Exportation

« Older Entries
January 13th, 2012

Why an oil spike is inevitable and how to prepare for it

The recent economic turbulence around the world has slowed oil price increases, and this is expected to continue into 2012. However, in the long term, as the global economy recovers, oil demand is likely to grow faster than supply. According to a special feature in the November 2011 issue of the McKinsey Quarterly (http://www.mckinseyquarterly.com/Another_oil_shock_2873), at the rate things are going, an oil shock, characterized by high, volatile prices, is quite possible in the years ahead. Business leaders need to take this very seriously.

The fact is that current incentives to cut energy consumption and the move toward greener energy sources will not be enough to slow the growth of global demand for energy. On the supply side, the increase in output is not expected to be enough to meet demand because of the technological challenges and massive investments required to exploit new energy sources. Since supply will barely meet demand, expect to see oil prices climb sharply down the road, which will have a major impact on the world economy.

The price hikes will likely affect economic growth by sapping consumption and international trade and encouraging consumers and industry to implement measures or change their energy consumption habits. As such, McKinsey forecasts that supply and demand will again become balanced but not before 2020 because of the time it will take to make these adjustments and the lag between their implementation and their real impact on oil demand.
(more…)

December 16th, 2011

The peasants of the digital era

I recently read an article in the French magazine Les Affaires whose title caught my eye. Roughly translated, it was “The media and Internet have turned us into peasants of the digital era.” I encourage you to read this very interesting piece, which interviews Marina Gorbis of the Institute for the Future, a think tank in Silicon Valley.

I was especially struck by her recommendation to people looking to open their minds to gain a better sense of what the future holds. Here’s what she says: “Find a friend whose life is completely different from yours, someone who was born abroad and has different values. Step into different worlds that have nothing to do with your company.”

This statement reminds me of a comment made not long ago by Genacol CEO Guy Michaud  at a conference. Michaud was trying to drive home the point that Quebec business owners absolutely have to go see what’s happening elsewhere in the world, especially in China, so they can truly understand what globalization means, just how incredibly fast some markets are changing, and above all, to come to terms with the fact that our society and companies have to go global to survive. This message was directed at entrepreneurs but also at all the professionals who work with them. (more…)

December 16th, 2011

Exporters, are you still optimistic about 2012?

Last May I published a blog about renewed enthusiasm for exports. Unfortunately, the economic news have been anything but good since then: the financial crisis has deepened in Europe, U.S. unemployment is at a standstill, the financial markets are collapsing, the U.S. is again contemplating a “Buy American” clause in its new recovery plan, a double-dip recession is a growing possibility, the Canadian dollar is anything but stable, and the list goes on. It’s hard to be optimistic these days.

I was therefore rather surprised to read the EDC’s fall 2011 global export forecast in which Peter Hall and his team maintain their bullish spring outlook for Canadian exports for both this year and next. EDC predicts, among other things that “the world economy will capitalize on the current increase in underlying activity, and continue to find remedies for the shocks and weaknesses that beset near-term growth, tiding the economy through to better times” (page 5). As such, EDC is projecting positive growth for global GDP and for Canadian exports in 2011 and 2012. Thus, Canadian exports will increase by 12% in 2011, the same as in 2010, and 7% in 2012. The figures for Quebec are 4% for this year and 7% in 2012. (more…)

November 1st, 2011

Understanding the mechanism of the letter of credit

In a recent article (http://www.cqinternational.org/index.php?page=118), our colleague Liliana Salazar, export advisor at Carrefour Québec International, talks about a tool that most exporters know, but that is not always understood: the letter of credit. As she explains in her column, the letter of credit is an “arrangement between financial institutions for the settlement of a transaction against presentation of stipulated documents and within a prescribed period. This regulation ensures the exporter the settlement of the transaction once it has demonstrated, with supporting documentation, that the goods have been delivered to the client abroad.”

In an environment where companies are turning increasingly to less developed, and therefore more risky, markets for their exports, the letter of credit is a very interesting tool to make sure of being paid. In addition to explaining the mechanism, the article outlines the various benefits of the letter of credit for both the exporter and the importer.

Bruno Seguin

October 12th, 2011

The role and impact of regional trade promotion organizations (ORPEX)

In June, the Quebec export commissioners network (RECOMEX) made up of 16 regional trade promotion organizations (ORPEX) across Quebec, such as the LAVAL TECHNOPOLE International Business Centre, published its annual report. Born of its members’ desire to share their expertise and networks of international contacts, RECOMEX has become “a regional force for SMEs that want to go global.” Here are a few of the 2010-2011 results presented by RECOMEX for ORPEXs: (more…)

« Older Entries