Distillers (DDGS) has continued to show modest price strengthening, despite OPEC’s recent decision to follow through with the planned oil production increases among member countries and allies (OPEC+).
Also, rising Covid infections worldwide, including in the U.S., are not tightening the pandemic tourniquet on travel or oil demand by much. China, however, may be a wild card as it adheres to a “zero Covid” policy and tight controls on travel during the Chinese New Year holidays starting at the end of January.
Because of a single case last year, the Chinese shut down a key terminal at the world’s third largest port. This policy has become one of the biggest reasons analysts believe supply chain disruptions are likely to persist into mid-2022.
Actionable insight: Keep on the lookout for signs of softening travel and oil demand, which may accelerate Distillers pricing. And watch how China handles Covid control this month and next, which can impact global supply chains and prices of key micro ingredients.
