With so much going on in the world right now, it’s inevitable that current events are having—and will continue to have—an influence on the spice and ingredient market. In our latest blog, our senior purchasing manager and expert in the ever-changing market conditions, Justin Silvia, offers his insights into how exactly current events are shaping the market.
From national policy and inflation to international conflicts, several economic and political factors have significantly impacted the spice and ingredient market. Various current events have contributed to shortages, shipping delays, and pricing changes across the industry. While some of these events will have short-term impacts, others are bound to influence the market for years to come. Keep reading for a closer look at how current events are shaping the spice and ingredient market and what we expect to see in 2025.
Tariffs
U.S. tariffs were a hot topic during the Trump campaign and are now expected to become a central policy tool for the new U.S. administration. Tariffs are being used as a mechanism for public negotiation, and what will go into effect remains to be seen. From what we know so far, it looks like tariffs could be universal on all imports or focused on a competitive country or region, such as China or Mexico. This uncertainty keeps the market on its toes, as businesses and consumers alike wait to see how these policies will unfold and impact prices and availability.
Inflation
Inflation has been top-of-mind for many U.S. consumers and economists. The effects of inflation over the last few years are being felt across the supply chain, and prices are currently remaining elevated. Although there is some uncertainty given current economic conditions, the projected annual CPI U.S. inflation rates range from 2.2% to 3% for CY2025, and oil prices are expected to rise 2% to 4% in 2025.
Union and Labor Issues
North American ports are still presenting lingering labor issues that could cause disruptions. The International Longshoremen’s Association’s (ILA)
negotiations with East Coast port officials have been cut off over automation and benefits issues, and the two sides have until January 15th to come to an agreement. Canada’s government has been intervening with binding arbitration to end port shutdowns. These labor disputes are more than just headlines, as they could cause significant impacts on the flow of goods. October/November port congestion and delays were the worst two-month stretch since July/August of 2022, highlighting the ongoing challenges in maintaining a smooth supply chain.
Issues Overseas
The world may seem large, but conflicts or shortages oceans away can have a major impact on global markets. For example, conflicts in Eastern Europe and the Middle East will continue to affect many industrial sectors and freight movement throughout the globe. Additionally, Eurozone industrial activity is slowing, and layoffs are increasing due to spiking energy costs, weak demand for key exports, and unfavorable climates. These international issues create a ripple effect, influencing everything from the cost of raw materials to the availability of finished products, and reminding us just how interconnected our global economy truly is.
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