They are all facing a global shortage. When COVID-19 hit, lockdowns across the globe halted production as movement controls bit. But equally, when economies reopened, the sudden and unanticipated surge in demand hit many suppliers unexpectedly.
With central banks across the world pumping in stimulus after stimulus, there is also a danger that combined with the global commodities shortage, it will also trigger an uncontrolled run of inflation. Policymakers and money managers alike are on tenterhooks to see if the commodity shortage of 2021 will be a temporary blip or a much longer-lasting sting.
A PERFECT STORM
The combination of COVID-induced disruptions and a sooner-than-expected spike in demand has created the perfect storm for many inputs across the world. This has manifested itself in markets as diverse as lumber, plastics, and semiconductors.
With input costs rising sharply, companies are left scrambling to figure out what to do. Many have indicated passing on the increased costs to consumers, similar to the last commodities supercycle that started in 2008.
This story is from the Issue 29, 2021 edition of SME Magazine Singapore.
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This story is from the Issue 29, 2021 edition of SME Magazine Singapore.
Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 9,000+ magazines and newspapers.
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