Russia and economic war by the west #3

World trade picks up, Russia's port activity almost at pre-war level

In August, global trade shows a clear countermovement to the weak summer months. The values of the Kiel Trade Indicator for global trade and also for the trade of major economies are all positive and, in some cases, show significant increases compared with the previous month of July (adjusted for price and seasonal effects). In Russia's ports, the number of container ships arriving is surging and, despite sanctions and a weak ruble, is almost at the level seen before the outbreak of the war. The congestion off the Panama Canal has only minor importance for global goods trade.

The latest Kiel Trade Indicator data update shows a 0.9 percent increase in global trade in August compared with the previous month of July (adjusted for price and seasonal effects).

For Germany, the August figures for both exports (+1.8 percent) and imports (+1.5 percent) are quite clearly in the black. "The figures point to a recovery in German trade, after the Federal Statistical Office had recently reported a decline for July exports, but unlike the Kiel Trade Indicator, the values are not adjusted for inflation. It remains to be seen whether German exports will really turn around, as the weak global economy means that demand for new German machinery and other capital goods tends to decline," says Vincent Stamer, Head of Kiel Trade Indicator.

The signs for EU trade arealso positive, with exports (+2.6 percent) noticeably up and imports (+0.6 percent) slightly up. For the US, the Kiel Trade Indicator points upwards for exports (+1.8 percent) and imports (+0.6 percent). China isalso expected to trade more goods in August than in July, with exports (+5.8 percent) likely to make a much bigger jump than imports (+0.5 percent), which are only slightly above the previous month's level.

The overall positive August figures for global trade are also supported by figures on shipped and congested goods. The volume of standard containers shipped rises slightly in August to almost 14 million, with the proportion of these incongestion falling to around 7.5 percent, which is not unusual by historical standards.

Yet the congestion off the Panama Canal has virtually no impact on the global transport of goods, with only 0.5 percent of global cargo capacity stuck there. "Only a fraction of the global container fleet is affected by the low water in the Panama Canal. Due to the size restriction, ships with the biggest dimensions do not pass the canal anyway. And also, waiting container ships are given priority by the canal authority during processing, so that mainly chemical, LNG, or oil tankers are stuck," says Stamer.

Activity in Russia's ports approaches pre-war level

Activity in Russia's ports is surprisingly high. For the first time since the outbreak of the Ukraine war, the volume of goods unloaded at Russia's three largest container ports, St. Petersburg, Vladivostok, and Novorossiysk, is approaching the levels seen at the outbreak of the war.

In particular, arrivals at Russia's most important container port, St. Petersburg, had slumped by 90 percent in the meantime and then jumped in recent weeks. "Where the goods are coming from is not clear from the container ship movements, but Russia seems to be rejoining the world trade. This occurs despite sanctions imposed by Western nations and the falling value of the ruble, which is disappointing," Stamer says.