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Supply Lines: Vaccines for the poor

On a 50-acre lush green campus in the western Indian city of Pune, the Serum Institute of India has machines that can fill 500 glass vials every minute with vaccines.

Such manufacturing might has made it the largest supplier in the world and pivotal to efforts to immunize poorer nations from Covid-19 after it partnered with the World Health Organization's Covax initiative.

In the past two months since India's government gave Serum a green-light to distribute AstraZeneca's vaccine, Serum has managed to ship out 91 million doses to 51 countries globally at an unprecedented rate.

Yet the pace of that deployment is now threatened by a decision from U.S. President Joe Biden's administration to invoke the Defense Production Act, preventing exports of certain materials needed to manufacture coronavirus vaccinations — including gloves and filters — as it sought to shore up Merck and Johnson & Johnson facilities after Pfizer cut its targets last year following a shortfall of raw materials.

While securing American supplies, the protectionist measures have had a knock-on effect on global efforts to end the pandemic. On a World Bank panel last week, Adar Poonawalla — the 40-year-old head of the family-run Serum Institute — issued a warning over the issue that "nobody has been able to address" and could lead to "serious" supply disruptions just as the Covax initiative gets off the ground.

Read More: See Bloomberg's Global Vaccine Tracker

Also participating in the online discussion was WHO Chief Scientist Soumya Swaminathan, who likewise voiced concern aboutglobal shortfalls of vials, glass, plastic and stoppers required by vaccine makers.

Those alarms once again highlight the fragility of global supply chains at a time when the world is dependent on their seamless flow to combat the spread of Covid-19. Vaccine manufacturers are dependent on the U.S. for materials that aren't easily sourced elsewhere. Alternatives aren't likely to be found easily in the next six months to a year, according to Poonawalla.

"This is one thing that would need some discussion with the Biden administration to explain to them there's enough to go around," Poonawalla said. "If we're talking about building capacity all over the world, the sharing of these critical raw materials is going to become a critical limiting factor."

Chris Kay in London

Charted Territory

The Federal Reserve is seeing a lot more shortages across the U.S. economy, in ways that might be construed as early warning signs of inflation if they persist. In the Fed's Beige Book report released last week, the central bank mentions the word "shortage" or "shortages" 31 times, the most going back at least a decade. That's a jump from 19 in the January edition and more than triple the average number of citations in the eight reports issued since the survey's first reference of the coronavirus in March 2020.

Today's Must Reads

  • China trade boost | China's exports surged in the first two months of the year, reflecting strong global demand for manufactured goods and with figures partly skewed by the low base in 2020 when the economy was in lockdown. China may join an Asia-Pacific trade pact comprised of key U.S. allies that Donald Trump exited, Premier Li Keqiang said Friday.
  • Tariff tasks | The European Union and the U.S. agreed to suspend tariffs on billions of dollars of each other's products, easing a 17-year transatlantic dispute over illegal aid to the world's biggest aircraft makers. Separately, Biden's commerce secretary said that tariffs that Trump placed on foreign steel and aluminum have been "effective." Mask exclusion | The U.S. is extending exclusions on tariffs for face masks, cleaning supplies and other personal protective equipment from China for six months, providing protection against higher costs as the nation fights the Covid-19 pandemic.
  • Export block | Italy has blocked a shipment of the AstraZeneca's coronavirus vaccine to Australia, using a recently introduced EU regulation for the first time.
  • Mixed fortunes | The U.S. trade deficit widened to the third-biggest on record in January as imports surged to the highest since mid-2019. Meanwhile, Canada's trade sector unexpectedly recorded its largest surplus in more than six years.
  • Bay watch | The number of container ships waiting to offload at the neighboring ports of Long Beach and Los Angeles stayed elevated as dockworkers resumed working pre-pandemic hours to help alleviate a bottleneck that's bogged down imports for more than four months.
  • Local chips | The EU is planning to produce its own advanced semiconductors by 2030, part of the bloc's plans to reduce "high-risk dependencies" on technology companies in the U.S. and Asia.
  • Swiss trade-pact plebiscite | Swiss voters backed a trade deal with Indonesia in a ballot on Sunday. They got a say after environmentalists argued the agreement let palm-oil producers off the hook too easily.

On the Bloomberg Terminal

  • High spirits | The U.S.-U.K. suspension of tariffs related to the Boeing-Airbus dispute allows time for further negotiations to improve post-Brexit trade. U.S. tariff suspension mainly benefits Scotch whisky exports, according to Bloomberg Intelligence.
  • LCD risk | LCD panel shipments may continue to post stronger growth than last year's amid strong demand, but worsening key component shortages, driven by limited foundry capacity, competition for these key parts and manufacturers' safety stocks build-up could restrict panel production and delay shipments, Bloomberg Intelligence writes.
  • Use the AHOY function to track global commodities trade flows.
  • Click HERE for automated stories about supply chains.
  • See BNEF for BloombergNEF's analysis of clean energy, advanced transport, digital industry, innovative materials, and commodities.
  • Click VRUS on the terminal for news and data on the coronavirus and here for maps and charts.

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