Widdison warns on the logic of today’s global logistics

By Leon Gettler, Talking Business >>

THE GLOBAL supply chain has been caught up in a ‘perfect storm’ according to New Laboratories managing director Rohan Widdison.

The turbulence ranges from the war in Ukraine to the energy crisis hitting manufacturers in Europe and to Indonesia stopping the export of palm oil which slowed down the supply of glycerine.

New Laboratories supplies the cosmetics manufacturing industry for skin care, body care and tanning products.

“You might have 20 raw materials that go to one manufacturer to create that material and when all these things stop happening, then those suppliers run down their supplies, then price starts moving up, they try to catch up with demand – and they can’t catch up with demand so it becomes a supply-demand situation,” Mr Widdison told Talking Business

“So you might have bamboo material that comes out of Thailand that goes to France to be processed. Well, when you don’t have a demand for Thailand, then suddenly those materials stop getting made.

“It’s a perfect storm situation because right now we’re seeing shortages happening and prices going up because of situations like that very unfortunate war in Ukraine. A lot of oils come out of there, particularly sunflower oil. And so we suddenly saw sunflower oil take a 200-300 percent increase overnight,” he said.

“At the same time, you see the issue of energy going into Europe, particularly for German manufacturers, and that has a kick-on effect for manufacturers in Germany, so suddenly you get short supply and cost increases

“Then you compound that with Indonesia reducing the export of palm oil. That pushes up the price of basic materials so suddenly glycerine goes up 300-400 percent in a matter of months.”

Manufacturing lead times ‘blown out’

As a result, Mr Widdison said, the lead time to manufacture products “has blown out”.

“What that means for the consumer is that you go to a store and you see an increase in something that used to be $29 and it’s now $32,” he said. “That’s the reality of it. The cost unfortunately kicks on down the line because manufacturers pass on the cost to the brand and the brand passes on the cost to retailers and consumers.”

There is also the issue of shipping costs, which rose massively during COVID.

 New Laboratories is telling its brand partners that this will continue until 2025. Which means it’s a “rocky road ahead”.

Inflation ‘built in’ to 2025

The other issue too, Mr Widdison said, was that whenever there had been a shortage of raw materials, and subsequent price increases, they never go back to their old prices.

This is the inflationary aspect to supply shortages, he said.

This also means accepting there will be a longer lead time in the manufacture of certain products.

“That’s a common discussion, almost daily discussion, we have with our clients,” Mr Widdison said.

“Don’t think about having your products made within 60 days. Think of them being made four to six months down the track, subject to availability of raw materials.”

Added to this is the problem that inflation will still be around for the next two years, he warned.


Hear the complete interview and catch up with other topical business news on Leon Gettler’s Talking Business podcast, released every Friday at



Farmers say strong climate policy will deliver strong EU trade deal

STRONG climate policy can help deliver Australian farmers a great trade deal with the EU, according to Farmers for Climate Action CEO, Fiona Davis.

Australia’s beef, lamb and dairy farmers will directly benefit from such a deal, Dr Davis said. 

“EU Trade Commissioner Valdis Dombrovskis has now clearly stated climate change targets will be part of any trade deal between Australia and the EU. The EU has much more ambitious climate targets than Australia – 55 percent below 1990 levels by 2030,” Dr Davis said.

“The EU Trade Commissioner has also made it clear that Australia’s farmers may face trade sanctions if Australia does not catch up on climate. The EU and other markets have warned of a carbon border tariff on Australia unless we catch up on climate and now this is becoming reality. 

“Let’s not miss the opportunity to seal a great trade deal for our farmers by pushing deep emissions reductions this decade. Strong climate policy creates strong regional economies and tens of thousands of regional jobs.

“The farmers who grow our food do not deserve to be punished for the emissions of the energy and transport sectors," Dr Davis said.

“Farmers have been waiting for better access to the huge EU market for years. We want bigger quotas for our beef, lamb and dairy farmers. The EU trade deal represents a huge opportunity for them, and strong climate policy brings huge opportunity to regional Australia.”

Farmers for Climate Action is a movement of 7000 farmers calling for strong economy-wide climate policies.



Parliamentary Inquiry supports CPTPP trade expansion to include UK, Taiwan and South Korea

THE Federal Parliamentary Joint Standing Committee on Foreign Affairs, Defence and Trade (JSCFADT) has tabled its report on Expanding the membership of the Comprehensive and Progressive Trans-Pacific Partnership (CPTPP).

