Kanika Bha­tia

Shoes & Accessories - - Contents -

Hin­dered by global ten­sions, trade ex­pan­sion is on track to slow fur­ther in the third quar­ter, ac­cord­ing to the World Trade Or­ga­ni­za­tion’s lat­est World Trade Out­look In­di­ca­tor.

The cur­rent WTOI read­ing of 100.3 is be­low the pre­vi­ous value of 101.8 and just above the base­line value of 100 for the in­dex, sig­nal­ing an eas­ing of trade growth in the com­ing months in line with medium-term trends, the WTO said.

“The loss of mo­men­tum re­flects weak­ness in com­po­nent in­dices, in­clud­ing ex­port or­ders and au­to­mo­bile pro­duc­tion and sales that could be a re­sult of the ratch­et­ing-up of trade ten­sions,” the re­port elab­o­rated. The lat­est re­sults are gen­er­ally in line with the WTO’S most re­cent trade fore­cast, is­sued in April, that pre­dicted a slow­ing of mer­chan­dise trade vol­ume growth to 4.4% this year, from 4.7% in 2017.

“Ris­ing trade ten­sions con­tinue to pose risks to the trade fore­cast and will be mon­i­tored closely,” the re­port said.

The mod­er­a­tion in the over­all WTOI in­dex was driven by ex­port or­ders — which have been on a steady de­cline this year — plus au­to­mo­bile pro­duc­tion and sales that have risen slightly re­cently but re­mained be­low trend. Elec­tronic com­po­nents stayed above trend, while agri­cul­tural raw ma­te­ri­als moved from be­low to on-trend.

The mer­chan­dise trade vol­ume in­dex was flat. The in­dices for air freight and con­tainer port through­put re­mained above trend, but growth in both ar­eas “ap­pears to be past its peak,” the WTOI noted.

The lat­est data from the In­ter­na­tional Air Trans­port As­so­ci­a­tion for global air freight mar­kets showed that de­mand, mea­sured in freight ton kilo­me­ters, rose 2.7% in June, com­pared with the a year ear­lier. This con­tin­ued the slow­down in air cargo growth that be­gan ear­lier in 2018, IATA said. Growth for the first half of 2018 stood at 4.7%, less than half the growth rate in 2017.

“Air cargo con­tin­ues to be a dif­fi­cult busi­ness, with down­side risks mount­ing,” said Alexan­dre de Ju­niac, IATA’S di­rec­tor gen­eral and CEO. “We still ex­pect about 4 per­cent growth over the course of the year, but the de­te­ri­o­ra­tion in world trade is a real con­cern. While air cargo is some­what in­su­lated from the cur­rent round of ris­ing tar­iff bar­ri­ers, an es­ca­la­tion of trade ten­sion re­sult­ing in a reshoring of pro­duc­tion and con­sol­i­da­tion of global sup­ply chains would change the out­look sig­nif­i­cantly for the worse.”

On the ocean, Drewry’s lat­est as­sess­ment, for May, showed the global con­tainer port through­put in­dex in­creased more than five points com­pared with April and reached 130.6 points. On an an­nual com­par­i­son, the in­dex was al­most five points higher than the May 2017 level of 126.1 points and was the high­est since the in­cep­tion of Drewry Con­tainer Port Through­put In­dex in Jan­uary 2012.

All re­gions wit­nessed monthly and an­nual in­creases ex­cept Latin Amer­ica. The China and North Amer­ica through­put in­dices reached an all-time high level of 140 and 139 points in May 2018, which were up 8.1% and 3.8%, re­spec­tively com­pared with April. How­ever, the an­nual in­crease was slightly lower at 2.8% for China and 4.6% for North Amer­ica.

Newspapers in English

Newspapers from India

© PressReader. All rights reserved.