A lot of companies are reporting logistics costs and delays in FY22 results. Here's an update from Statista.com on global container shipping. (Note: signfiicant differences depending on the route).
Oil & Gas are obvious ones. But I think there are a few right tail risks that are increasingly likely to happen:
1) Siberian oil production gets shut out, as western expertise leaves, and oil stores fill. When these wells get shut out, they remain offline for many years. Satellite analysis indicates Siberian oil production dropped 10% in March.
2) Oil pipeline from Russia to Germany passes through Belarus. This is likely to be taken out by Ukraine at some point, and eventually, Europe will source alternative suppliers. .
3) The black sea will be closed to Russian shipping. Oil from Kazakstan is shipped through Russia to the Black sea, and it now cannot be exported once the black sea is closed.
4) Far East oil fields serve Vladivostock terminal and China via pipeline. The problem with these oil fields are that they are run by western oil companies, such as Shell. Theses fields require very specialised engineering capability, which is now gone with the Western companies. The far eastern oil field production will decay over time without the technical expertise from the West.
5) If oil prices increase, the US may ban exports of oil, capping US oil prices, but further reducing global supply. If this occurs - all bets are off.
If the above occurs - +$150 USD / barrel is on the cards.....
As a point of interest .... mushrooms are levied very heavily by Dept of Agriculture, Water, Environment.
I don't see how producers can afford $4/kg levy on mushrooms (taxable on the first 370,000 kilos)
Comparing to Other Industries
- Dairy Produce Levy = 10cents/kg
- Farmed Prawns = 6cents/kg
- Banana = 2cents/kg
- Wine grapes = $200 + 0.5cents/kg
- Forestry logs = 5.5cents/cubic metre
- Mango = 1.8cents/kg
https://www.awe.gov.au/agriculture-land/farm-food-drought/levies/commodities
I guess that creates a barrier to entry for wannabe mushroom producers, as you would need economies of scale to be able to absorb that sort of ridiculously high levy.
You'd think a government website would not have such an obvious error in it; after all, we all know June 30 marks the end of the financial year, we shouldn't need to do any nursery rhymes in our heads to work out how many days June has...
Those much lower levies on Bananas and Mangoes look way more reasonable. Can't say I understand that Mushroom levy at all. I wonder what all that money going into Marketing and R&D on mushrooms is resulting in - apart from the occasional TV ad campaign - like this, this, and this. And of course their social media presence - like this: Australian Mushrooms - Australian Mushrooms TVC | Facebook. But the R&D levy - what is that producing? At over $1/Kg just for R&D, it would add up to a fair bit annually.
I'm suspecting the Aluminium market is under the radar at this time. Price of Aluminium at all time low.
- China has reduced purchase of Alumina (Covid shutdowns) leading to price fall but it should come back again
- Unstable supply of Aluminium from Russia/Ukraine Aluminum
- Aluminum is used in just about every eco technology (see McKinsey graph below)
- Not pictured in the graph is the demand for batteries for other devices separate from EVs - laptops/mobiles/tools, Edge and Internet of Things devices
Disc: I own Alumina AWC