Ted O’Brien, chair of the Trade Sub-Committee, said, “Australia should support the expansion of the CPTPP to include new members, but not unconditionally.

"Only aspiring economies that support an open, transparent and stable trading environment and those that demonstrate an ability and willingness to meet the agreement’s high standards should be considered," Mr O’Brien said.

"The CPTPP is one of the world’s most comprehensive trade agreements and its quality must be maintained." 

Among the committee’s recommendations was that the Australian Government work with other CPTPP members to encourage and facilitate the accession of the United Kingdom, Taiwan and South Korea.

"The UK was the first to apply to join the CPTPP and the process it’s going through can be a template for other future aspirants," Mr O’Brien said.

The committee’s recommendation on Taiwan went one step further, suggesting the government also consider negotiating a bilateral Taiwan-Australia Free Trade Agreement (FTA).

"A lesson from our experience with the UK is that benefits accrue from negotiating a bilateral FTA and the CPTPP at the same time, and we see merit in replicating this approach with Taiwan," Mr O’Brien said.

On China, the committee recommended the Australian Government work with other CPTPP members to, "encourage China to re-establish full trading relations including ending its coercive trade measures and reengaging in ministerial dialogue, and to demonstrate an ability and willingness to commit to the CPTPP’s high standards, prior to supporting the commencement of an accession process".

"The ball is in their court," Mr O’Brien said. "It’s up to China if it wishes to re-engage with Australia and I hope it does because that would enable the discussions that are necessary to determine whether an accession process should commence."

The United States has not sought to join the CPTPP since it withdrew from negotiations under President Trump. Nevertheless, the committee recommended that the Australian Government work with other CPTPP members to encourage the US to renew its interest.

The committee also recommended ongoing informal discussions with other economies that have expressed an interest in joining the CPTPP including Thailand, Indonesia and the Philippines.

A copy of the report and further information about the inquiry is available from the committee’s website.



Taiwan puts forward its case to join the CPTPP

REPRESENTATIVES of the Taipei Economic and Cultural Office in Australia will appear at an Australian parliamentary inquiry to explain Taiwan’s interest in becoming a member of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP).

Sub-committee chair and Federal Member for Fairfax, Ted O’Brien said he looked forward to hearing from the representatives of Taiwan.

“Only three prospective members have lodged a formal application to join the CPTPP – the United Kingdom, the People’s Republic of China (PRC) and Taiwan (Republic of China, ROC),” Mr O’Brien said.   

“The committee has received an overwhelming number of submissions in support of Taiwan acceding into the CPTPP. This hearing provides an opportunity for Taiwan’s top diplomat to prosecute Taiwan’s own case for joining this vitally important trade agreement.” 

The CPTPP agreement signed in 2018 is a trade bloc of 11 countries that includes Australia and is an export market of 500 million consumers worth nearly $14 trillion.

The parliamentary inquiry by the Trade Sub-Committee of the Joint Standing Committee on Foreign Affairs, Defence and Trade will examine the scope for expanding the CPTPP beyond the existing membership of Australia, Canada, Japan, Mexico, New Zealand, Singapore, Vietnam, Brunei Darussalam, Chile, Malaysia and Peru and the merits of quite different economies seeking to join the trade bloc such as the People’s Republic of China, the UK and the most recent applicant Taiwan.

The committee has heard previously from a range of corporations, business chambers and individuals in both Australia and in Taiwan such as the representatives of the Australia-Taiwan Business Council, the Taiwanese Chamber of Commerce in Australia, Taiwanese Chambers of Commerce in Oceania, the Australia New Zealand Chamber of Commerce in Taipei, Chinese International Economic Cooperation Association Taiwan, the CPC Corporation Taiwan, and the Bankers Association of the ROC and many others seeking closer trade links.

Further details about the about the inquiry, including the program and the terms of reference, details of past public hearings and roundtable discussions, can be obtained from the Committee’s website.


Joint accounting bodies welcome Australia-UK trade agreement

CHARTERED ACCOUNTANTS Australia and New Zealand (CA ANZ), CPA Australia and the Institute of Public Accountants (IPA) have jointly welcomed the in-principle announcement of the Australia-United Kingdom (UK) Free Trade Agreement (FTA).

Their joint communique said the agreement had the potential to deliver great benefits to the accounting professions in both countries, "through provision for mutual recognition of qualifications and expanded rights for Working Holiday Maker visa holders".

