Good morning.

A recent outbreak of bird flu has been detected in mammals raising concerns that a variant of the H5N1 virus could eventually infect humans. The chances of this are slim but it’s a good reminder to review plans nevertheless. Meanwhile, the metrics are a mix of extremes: wheat and iron and steel are at some of their highest prices for the 90-day period, while shipping and the VIX are at their lowest. Oil is relatively low but has been fluctuating recently.

Folks in Cyprus, Monaco and Ecuador all head to the polls this weekend. And, on that note, enjoy your weekend and we’ll be back on Monday.

Bird Flu Reminder 

Currently, an H5N1 outbreak is quickly spreading through bird populations but this particular strain is raising concerns that it could eventually pass to humans. Bird and swine flu have made this jump before and caused hundreds of thousands of deaths in previous outbreaks. One of the biggest swine flu outbreaks in 2009 is estimated to have killed over 280,000. Concerns are increasing after mink in Spain were recently found to be infected, signifying that this variant can move from bird to mammal, raising fears that humans could eventually become infected. Read more in Nature.

Better than all the other images of mink in cages… Photo by Erik Karits on Unsplash

A Reminder to Maintain Contingency Plans

The chances of a large-scale outbreak are very slim in this case and there are multiple instances of limited transfer of animal infections to humans that didn’t result in widespread illness. However, at a time when everyone has ‘COVID-fatigue’ and there are moves to declare an end to the current emergency, it’s a reminder that other dangers exist. Leaders and decision-makers should review the procedures and arrangements they put in place during the height of COVID and refresh these, based on lessons learned. That will put organizations in a good position if there is a future infectious outbreak of some kind.

Communications Challenges

Unfortunately, the degree to which people are ‘over’ COVID means that implementing preventative measures in the face of any future illness will be much harder in the near term. There’s also no overlap in these illnesses so any resistance to COVID and the immunizations developed won’t provide any resistance. However, that’s not to say that people will think that there’s some carryover. Both of these present significant communications challenges in the face of any future outbreak. Most of the communications effort will fall to governments but organizations will also have to explain any changes they implement to their staff. It’s time to dust off those pandemic planning guides and check they’re up to date, just in case.

On to the numbers

(Still not sure of how to use these metrics in your risk analysis? There’s a cheat sheet at the bottom of the email but the user’s guide is here. Want to know more? Read the white paper.)

Relative Values (90-Days)

Turn your phone for a better view ⟳

Trends (21-days)

Turn your phone for a better view ⟳

Brent Crude

Potentially impacting: Fuel prices | Gound shipping costs. | Plastic prices | Changes to fuel subsidies (potentially leading to unrest) | Cost of living (especially transport and heating) | Changes to traffic volume/transportation choices | Demand for automotive products | Theft and smuggling.

Brent Crude is low for this 90-day interval. Prices decreased moderately over the last 21 days after some fluctuation.

Iron and Steel

Potentially impacting: Cost of construction projects | Construction project timelines | Cost/availability of raw materials | Infrastructure project timelines/costs | Cost and availability of finished metal goods | Value of scrap | Value of 2nd hand equipment/vehicles.

(No change) Iron and Steel remain very high for this 90-day interval. Prices increased moderately over the last 21 days after slight fluctuation but continue to creep up.

Market Volatility (VIX-US)

Potentially impacting: Availability of capital for investment | Interest rates| Share prices | Consumer confidence | House prices/rent | Financial certainty/uncertainty | Financial models | Stock-based compensation values.

(No change) Market Volatility (VIX) is very low for this 90-day interval. The index decreased moderately over the last 21 days after moderate fluctuation.

Wheat

Potentially impacting: Bread, pasta, couscous & noodle prices | Changes to food subsidies (potentially leading to unrest) | Cost of living | Movement from low-income to food insecure to undernourished | Increased theft or graft in loosely governed areas | Demand on charities.

Wheat is very high for this 90-day interval. Prices ended relatively flat over the last 21 days with little fluctuation.

=

Ocean Freight (FBX)

Potentially impacting: Supply chain costs (direct and indirect) | Supply chain delays | Port capacity/throughput speed | Customs clearance | Availability of goods and materials | Consumer demand/hoarding.

(No change) Shipping (FBX) remains very low for this 90-day interval. Prices decreased sharply over the last 21 days after significant fluctuation and a sharp drop at the beginning of the week.

Up-to-date shipping data supplied by our partner Freightos

Election Watch

February 5: Cyprus, PresidentFebruary 5: Monaco, ParliamentFebruary 5: Ecuador, ReferendumFebruary 25: Nigeria, President, House of Representatives and Senate

Palate cleanser

Risk management > rapid intervention > crisis management

All you risk managers can feel a little smug reading this….

Farnham Street vis Twitter

What do you think about the SITREPS this week?

Publish on Beehiiv