On June 11, 2020,According to the report ‘Global Trade Update 2020’ released by the United Nations Conference on Trade and Development (UNCTAD), the value of international trade in goods fell by 5% in the first quarter (Q1) of 2020 and is expected to plunge further by 27% in the ongoing second quarter (Q2) due to the unprecedented effects of the coronavirus (COVID-19) pandemic.
-It has also forecasted a 20% annual decline in trade for the year 2020.
Automotive and energy sectors collapse, agri-foods stabilize:
- As per UNCTAD, the supply and demand in industries such as automotive (-50%) and energy (-40%) witnessed a sharp contraction in April 2020, while the global trade in the agri-food sector has been the least volatile (grew by about 2%) in the Q1 of 2020.
- Medical products’ exports more than double: The international trade in medical goods such as ventilators, monitors, thermometers, hand sanitizers, protective masks and garments has been decreased due to COVID-19 pandemic but then rebounded in the months of February & March 2020 and almost doubled in April 2020.
- Other sectors: At the same time, the trade in textiles and apparel indicates declines by around 12%, office machinery and automotive sectors fell around 8% & major declines are also witnessed in chemicals, machineries and precision instruments with drops more than 10%.
Worrying scenario for developing countries:
Developing countries in South Asia & the Middle East witnessed the sharp decline in exports while those in East Asia and the Pacific faced the least reduction in exports. In April 2020, imports of developing countries decreased by 19% & exports fell by 18%.
China performed better:
China seems to have performed better than other major economies as its exports grew by 3% in April 2020, However, the recovery has been short-lived as imports and exports fell by 8% in May 2020.
About United Nations Conference on Trade and Development (UNCTAD):
Headquarters– Geneva, Switzerland
Secretary-General- Mukhisa Kituyi