"The accounting profession is a global profession," the group said. "There is a well-established market for Australian accountants in the UK and vice versa, with detailed mutual recognition agreements in place between the professional bodies of Australia and the UK. 

"Together, CA ANZ, CPA Australia and IPA have almost 12,000 members in the UK. In a standard year, around 1000 of our members travel to the UK on a variety of visas.

"Once there, they provide high quality accounting services and through their engagement in corporate life solidify the economic relationship between Australia and the UK. Many of them support the trade and investment flows between Australia and the UK.

"There is a great commonality in the accounting, auditing, accounting ethics and accounting education standards between these two countries. The mutual recognition of accounting skills in both jurisdictions produces a vibrant, efficient and mutually beneficial exchange of talent," the group said.

"The shared approach, style and skills between Australian and UK accountancy professions are vital to growing exports and investment in both directions. Yet realising these benefits is dependent on accountants being recognised overseas.

"Although the final text of the agreement has yet to be finalised, we are confident it will facilitate greater movement of accounting professionals, transfer of specialist knowledge and innovation, and certainty for skilled accounting professionals." 

Chartered Accountants ANZ chief executive Ainslie van Onselen said, “This deal provides the opportunity for accounting professionals to work across UK and Australia to gain the global experience and diversity of thought that is essential for better outcomes for their clients and strong commercial growth as we bounce out of COVID.

“Given the profession is bound by international accounting, auditing, education, ethical and potential sustainability standards, this announcement will spark the ambition for accountants to use their mutually recognised qualification to widen their global perspective which will enhance the societies and the economies of both countries.”

CPA Australia CEO Andrew Hunter said, “Accounting is a global profession and we are a global organisation. This agreement has the potential to make it easier and simpler for our members to work in the global economy. We’re pleased to have had the opportunity to advocate for this outcome for our members.”

IPA CEO Andrew Conway said, “The Australia-UK Free Trade Agreement provides an enhanced framework to support our global profession. We have an opportunity to build the very strong relationship that exists between our countries and enable a strong focus on a sustainable profession supporting businesses through the global pandemic and beyond.”

In 2020, Chartered Accountants ANZ, CPA Australia and IPA made a joint submission to the Department of Foreign Affairs and Trade in support of a comprehensive FTA between Australia and the UK.




Rabobank: global and local factors driving record beef prices worldwide

A COMBINATION of global and localised factors is creating a “very tight” global beef cattle market – with strong demand and record high prices in many regions throughout the world – according to a new Rabobank report

This is coinciding with a fundamental shift in international market dynamics, Rabobank researchers found.

In its Q2 Beef Quarterly, Rabobank said so tight was the global beef market that localised disruptions – including droughts and increases in consumer demand in individual countries or regions – are now exerting a much more “dramatic impact” on global trade.

“Given the growth in demand (for beef) and global trade, pressures created in the system now mean that what may once have been considered slightly-abnormal seasonal conditions (for example) are now causing major shifts to markets,” the report said.

Report co-author, Rabobank senior animal proteins analyst Angus Gidley-Baird said the local drivers that are fuelling high beef and cattle prices in individual countries – such as post-drought herd rebuilding in Australia and a re-opening food service sector in the US – will eventually correct and cause an adjustment in prices. 

“However, with the tight global supply situation – underpinned by Chinese demand which is expected to remain firm – we believe the global market has seen a fundamental step up,” he said.

Local drivers and not-so-local

The report said the main localised drivers around the world currently impacting the global beef market included strong demand-driven beef prices in the US, seasonal delays to the Brazilian cattle slaughter and reduced supply in Europe.

For the US, Mr Gidley-Baird said, the country’s beef sector was squarely in a demand-driven market, with April 2021 wholesale prices 18.5 percent higher than the same time in 2019 (providing a comparison prior to 2020’s COVID-driven supply disruptions and panic buying), while retail prices were 11.5 percent higher.

“This is the result of a number of factors,including renewed competition between food service and retail triggered by the reopening US economy, combined with grilling season, all-time high consumer incomes and strong exports,” he said.

For Brazil, a delay in seasonal rainfall had seen lower cattle supplies available, forcing processors to push up cattle prices and keep supply flowing, particularly given the demand from the import-hungry Chinese market. 

Across the EU, there were reduced cattle supplies – reflecting low profitability seen in the sector there last year due to the impacts of COVID.

