce overdependence on China and Asia, the regionalization and digitalization of trade, and safe, environmentally friendly production.
The restructuring of global supply chains has prioritized supply diversification for all companies.
At this point, for companies that produce only with internal supply, it is now more valuable to include external suppliers in the process. For those who only work with external suppliers, it is the same to acquire new internal suppliers.
In particular, the imbalance in the intercontinental trade volume and the considerable latency in the loading and unloading of containers at ports have brought container space to the value of gold.
The cost of containers from Shanghai Port to Los Angeles Port has doubled compared to June and quadrupled for Rotterdam Port.
For Turkey, the cost of an average container was previously $2,500 (TL 18,500). Now, although the price is nearing $7,000 for some routes, Turkish exporters cannot find containers in which to send their sold goods.
This will make nearshoring more valuable in global trade today and in the future.
Turkey's power as a safe harbor supplier country will multiply its orders from Europe, the U.S., the Middle East, the Gulf and Africa.
The reflections of this development are observed in new records in Turkish exports and trade volume.
However, in the coronavirus-shaped era, global trade will force manufacturers, suppliers and companies to do business with more serious standards compared to before.
Firms will have to create a wide supply network for raw materials and intermediate products to deliver their orders on time.
It will be very valuable for Turkish exporters and the business world to closely follow free and regional trade agreements and to capture distinct advantages for Turkey while creating a network of wider supply chains.
Another challenging stage for Turkish exporters and the business world will be to create relations with the raw material and intermediate product manufacturers in the supply chain through the concept of the value chain.
In other words, it will not be enough to see the said counterparts just as producers or suppliers, because the post-pandemic period will be a period where the demand for reliable and hygienic production and delivery from global companies will multiply.
New global standards will be required for manufacturing.
For this reason, it will be a period in which the Turkish exporters should obtain new certifications and accreditations for hygienic and green production.
If the country can overcome these challenges, it will have ample opportunities in global trade.
In terms of global commodity prices, 2021 seems to be a year in which we will be frequently talking about an upward trend. There are important reasons for this.
First, we are experiencing a period of significant difficulties in terms of container transportation on the East-West axis on a global scale.
Container ships and containers headed from the West to the East cannot easily return.
Containers to transport the commodities required for production, agriculture, food, minerals or metals, petrochemical-based products or spare parts, and automotive or machinery products cannot be found. Therefore, this increases the price of commodities.
Secondly, the intensifying vaccine efforts and the recovery in the Chinese economy have raised hopes for the production and growth performance of the world economy and trade.
The movement observed in production and exports is naturally reflected in commodity demand and prices.
At the same time, the growing concerns about “La Nina,” which can be defined as a global climate period, and the threat of drought caused by it, seem to have triggered the rise in agriculture and food prices as another negative point.
The United Nations’ Food and Agriculture Organization (FAO) report showed the highest level in agriculture and food prices of the last six years with the serious movement in the global food trade.
On the other hand, in the London Metal Exchange, the metal index reached its highest level in the last eight years.
The index, which is formed according to the daily closing prices of copper, aluminum, zinc, lead, tin and nickel, was last around 3,500, its current level, in 2012.
Despite the decline in the investment trend for copper mines, copper prices reached an eight-year peak and exceeded $8,000 per ton due to the price increasing with the rising demand.
Aluminum’s value, on the other hand, is around $2,000 per ton. Long positions reached their 10-year high as investors turned more toward commodities against the weakening dollar.
We will also closely monitor the impact of this situation on global inflation.
