5 . GLOBAL TRENDS IN TRADE - SUPPLY CHAIN DISRUPTIONS CONTINUE
It ’ s clear we ’ re seeing some pretty challenging times with global supply chain disruptions . The Global Supply Chain Pressure Index prepared by the New York Federal Reserve is currently showing the highest level of disruption ever recorded .
Supply chains are stuck , impacted by capacity challenges driven by a world economy that is coming back to life after two years of relatively low levels of activity . This is making things more expensive and difficult to obtain . This is flowing on to prices , and may trigger an earlier than hoped interest rate increase .
For the agricultural sector , it ’ s particularly challenging at many stages of production . High freight costs are making inputs to production more expensive , as well as forcing up prices of agricultural products . Perishable items such as horticulture are not only getting hit by difficulties in finding labour but also by difficulties in delivering their products . Urea , a major input to fertiliser , is becoming very expensive not just because of supply chain problems but also because of a ban by China of exports to Australia .
At this point , it ’ s difficult to estimate when supply tangles will unwind . Unfortunately , most predictions are for continued challenges for most of 2022 .
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