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Consumers Stepping Back; Ukraine Exports Grain; Seeking Jet Parts
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At Best Buy, shoppers are cutting back purchases of electronics. EMILY ELCONIN/BLOOMBERG NEWS
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The consumer spending that has fueled U.S. economic growth and high demand for goods shipments is starting to crack. Some big retailers and consumer-goods suppliers say they are seeing signs that shoppers are increasingly strained by high inflation. The WSJ’s Annie Gasparro and Theo Francis report that Unilever, Procter & Gamble and Kraft Heinz are bracing for consumers to either cut back or shift to lower-priced products in a wavering American economy. Each reported lower quarterly sales volumes, meaning people purchased fewer brand items amid higher prices. That’s triggering a shift in consumer-focused supply chains, as consumers switch to private-label
store brands for essentials. Consumers are also pulling back spending on electronics, apparel and housewares as groceries, rent and gas strain their paychecks. Walmart and Best Buy warned that steeper pullbacks in spending could start crimping profits, suggesting bigger adjustments to retail supply chains could be coming.
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The Sierra Leone-flagged Razoni departed Ukraine’s Odessa port today. PHOTO: TURKISH DEFENCE MINISTRY/AGENCE FRANCE-PRESSE/GETTY IMAGES
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Ukraine shipped out its first grain shipment in a high-stakes test of the agreement with Russia to create a safe corridor for grain shipments through the Black Sea. A bulk vessel departed the Port of Odessa today carrying 26,000 metric tons of corn headed for Tripoli, Lebanon, the WSJ’s Matthew Luxmoore and Jared Malsin report, launching an effort aimed easing a looming global food crisis. The shipment is the first test for a deal agreed last month to allow Ukraine to begin shipping some 18 million metric tons that Russia’s invasion in February has trapped in the country. The deal would bring critical income to Ukraine as its economy buckles and will provide new ballast to a dry-bulk shipping
sector that has been operating under enormous uncertainty. In addition to grain that’s been held up in storage, some 65 million tons are expected from this summer’s harvest.
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Russia unleashed heavy artillery barrages on Ukraine’s port city of Mykolaiv, and the owner of one of the nation’s top agricultural companies was among those killed. (WSJ)
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Ship broker Braemar says the start of grain shipments out of Ukraine will put a premium on charters of smaller bulk vessels. (Lloyd’s List)
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Low water levels on the Danube River are hindering waterways shipments from Ukraine. (Hellenic Shipping News)
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India’s Sunvin Group has purchased up to 60,000 metric tons of Ukrainian sunflower oil in a vote of confidence in the new Black Sea agreement. (Maritime Executive)
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Some ships in Ukraine’s Port of Odessa have been docked for months. PHOTO: DAVID GOLDMAN/ASSOCIATED PRESS
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The world’s largest agriculture companies expect global crop supplies to remain under pressure even as grain prices fall. The combination of Russia’s invasion of Ukraine and bad weather in big crop-producing regions is fueling a supply crunch, the WSJ’s Patrick Thomas writes, while suppliers including Archer Daniels Midland and Bunge say the world’s appetite for agriculture products such as cooking oils and soybean meal for livestock feed remains robust. Prices for agricultural commodities including corn and wheat have fallen in recent weeks, along with a big drop in the Baltic Dry Index that measures shipping rates for seaborne bulk goods. Commodity prices remain at elevated
levels, however. ADM CEO Juan Luciano says it’s difficult to get enough fuel and to recruit crews for larger ships, and insurance costs for the voyages are also high, potentially making it hard to secure financing for larger transactions.
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Canadian National Railway is adding hundreds of high-capacity hopper cars in anticipation of a rebound in grain shipments. (Dow Jones Newswires)
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A Lufthansa Technik maintenance hangar in Frankfurt, Germany. PHOTO: ALEX KRAUS/BLOOMBERG NEWS
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A rebound in airline passenger travel is colliding with global supply-chain troubles. Airlines are increasingly hard-pressed to find engines and other spare parts to keep their planes flying, the WSJ’s Andrew Tangel and Benjamin Katz report, leading to delays and flight cancellations that are complicating carrier attempts to capitalize on resurgent travel demand. That push by customers to get back in the air has caught aircraft manufacturers off guard, leaving parts makers unable to increase production quickly enough to provide components both for new aircraft and for planes already in service. The aviation sector strains are one sign of how supply chains have struggled to keep up with quick pivots in demand
during the pandemic, adding new financial concerns at businesses as they try to adjust their operations. Responding to market conditions is difficult because parts shortages have left aircraft idled for longer periods in heavy maintenance checks.
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770,641
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International containers moving in North American intermodal operations in June, down 6.3% from last year and up 1.2% from May, according to the Intermodal Association of North America.
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