RESHAPING FOOD, FUEL AND FACTORY SUPPLY CHAINS
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n recent decades globalisation has transformed economies, societies, and capital markets. More and more companies started operating on an international scale, enabling them to look beyond their homeland for manufacturing, supplies and labour. This period was accompanied by a marked decline in inflation and lower central bank interest rates. By participating in the global economy millions of people were able to join the ranks of the middle class. However, the current wave of globalisation could be coming to an end. This is because an increasingly confrontational relationship between America and China has been exacerbated by the Ukraine conflict. The Coronavirus epidemic has also exposed fractures in our economic interdependency. WHY DOES THIS MATTER? An end to the positive effects of globalisation has significant implications for investors.
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| SHARES | 30 June 2022
By Mark Gardner Senior Reporter
First, nations will need to become less reliant on outsourcing for manufactured goods. Robotics providers should benefit as manufacturing is moved closer to end markets and more automation is introduced. Second, the surge in prices for grain and fertiliser, following the imposition of Russian sanctions and the supply disruptions associated with the Ukraine conflict, has highlighted the strategic importance of domestic agricultural production. Companies that can enhance agricultural productivity and the nutritional content and appeal of food products are ideally positioned to gain from the current dislocations in the soft commodities markets.
