China Export Volume Seen Falling in August Amid Port Congestion
(Bloomberg) -- The volume of China’s exports are expected to fall in August from the previous month due to renewed container shipping congestion, while imports likely stagnated, according to a German think tank.
The Kiel Institute for the World Economy said its trade indicator for China, which measures the number of ships leaving Chinese ports, dropped 6% in August from July. The reading points to weakness in China shipments as a resurgence of the delta variant threatens to derail a recovery in global trade.
“While in recent weeks there have been gentle signs of relief, the terminal closure in Ningbo is now exacerbating the bottlenecks in container traffic again,” said Vincent Stamer, head of Kiel Trade Indicator. “If goods trade with China does not quickly find its way back to normal processes, the crisis also threatens to make itself felt in the Christmas business with missing products and higher prices.”
Port congestion in China worsened over the past week, as the partial closure of the world’s third-busiest container port in Ningbo led to increased congestions at other major ports in the country. Waiting times in nearby Shanghai and in Hong Kong rose as ships diverted away from Ningbo amid uncertainties over how long virus control measure will be maintained.
The institute added that cargo volumes in the Red Sea -- the most important sea trade route between China and Europe -- are currently 20% lower than would be expected, taking into account the general rise in China’s exports since the pandemic.
The Kiel Institute’s forecast is based on data on the volume of ships leaving ports and so tracks the amount of exports by volume, rather than their value. The Chinese customs data measures the value of shipments, suggesting the think tank’s observations may differ with actual readings for the month.
China’s export growth has been slowing in recent months as the year-earlier base effect turned less favorable and amid signs the global demand is peaking. Exports by value rose 19.3% in July from a year earlier, down from 32.2% in June.
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