As disruptions to the supply chain continue to worsen ahead of the winter holidays the big question being echoed around the world is how long could this possibly continue?
Buyers continue to hope that we have finally reached a peak. Surely, prices can’t continue to go up. Suppliers continue to warn that the worst is, in fact, yet to come.
While there are many reasons for suppliers to insist on increasing prices, only one forces customers to change their method of procurement: availability. Buyers are shifting from just in time procurement, which optimises for lower costs, to just in case. The focus now is on maintaining enough stock to supply customers through volatile times.
This forces buyers to sign longer contracts, place bigger orders, and buy spot at unpredictable prices. Until the supply chain adjusts itself to this move toward just in case procurement, we’ll continue to see price volatility happen across all products in the feed formulation.