The previous year has been eventful for import and export traders across the world. Starting from the COVID19 pandemic to the complexities of the US-China trade war; from the shipping crisis to the war in Ukraine: global trade has seen its fair share of impediments. Although troubles, as they say, always bring new opportunities. The human endeavour has yet managed to concentrate its efforts on beating the odds and building alternative trade routes. Let us take a detailed stock of all that happened in that fiscal that is about to pass us by.
Resurgence from COVID19
The year 2020 saw international trade output plummet and supply chains disrupted without any warning. Livelihoods were lost, factories shut down, the clang and hum of factories and production units were brought to a standstill.
Governments across the world engaged in shoddy lockdowns that were uncoordinated and affected individuals and businesses unequally.
By mid-2020, however, restrictions were lifted and global trade began falling back on track. The upsurge saw a rise in the trade of goods such as domestic appliances, foods, while industrial products such as petroleum, aircraft parts saw a downfall.
By the first and second quarters of 2021, global trade in many parts of the world had reached and (in some cases) exceeded pre-pandemic levels.
While the accumulated losses of 2020 haven’t been offset in 2021, the first quarter numbers for 2022 are expected to present a better picture.
Shipping, Crude Oil and Transport Costs
Almost 80% of global trade output is transported via ships and containers. Shipping rates skyrocketed in 2021 due to port congestion, container unavailability and other COVID19-related disruptions. This, in turn, fuelled record levels of inflation and high consumer prices across the world. Small businesses and enterprises had no option but to pay premium prices to shipping companies for exports and imports.
Although, recently, shipping experts and executives have remarked that the crisis will let up in the second half of 2022. This shall be a most welcome happening.
Before the COVID19 pandemic’s slight abatement could let us breathe a sigh of relief, the greatest geopolitical setback of our times has erupted in Ukraine. The war has created a global supply shortage of essential food grains, cooking oils, and cast a shadow on the supply of petroleum and related products, especially for European countries such as Germany. American and European sanctions on Russia, though rightfully placed, have crippled Russian exports and caused immense distress to traders. Some yet say that the sanctions regime should’ve ideally been focused on the Russian government and not the Russian people.
We all hope that the war is over sooner than later. Recent talks between Ukrainian and Russian delegations in Istanbul point towards a speedy reconciliation as the Russian side has agreed to ‘drastically reduce military operations.’
Another Year, Another Endeavour
The world must unite once more to defeat the perils of war, disease and devastation. For trade to flourish, human spirits must be robust. Governments must resolve issues with Ukraine and Russia, traders’ shipping worries and COVID-related issues to make international trade flourish like never before