SAO PAOLO (BLOOMBERG) – The world really doesn’t need more toilet paper problems. But sadly, the largest producer of wood pulp – the raw material for products, including toilet paper – is warning that the global shipping container crisis could start to create supply problems.
Suzano SA mainly ships its paste in freighters known as break bulk. With the surge in demand for ships carrying ribbed steel containers, compression is starting to spread to break up bulk and threatens to delay the company’s shipments, CEO Walter Schalka said in an interview.
Of course, this is happening at a time when the demand for residential toilet paper has increased dramatically and consumers have started stocking and buying in panic. Schalka worries the shipping issues will snowball and get worse from here. Significant disruptions in the pulp trade could potentially impact the supply of toilet paper if producers do not have sufficient stocks.
Sao Paulo-based Suzano is already concerned about the risk of exporting less in March than expected and having to postpone some shipments to April, Schalka said. With increasing competition for freighters, break-bulk freighters dock less often than usual at the company’s terminals.
“All South American players who export in bulk have faced this risk,” he said.
Brazil is the world’s largest supplier of pulp, and Suzano accounts for about a third of the world’s supplies of hardwood pulp, the type used to produce toilet paper.
Disruptions in the freight market are wreaking havoc on global trade, especially in food and agricultural products. Port traffic increased, freight costs increased and deliveries slowed.
The container crisis, triggered by huge demand from China, has been playing out for months. But Suzano’s warning is among the first major signs showing the spillover into other shipping markets. While compression continues to increase freight costs, it also raises the specter of accelerating inflation.