Facebook

India's nascent export recovery runs into choppy waters


Turbulent waters


1/6


Turbulent waters



Huge container ships have been transporting anything from pharma products, petroleum, auto parts, rice, canned mangoes and pickles across the globe from India for a long time. But it all came to a grinding halt as the world went into a lockdown, throwing global trade into a tizzy. As economies opened up from the second quarter of this fiscal, a usual problem surfaced.

iStock




The story of container shortage


2/6


The story of container shortage



As the world shutdown, everything came to a grinding halt and ports were closed to stop the spread of the Covid-19 pandemic. Many factories stopped production and the cargo became limited. This led to shipping companies reducing the number of vessels to cut costs. Container shortage impacts trading companies, manufacturers and other sectors associated with it. The lockdowns are over in most countries and markets are slowly coming back to normal. The problem of container shortage is refusing to go away. Roughly 60% of global goods move by container, and according to United Nations trade data there are close to 180 million containers worldwide.

iStock




Expensive deal


3/6


Expensive deal



Coronavirus was first discovered in China and following lockdown, it was the first country to rebound from the pandemic but its recovery is being blunted by a global shortage of shipping containers. This is leading to a surge in cargo costs not only in that country but across the world too. The Indian container trade has also been severely impacted this year owing to the staggered supply and demand shocks across geographies. The overall recovery in imports and exports is expected in the first half of the next year.

iStock




Rice exporters woes


4/6


Rice exporters woes



Rice exporters have sought government assistance in transportation and marketing as they are unable to increase prices of rice significantly for fear of losing business to other countries. Freight rates to West Asia, which accounts to 75% of trade, rose about 243% after the lockdown to $1,200-1,500 per container, while freight for shipment to Caribbean countries increased 344% to $4,200-4,500 per container during the same period.

iStock




A glimmer of hope


5/6


A glimmer of hope



The rising demand for Indian textiles and apparels, especially to the North American markets, has driven growth in exports in the September quarter according to Maersk. Apparel and textiles contribute a quarter of exports to North America, and these volumes delivered a growth of 10 per cent over the same quarter last year. The exports of these two to the Mediterranean markets grew by 10 per cent. Other commodities that witnessed growth in exports include tile, stone and glass to the North European region, and seeds, beans, cereal and flour to the Middle East and Mediterranean countries.

iStock




When will things become better?


6/6


When will things become better?



Experts feel that things should look up in 2021 but overcapacity will be a thing of the past. The demand for containers will also take time to recover. Even as the import-export cycle has begun improving and ports and container freight stations are getting decongested things will take time to get back to normal as a lot depends upon the pandemic is still refusing to die down.

iStock


India's nascent export recovery runs into choppy waters India's nascent export recovery runs into choppy waters Reviewed by TechCO on 12/31/2020 Rating: 5

No comments:

ads 728x90 B
Powered by Blogger.