BLOG: Food crisis in 2023 may represent major threat to developing-world polymers demand

SINGAPORE (ICIS)–Click here to see the latest blog post on Asian Chemical Connections by John Richardson.

As the developing world confronts a major food crisis, expected to reach a critical point next year, polymers demand is of course hardly the most important issue. But the purpose of the blog is to support planning by chemicals and polymers companies – and the buyers of chemicals and polymers.

A crucial factor in successfully navigating the multiple crises we face is making the right production and sales decisions, based on demand scenarios. The right decisions will make or save you many millions of dollars.

To this end – combining the knowledge of the ICIS fertilizer team, which points toward the food crisis getting worse next year, with the ICIS Supply & Demand Database – the blog has drawn-up a scenario where –

• Instead of high-density polyethylene (HDPE) demand in the developing world growing by 800,000 tonnes in 2023, the ICIS base case, it contracts by 300,000 tonnes.
• This would result in next year’s global demand growth for HDPE being at 2% rather than 4%.

These alternative outcomes are for demonstration purposes only, as they don’t involve the essential deep dive into country-by-country complexities.

Factors include income distribution patterns (the greater the number in any given country near the extreme poverty level, the bigger risk to petrochemicals demand in general), the strength of government finances and the scale of a country’s commodity exports (countries with big exports of commodities are likely to be in stronger positions because of high prices).

This is much more granular demand forecasting than we have been accustomed to. But, as we said, we believe that this kind of work will help define your success or failure.

Editor’s note: This blog post is an opinion piece. The views expressed are those of the author, and do not necessarily represent those of ICIS.