UK Markets close in 3 hrs 40 mins
  • FTSE 100

    -83.38 (-1.19%)
  • FTSE 250

    -165.16 (-0.73%)
  • AIM

    -7.45 (-0.60%)

    -0.0023 (-0.20%)

    -0.0007 (-0.0489%)

    -572.91 (-1.41%)
  • CMC Crypto 200

    -35.29 (-2.72%)
  • S&P 500

    -22.21 (-0.53%)
  • DOW

    -123.04 (-0.36%)

    +0.17 (+0.27%)

    +3.70 (+0.21%)
  • NIKKEI 225

    -584.99 (-1.97%)

    +29.58 (+0.10%)
  • DAX

    -139.05 (-0.90%)
  • CAC 40

    -90.21 (-1.43%)

Container crisis could mean more toilet paper woes

Saleha Riaz
·3-min read
The CEO of the world's biggest producer of a key raw material in toilet paper said is worried significant disruptions to the pulp trade could impact supplies. Photo: Getty
The CEO of the world's biggest producer of a key raw material in toilet paper said is worried significant disruptions to the pulp trade could impact supplies. Photo: Getty

Stockpiling toilet paper at the start of the pandemic led to a global shortage of the product, and this could happen again amid a surge in demand for containers and ships that carry a key raw material.

A company in Brazil called Suzano is the world’s biggest producer of wood pulp, which is the raw material used in toilet paper.

Suzano primarily ships its pulp in cargo vessels known as break bulk. "With demand surging for ships that carry ribbed steel containers, the squeeze is starting to spill over to break bulk and threatens to delay the company’s shipments," CEO Walter Schalka said in an interview to Bloomberg.

With competition increasing for cargo vessels, break-bulk ships are berthing at the company’s terminals less often than usual, the report said.

Schalka “is concerned that the shipping problems are going to snowball and only get worse from here. Significant disruptions to the pulp trade could eventually impact supplies of toilet paper if producers don’t have ample inventories," the report said.

WATCH: This foam takes regular toilet paper to the next level

READ MORE: Suez Canal could be blocked by 'beached whale' tanker for days

One retail executive had earlier said that for non-perishable goods, there is typically about three to four weeks of inventory in the supply chain.

Suzano is also concerned about the risk of exporting less in March than the company had expected, and being forced to roll over some shipments into April.

Al Jazeera had earlier noted that "the world’s biggest makers of shipping containers are scrambling to meet a surge in demand for the metal boxes that shuttle some 90% of the goods around the global economy."

It said a trade boom in the second half of 2020 caught producers by surprise as the pandemic threw the existing supply of about 25 million boxes off their normal routes.

"The manufacturers have been ramping up output ever since, but they’re unable to alleviate shortages that have underpinned soaring freight rates for six months," it said.

Meanwhile Bloomberg said the container crisis is not new but Suzano’s warning is among the first major signs showing the spillover into other shipping markets.

"If the squeeze continues to increase freight costs, it also raises the spectre of accelerating inflation," it said.

Toilet paper made headlines last year when there was a severe shortage of the product, as governments around the world announced lockdowns to curb the spread of the coronavirus and people in panic began stockpiling groceries.

Supermarkets even enforced purchasing limits on toilet paper. Shoppers shared photos on social media in Britain and elsewhere of empty shelves in shops for in-demand goods, with #toiletpaperpanic trending on Twitter at one point. Health and cleaning products, toilet roll and long-life food and drink appear in particularly high demand.

WATCH: What are freeports?