“You have to be prepared,” Maersk tells customers about Red Sea service

Danish group Maersk informed its customers in a statement on Tuesday that they should prepare for disruptions in the Red Sea to extend into the second half of the year and provide for longer transit times in their supply chain planning.

Major container shipping lines have switched ships bound for the Suez Canal to the longer route around the Cape of Good Hope in Africa following attacks on shipping by the Houthis in the Red Sea.

“Know your best alternative for entering the North American market and be prepared to have mitigations in place,” Maersk’s regional president for North America, Charles van der Steene, said in a statement.

“Start quantifying and preparing to mitigate changes in your supply chain costs,” he added.

Maersk has increased its vessel capacity by 6% to compensate for delays due to longer transit times through Africa.

(Reporting by Louise Breusch Rasmussen; editing by Stine Jacobsen; Spanish editing by Javi West Larrañaga)

China consumer prices plunge at fastest rate for 15 years as deflation fears deepen

Kalyeena Makortoff and Graeme Wearden

Last modified on Thu 8 Feb 2024 20.31 GMT

Plummeting food prices feed steep annual drop amid renewed calls to stimulate economy and offset weakening demand

China’s consumer prices fell at their fastest pace in 15 years in January, as the world’s second-largest economy sank deeper into deflation amid weakening demand.

Data released on Thursday showed that China’s consumer price index tumbled last month, falling by 0.8% compared with a year earlier. It marks the fourth consecutive month of declines, as well as the sharpest drop since September 2009, when the global economy was still grappling with aftershocks from the 2008 banking crisis.

Food prices were the biggest drag on the headline inflation figure, having fallen by 5.9% on an annual basis, due in part to a 17% slump in pork prices. Fresh vegetables fell by 12.7%, while fruit dropped by 9.1%.

China’s economy has been struggling to recover from the Covid-19 pandemic after restrictions were lifted in late 2022. It has also been dealt a significant blow by the contraction in its indebted property sector, leading to the developer Evergrande being ordered to liquidate last month.

China’s economy first entered deflation last summer, with prices falling at a faster pace since then. Its factories have also cut prices, with the latest producer price index pointing to a 2.5% drop in annual prices in January, after a 2.7% fall in December.

However, ING’s chief economist, Lynn Song, said it was worth noting that the latest data may be skewed due to the fact that lunar new year falls in February, rather than January, this year. It means that household demand for food such as pork could bounce back once next month’s data takes the holiday season into account.

“While a far cry from the above-target inflation levels seen in many other economies, these numbers do not imply China is stuck in a deflationary spiral,” Song said.

“Considering the more favourable base effects for February’s data, we see a high likelihood that January’s data could mark the low point for year-on-year inflation in the current cycle,” she added.

However, the prospect of fresh economic stimulus from Beijing to counter weaker demand was enough to send Chinese stocks higher on Thursday, with the Shanghai Composite rising by nearly 1.3%.skip past newsletter promotion

“While a very concerning sign for China’s economy, which could be becoming entrenched in a debt and deflation cycle, the markets arguably responded in a positive way to the news,” said Kyle Rodda, senior financial market analyst at capital.com.

“Perhaps markets see the terribly low number as a potential catalyst for more muscular monetary or fiscal stimulus from the central government, which, up until this point, has been moderate in applying countercyclical policy.”

https://www.theguardian.com/business/2024/feb/08/china-consumer-prices-plunge-at-fastest-rate-for-15-years-as-deflation-fears-deepen