“EU beef carcass prices have been firming since quarter four 2020, with the average EU beef carcass price currently up seven per cent on the same period last year,” Mr Gidley-Baird said.

In China meanwhile, the report said, slow growth in domestic beef production – which has not been able to keep up with the local growth in consumption triggered by the substitution of beef for pork during the outbreak of African swine fever – had led to rising beef imports in past years.

“While part of the beef consumed was a substitute for pork and will shift back when pork production recovers, we expect strong Chinese beef demand to remain as new markets have been established,” Mr Gidley-Baird said.  “This will continue to drive Chinese beef imports from the global market.”


The record low cattle supply in Australia has also been feeding into the tight global market, the report said, with successive years of drought and large livestock liquidation having resulted in the country’s lowest beef cattle herd in 30 years.

Australian young cattle prices had jumped almost 30 percent year on year in February 2020 and since risen another 20 percent to February 2021, the report noted.

Mr Gidley-Baird said the cattle price increases had been significantly driven by improved seasonal conditions in 2020 which were carrying into the current year. These had seen intense buying competition by producers looking to restock properties and generate value out of increased pasture production.

“While lower volumes and higher prices make competing in the global market more difficult, the tight market situation is working in Australia’s favour and creating less resistance to our high prices,” he said.

“We believe that current cattle prices in Australia will ease as cattle numbers increase and producer demand dissipates.  However, as the supply chain overcomes the disruption here and consumers adjust their price expectations, we believe the market will adjust and a new baseline will be established.”

Pendulum swinging

In an indication that the Australian sector might be beginning to see producer demand for cattle ease, the balance of buyers in the weaner cattle market is starting to return to normal, the report said.

“The pendulum appears to be swinging, with a more normal balance beginning to return, with producers dropping back and feeders taking a more active share of the market, seeing a greater percentage of cattle heading to feedlots,” Mr Gidley-Baird said.

“Compared with last year, when producers were the largest buyers in the ECYI (Eastern Young Cattle Indicator) weaner category for many months, the first three months of 2021 has seen them occupy on average 39 percent of the market, with (lot) feeders at 50 percent,” he said.

Producers were, however, still paying premiums – of about six percent – above the market average.

“This continues to support cattle prices,” Mr Gidley-Baird said.

Numbers tell the story

Australian cattle slaughter numbers remain very low, the report said, with the east coast cattle slaughter for April 2021 down 30 percent on the same period last year and 31 percent on the five-year average.

Beef exports also remained low, reflecting the lower production levels.  April 2021 exports – of 72,502 tonnes shipped weight (swt) – were down 22 percent on the previous year and 11 percent on the five-year average. 

Higher prices and a different product offering, with less cull cows in the system, had seen Australian exports shift focus slightly, the report said.

“The share of total Australian beef exports going to China dropped from 24 percent in 2019 to 17 percent year to date and the share going to the US declined from 20 percent to 15 percent in the same period.  Meanwhile, volumes to Japan and South Korea lifted slightly for the first four months of 2021,” Mr Gidley-Baird said.


Email: This email address is being protected from spambots. You need JavaScript enabled to view it.                                        Email: This email address is being protected from spambots. You need JavaScript enabled to view it.

Copper is the new 'green' resource says Qld Resources Council

COPPER's surging popularity as a critical component in 'green’ technology is behind a 62 percent increase in exports of the in-demand commodity, the Queensland Resources Council (QRC) said today.

According to the latest trade data from the Australian Bureau of Statistics, it is the second successive month Australian copper ore has attracted above $4.50 per kilogram. This price strength is demand driven, as green technologies are significantly more copper intensive. 

QRC chief executive Ian Macfarlane said Australia’s March overall exports had grown by 15 percent on the previous month to reach $5.18 billion.

“Queensland’s resources sector accounts for 80 percent of the state’s total exports, so this is a great result,” Mr Macfarlane said. 

Mr Macfarlane said the latest monthly trade figures show a 12 percent jump in the value of LNG exports and 9 percent rise in the value of coal exports.

“This is great news for coal and gas companies across Queensland that produce these commodities and for the communities in which they operate and the people they employ,” he said.

“Commodity cycles will always fluctuate, but Queensland’s strength is we have a diverse and abundant base of the traditional and emerging commodities the world needs right now, and a skilled domestic workforce that’s been able to keep operating safely and consistently during the global pandemic.”


Contact Us


PO Box 2144