Global trade in April is expected to have increased 2.1 per cent compared with the previous month despite Russia’s invasion of Ukraine and the impact of China’s Covid-19 movement restrictions, Kiel Trade Indicator data shows.
The last time there was a comparable increase in global trade was in January, before the outbreak of the war, figures compiled by the Kiel Institute for the World Economy showed. However, congestion in container shipping remained at a high level in April.
“The initial shockwaves of the Russian invasion of Ukraine to global trade in goods appear to have been digested and trade data in April is stabilising,” said Vincent Stamer, head of Kiel Trade Indicator.
“Almost all major economies can expect growth or at least a sideways movement.”
The Covid-19 crisis highlighted significant challenges in the logistics sector, with many cargo customers struggling to find shipping containers and overcome labour disruption. The acute supply chain bottlenecks have led to congestion and delays at ports, a shortage in containers and a sharp rise in the cost of shipping goods.
The World Trade Organisation projects that the Russia-Ukraine crisis could lower global gross domestic product growth by 0.7 to 1.3 percentage points, bringing it to between 3.1 per cent and 3.7 per cent for 2022, it said in an April report.
The organisation revised down its forecast for global trade growth this year to 3 per cent from 4.7 per cent earlier, due to the Russia-Ukraine war. Global trade growth in 2023 is expected to be 3.4 per cent.
US exports were up 5 per cent month-on-month in April, while imports were expected to fall slightly by 1.4 per cent, according to the Kiel Trade Indicator.
Looking at the EU’s April trade, the outlook was positive for both exports, up 0.7 per cent, and imports, up 1.1 per cent.
For Germany, exports were expected to have increased 3.2 per cent and imports 1.4 per cent.
Both Chinese exports and imports were expected to have stagnated and trade remained at March levels, the Kiel Trade Indicator for April showed. Imports declined by 0.9 per cent.
“While the Shanghai lockdown is slowing export growth in China, declines in trade appear to be confined to the port of Shanghai,” Mr Stamer said.
“The gap in goods exports has levelled off at around 25 per cent compared to China’s other ports. But that also means that despite the lockdown, a large proportion of all goods are still leaving the port, which is a good sign for global supply chains.”
For Russia’s trade in April, exports declined a moderate 1.6 per cent, while imports were likely to increase 2.3 per cent compared with March, the data showed.
Meanwhile, global congestion on the container ship network remains at a high level, with about 11 per cent of all goods shipped worldwide stuck, according to the Kiel Trade Indicator.
“Russia may be starting to substitute imports from Europe with imports from Asia. This is indicated by the fact that the port of Novorossiysk in the Black Sea has recently seen a significant increase in the number of container ships arriving, whereas the port of St Petersburg, which is involved in European trade, continues to record declines,” Mr Stamer said.
Global trade increased an annual 25 per cent last year to a record $28.5 trillion after being battered by the pandemic, a February report from the UN Conference on Trade and Development showed.
It increased about 13 per cent compared with 2019, the agency said.
The positive trend for trade was primarily the result of an increase in “commodity prices, subsiding pandemic restrictions and a strong recovery in demand due to economic stimulus packages”, Unctad said.