Business

Containerised trade growth flat in Q3 2019: Maersk report

‘Trend indicates soft global uptake, weak domestic demand’

Containerised export and import trade of India remained flat during the July-September quarter of 2019 compared with a global growth of 1.5%, indicating softening of global uptake and weak domestic demand.

The Maersk India Trade Report Q3 2019 said that while imports into the country saw subdued growth, the overall fiscal impact was nullified by an identical contraction in exports. However, overall exports to Africa in the quarter grew by 11%, led by appliances and kitchenware, vehicles and seeds, beans and cereals and flour.

Refrigerated cargo (reefer) exports from India to the Mediterranean region witnessed an increase, primarily fuelled by meat, fish and shellfish, the report said.

As per the report, the negative effects from escalating trade restrictions weighed on trade growth in the quarter. Trade restrictions had reduced bilateral trade between the U.S. and China, and led to shifts in trade structures, with global importers having shifted sourcing from China to other countries such as Vietnam, Taiwan, Bangladesh and Korea, with Thailand, Mexico and India also showing early signs of being next in line to benefit. In India, economic uncertainty, tight liquidity, decline in global export orders and domestic political scenario affected the flow of investments and added to currency volatility, it said.

While imports into the country witnessed subdued growth, the overall fiscal impact was nullified by an identical contraction in exports.

While India wants to boost trade with China by protecting local interests, it is looking for greater access to the Chinese market as it seeks to arrest the fall in farm commodity exports.

Steve Felder, MD, Maersk South Asia, said, “The current slowdown witnessed in the last two quarters can be accredited to tight liquidity and working capital, weaker domestic consumption patterns and slower global growth.

“As the global economy continues to face challenges, and trade tensions between major economies ensue, many leading global importers have begun exploring trade alternatives to China,” he added. He said, “The USA has emerged as a strong trade partner with India showing growth in exports as well as imports. India boosted its ‘ease of doing business’ in World Bank’s 2020 rankings. This provides a huge opportunity to entice multinationals and global investors to grow their trade with India.”

As per the report India’s retail, apparel and textile sectors are facing strong global headwinds. It said the apparel exports are exposed to multiple threats like U.S.-China trade tensions, Brexit uncertainty and almost flat growth in major EU economies which could slow down the pace and make it challenging for apparel exporters.

Though India’s apparel exports have revived during the current financial year, exports aim to grow by 4% Y-o-Y during 2020 after two consecutive years of contraction.

“India’s textile and apparel industry is facing strong headwinds as key competitors such as Pakistan, Bangladesh and Vietnam are given preferred access in India’s biggest textile market — Northern Europe,” the report said.

For reefer exports to the South East Asia region, vegetables and shellfish witnessed the highest growth at 13% and 8% respectively, while meat export growth remained flat.

Global free trade agreements might impact India’s reefer exports to EU, it said.

Additionally, the government’s ban on onion exports resulted in overall market for onion exports getting being contracted roughly by 26% Y-o-Y, it added.

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Printable version | Feb 26, 2020 10:55:27 PM | https://www.thehindu.com/business/containerised-trade-growth-flat-in-q3-2019-maersk-report/article30391174.ece

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