MARITIME trade growth has slowed due to trade tensions and protectionism, with the Philippines expected to benefit in a minor way from substitution, the United Nations Conference on Trade and Development (UNCTAD) said.
According to the 2019 Review of Maritime Transport, international maritime trade lost momentum last year, with volumes expanding 2.7% in 2018 from 4.1% the previous year.
“It undermined global port cargo-handling activities, and growth in containerized global port throughput decelerated to 4.7%, down from 6.7% in 2017,” according to the report.
Trade tensions and protectionism topped the list of downside risks that contributed to the slowdown. These were followed by Brexit, the economic transition in China, geopolitical turmoil, and supply-side disruptions such as those occurring in the oil sector.
Grain, containerized trade, and steel products were affected by the US-China trade war the most, according to the report, with the tensions reducing or diverting trade flows.
“Supply chain disruptions have also been observed and could deepen if trade tensions and tariffs are prolonged,” the report said.
With maritime imports to China accounting for about a quarter of the global total, UNCTAD said that the outlook for maritime trade depends on developments in the Chinese economy.
“A tapering in the country’s dry bulk import demand reflects [China’s] recent reform agenda, promoting a shift from investment-led growth and manufacturing towards consumer spending and services.”
The decline of iron ore and coal imports by China has had a negative effect on dry bulk, the mainstay of global trade for around two decades.
According to preliminary data from the Philippine Statistics Authority, Philippine iron and steel exports in August declined 34% from a year earlier, while the eight-month export value fell 13.5% from a year earlier.
Because of the tariff uncertainty between the US and China, UNCTAD said that other countries are expected to benefit.
The Philippines, along with Vietnam, India, and Pakistan, is expected to benefit, but to a smaller extent than Canada, Japan, and Mexico, which altogether are expected to capture over $20 billion in trade.
The UNCTAD study estimates that 82% of the $250 billion in Chinese exports subject to US tariffs can be captured by other countries, along with 85% of $85 billion in US exports subject to Chinese tariffs.
With trade tensions and uncertainties in maritime transport, UNCTAD expects international maritime trade to expand at an average annual growth rate of 3.5% over 2019-2024.
UNCTAD said that this growth will be driven by growth in containerized, dry bulk and gas cargoes.
China, Japan, and South Korea in 2018 still dominated the global shipbuilding market in 2018, with more than 90% of the 58,045 total global ship deliveries.
The Philippines offered 3.4%, or 1,988 vessels. A bulk of these vessels are container ships, with 992 vessels.
The Philippines delivered 654 bulk carriers, 288 oil tankers, 52 gas carriers, and 2 ferries/passenger ships.
There has been a steep decline in dry bulk carrier and oil tanker delivery since 2016, while container ships and gas carrier deliveries have been climbing. — Jenina P. Ibañez
