Monday, June 5, 2023
HomeHeadlinesWTO: Demand Shock Behind Trade Bottlenecks Should Ease in Months

Subscribe

To our FREE newsletter
Get all the latest maritime news delivered straight to your inbox.

WTO: Demand Shock Behind Trade Bottlenecks Should Ease in Months

Global trade bottlenecks are more the result of demand spikes than supply chain snags, with pressure likely to ease in the coming months, the World Trade Organization’s chief economist said on Monday.

The WTO had thought in October that demand for goods would slow early in 2022. However, that was before the Omicron variant of coronavirus led to curbs on activity, including the postponement of the WTO’s ministerial meeting.

Chief economist Robert Koopman said consumers had then continued to skew spending towards goods rather than services given they could not or preferred not to dine out or go on holiday.

Koopman said that for goods trade, excess demand likely explained two-thirds to three-quarters of apparent shortages.

“It still remains that this compositional shift in demand supported by the appropriately aggressive, quick fiscal and monetary policies, has resulted in this outcome where lots of people write about supply-chain disruptions,” he told Reuters.

Supply disruption was, he said, more obvious in the automotive sector, or for shippers adjusting to a production shift from China to the likes of Vietnam, Malaysia or Indonesia.

Koopman said leading U.S. indicators such as back-ups of ships at ports and prices of used cars were tapering and throughput at U.S. ports had picked up.

“I’m pretty confident that in the next three or four months we’re going to see the inflationary pressures being reduced,” he said, referring to the majority of traded goods and assuming no new geopolitical or health shock.

Some companies have nonetheless warned that trade channels have become so clogged up it could be well into next year before they see business returning to normal.

The WTO will in March invite businesses, governments and trade experts to discuss global supply chain issues. Even if the problems were easing by then, there were still lessons to be learnt, Koopman said.

“What we saw were fiscal and monetary responses very, very quickly. Long-term finely calibrated supply chains did not though have the right physical or regulatory infrastructure to adapt so quickly,” he said.

Source: Reuters

Related Posts

Video

Finance & Economy
Shipping News
Ports

BW LPG appoints new CFO

BW LPG announced that it has appointed Ms Samantha Xu as Chief Financial Officer (CFO), effective 1 September 2023. Ms Xu has over 20 years...

Frontline Posts Highest First Quarter Results Since 2008

Frontline plc reported unaudited results for the three months ended March 31, 2023: Highlights Highest first quarter profit since 2008 of $199.6 million, or $0.90 per...

Diana Shipping posts slightly lower Q1 profit; takes out $123m in loans

Diana Shipping reported net income of $22.7 million and net income attributed to common stockholders of $21.3 million for the first quarter of 2023....

CMA CGM Profit Eases as Container Transport Demand Wanes

CMA CGM expects its profit to ease further for the rest of the year after a first-quarter decline, as an uncertain economy and influx...

Seanergy ‘well positioned to benefit from positive trend in Capesize market’

Seanergy Maritime Holdings Corp., announced its financial results for the first quarter ended March 31, 2023, and declared a quarterly dividend of $0.025 per...

Taiwan Shipping Firms Set to Hand Out Bumper Bonuses Again

Taiwanese shipping companies are handing out bumper mid-year bonuses despite a slump in global...

Baltic index hits over 3-month low amid lower coal imports

The Baltic exchange’s main sea freight index extended losses for the 15th session straight...

Baltic index falls for the month as vessel demand wanes

The Baltic exchange’s main sea freight index recorded its first monthly decline in four...

North Korea missile tests endanger shipping, UN maritime agency told

North Korean missile tests are endangering the safety of commercial shipping in busy sea...

Singapore Clamps Down on Tankers as Dark Fleet Grows

Singapore’s detentions of oil and chemicals tankers have surged since early last year, highlighting...

DP World Completes Terminal Expansion Project Vancouver Port

DP World has completed the AED954 million ($259.78 million) Centerm expansion project, increasing container throughput at the Port of Vancouver by 60 percent. The terminal...

DP World completes AED 954 million Vancouver port expansion

DP World and the Vancouver Fraser Port Authority have celebrated two historic events – the completion of the Centerm Expansion Project at DP World...

Alexandroupolis port gets 24 million euros of EU funding

Greece has secured 24 million euros ($26 million) in European Union funding to upgrade its northern Aegean Sea port of Alexandroupolis, privatisation agency HRADF...

Port Hedland Iron Ore Exports Down 5% in April

Pilbara Ports Authority (PPA) has delivered a total monthly throughput of 57.7 million tonnes (Mt) for April 2023. This throughput was a two per cent...

APM Terminals Reveals $1 Billion Investment in Brazil

APM Terminals’ CEO Keith Svendsen has pledged an investment of about US$1 billion in the company's Brazilian operations up to 2026. The amount includes around...