We don’t know what the long-term consequences of Brexit will be. But it’s already had an effect on the UK’s trade with the world.
Most importantly, there’s been a big drop in the value of the pound. Historically, that’s made imports from outside the UK relatively more expensive. And some manufacturers have already responded - by reducing the servings size of their products, for example. But there are some benefits too, a weaker pound means that exports from the UK are more appealing to overseas importers.
At Stowga we’re collecting data on the import and export of goods in the UK, so we can predict future demand, and adjust prices to get the best deal for both customers and warehouses. It also means we can see the impact Brexit has already had. So here are a few commodities we found particularly interesting, and why we might have seen seen such large changes in volume.
It’s not surprising that as luxury items become more expensive to import, volumes fall. Old stamps are a prime example. And while it’s true that investors are looking to stay out of the currency market, they usually prefer to stick to “safer” commodities, like gold and semi-precious metals.
Note: This graph may not look like anything earth-shattering, but it’s plotted with a logarithmic scale (on the y-axis). That means that at each “tick”, the volume goes up by a factor of 10. So if there are two ticks separating the lines, the volumes differ by a factor of 100. (We had to use a logarithmic scale as the changes are so large.)
Equipment for keeping Poultry
The falling pound means importing machinery has become more expensive. But so has importing end-products (like chicken and eggs). So suppliers are bringing in equipment to produce more poultry in the UK.
Over the three months, the tonnage of equipment imported went from around 1,000 tonnes to over 10,000 tonnes.
Because food has a limited shelf life, it’s one of the first commodities to respond to the change in currency valuation. Exports of hake have gone up massively in the months following Brexit, with a 10,000% increase on the 7-year average in September. It’s likely that buyers from the EU are behind that, as hake becomes cheaper than other fish elsewhere. Mushrooms, truffles and wheat have seen similar gains.
We’d normally expect to have around 5 tonnes of hake exported at this time of year. But in 2016 we exported over 500 tonnes.
Coconut Oilcake……yummy but a commodity you’ve probably never seen before
The Curious Case of Coconut Oilcake
Coconut oilcake is a commodity which is primarily used to feed livestock. Imports went up significantly in the months after Brexit, which seems odd, because it can’t be processed into anything else.
We asked: is it because there’s now more livestock in the UK? It doesn’t seem so.
Perplexed, we looked at the export data. Exports of coconut oilcake have gone up too, with a lag of a few months. Why would both imports and exports go up?
It could just be that importers over-ordered, and were forced to resell the excess overseas.
Or maybe the oilcake is shipped into the UK from overseas, and then repackaged and exported elsewhere. By why exports would go up by more than two orders of magnitude still isn’t clear.
We’ll keep studying the numbers to try to get to the bottom of this mystery.
Meanwhile, whatever the ups and downs of Brexit, we’ll be using our data to find you warehouse space at competitive prices, whether you need storage for a couple of weeks or a year. All you have to do is fill out a form, then sit back and wait for us to do the work.