Trade Data Proves We're Obsessing over Flu Fighting

I'll admit, there aren't that many bright spots on the global trade front these days (although I will concede the protectionist rhetoric coming out of Washington appears to have calmed down in the past couple of weeks). But one area where the US obsession with sanitation is helping driving record imports is in the hand sanitizer category. Recent Panjiva trade data shows "there's been a massive spike in shipments of hand sanitizer to U.S. companies". Specifically, "in the third quarter of 2009, there were 128 waterborne "hand sanitizer" shipments to the United States -- compared to 56 shipments in the third quarter of 2008". Panjiva suggests that on a weight basis -- I'm guessing hand sanitizer weighs out vs. bulks out -- this represents "a threefold increase in the amount of hand sanitizer shipped in the third quarter of 2009 -- compared to the third quarter of 2008".

While I think it might be dangerous to read too much between the lines of this information -- after all, even the least worrisome parents these days are stocking up on anything and everything to fight germs and the flu -- I do see an interesting pattern here. And that's the fact that companies are turning to global sources of supply these days not just to save money, but because capacity and availability in supply markets are driving organizations to offshore sources. With the steep drop in the dollar in recent months, companies will predicate more and more global sourcing decisions on factors other than just cost.

As for me, I can vouch for the fact that we've been part of the demand signals telling retailers to order more sanitizer, setting up a cascading effect in the supply chain (call it a real-life beer game for clean freaks). We're as guilty of stockpiling the stuff as Iran and North Korea are of hiding their nuclear weapons programs. Granted, given that the Swine flu has just started to spread aggressively in our kid's classes at school, there's no proof yet that our arsenal will end up doing any good. But like many others, I get some satisfaction and my pulse drops ever so slightly every time I rub the stuff on my palms. Still, I'd bet given our current inventory levels -- regardless of its ultimate efficacy -- that retailers might be left holding too much stock on hand after the flu scare is over (which many sources appear to be forecasting to peak in North America in the final days of October).

Jason Busch

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