Commodity Watch: Street Food to System Risk

<div class="grid grid--33-66-col"><div class="col"><img loading="lazy" src="/getContentAsset/061c994a-a452-418f-bfa0-f2cf3cf5c577/cb87803a-320c-480f-ab75-7b9029eaaf79/Ahmad-Al-Sati-new.png?language=en" alt="Ahmad Al Sati - insights" title="Ahmad Al Sati - insights" style="width: 180px" class="fr-fic fr-dii"></div><span style="font-size: 12px"><div class="col"><strong>AHMAD AL-SATI</strong><br><br>PRESIDENT OF GEMCORP CAPITAL ADVISORS LLC, PORTFOLIO MANAGER<br><br>Ahmad Al-Sati is Portfolio Manager of the Gemcorp Commodities Alternative Products strategy (GCAP) and President of Gemcorp Capital Advisors LLC, based in New York. He is responsible for leading Gemcorp’s commodities-focused investment strategy and overseeing the firm’s US advisory platform.</div></span></div><hr><p data-pasted="true">Cendol (pronounced chendol) is a dessert served as part of the hawker culture in urban and trading centers across Southeast Asia. It is considered an "Intangible Heritage Object" in Malaysia. The origin story of the dessert remains unclear with India, Persia and English ships, carrying refrigerated rice, as the primary guesses. Nevertheless, the dish has spread across Southeast Asia developing local names and local variations. Despite the different toppings across the region, the four main ingredients remain jelly strands from rice flour, coconut milk, palm sugar syrup and shaved ice.</p><p>In the last day or so in Kuala Lumpur I’ve had my fair share of the dessert (ok perhaps more than my fair share) – a welcome respite after a walk outside. And of course, after heading to my hotel room, I had to look up the recipe and the supply chain behind it.&nbsp;</p><p>No surprises here, the supply chain behind Cendol is complicated. It depends on millions of small leaseholders across Asia (~90% of both rice and palm sugar are produced by small farmers), processed through multiple layers of aggregators and traders before reaching the ultimate customer, this relies on specialised knowledge required to produce palm sugar and at times requires proximity (fresh coconut milk spoils if not consumed quickly). This complexity can exacerbate fragility and make a supply chain more susceptible to exogenous shocks such as weather events or fertiliser shortage – fertiliser is required in significant amounts for both rice and coconut production.</p><p>Global production and consumption are ever interconnected, globalisation or not, in ways large and small. And supply chains are one of those things, once you see it, you can’t unsee it. They impact all aspects of life from electricity to national desserts. In an age of bits and bytes, those interconnections have perhaps become less evident (or, to some, less relevant). Yet, they still drive our everyday life, and we ignore them at a cost.</p>