The COVID-19 pandemic had several adverse effects on the global economy, but most of all, it paralysed the international trade market. The massive spread of the virus was uncontrollable during the first quarter as well-developed countries like China, Italy, and America struggled to find a way out! With most of the countries adopting total lockdown as the only way to fight the pandemic, transporting goods was nothing less than facing a world war! While the demand for ventilators, medical equipment, hydroxychloroquine drugs, and other essentials kept on increasing, the transportation costs also doubled overnight.
Out of all the major trading players in the world, India was amongst the ones that faced huge losses. The GDP rate of the country was the highest in the world as it registered -23.9% in the first quarter of the fiscal year 2020-21. Amidst all the resignation chaos, if there was one thing that kept the traders going on with their businesses, it was the import and export news facility. Traders who followed reliable sources of information and shipping blogs reported having apt information about the market happenings. Let us understand how COVID-19 pandemic affected the international trade industry.
The Covid-19 pandemic did not spare any country in the world from its adverse effects on the economy.
Impact on International Trade: The Major Highlights
- With the widespread drop in exports and imports in the first five months of 2020, the global trade volume fell by 17.7% in May.
- The major and direct impact of this decline was in the USA, the European Union and Japan.
- The Caribbean and Latin America are amongst the most affected regions, with India, Italy and Spain following the lead.
- Traders had to face huge financial losses as many export orders got cancelled after the lockdown. Electronics and textiles, engineering goods, and cars were the major sectors during the prime months of the pandemic, reported economists through the export news.
- Industries like the stock market, real estate, professional services, etc., were staggered to its core. Most of the investors and financial analysts reported huge losses as the stocks of the major industries showed negative trends in the first two quarters.
As per the leading world economists, the developing countries will become years behind their growth process as an impact of the pandemic. For the developed economies, winning the race against falling GDP will be tougher. Most of the merchandise firms and MNCs will take time to overcome the consequences of the same. While China became the only country to have a positive GDP growth rate, the actions taken in defence by many countries remains an enigma!
Influence of The Pandemic on Different Commodities
Fluctuations in the medical and consumer goods industry have been terrible as compared to the other sectors of the economy. With the increasing demand and limitations on supply, export news showed different trends every day! Records of a few industries are given below.
Edibles: Soybeans and Frozen Meat
The decline in the exports of these edible products was astonishing as countries like the USA and China faced losses amounting to 50 Billion USD or more. And while the latter picked the pace after April’20, countries like Germany, Russia, Canada, Japan, etc. are still facing losses, as per the latest export news.
Luxury Cars and Bicycles
The international market for car exports remained down even after the first quarter. A few countries like Brazil, Spain and South Africa reached the breakeven after July. Canada and Japan suffered the maximum hit as their market fell by 6 billion USD in April and May.
For bicycles, the export pattern remained quite different, given the maximum traffic is handled by China. After a fall of over 100 million USD in March, the exports hiked straight up to 50 million USD in May and June.
The United States took the direct hit of fall in exports of delivery trucks as the losses amounted to 1.6 Billion USD. Japan and Canada were right behind it and lost their business valued millions. The export pattern of these companies also reflected in the market as the traders failed to meet their demands for inland logistics.
Head Wears and Footwears
The apparel industry could not escape the impact of the pandemic as well. While most countries like the USA, Canada, Spain and Germany managed to not fall below 200 million USD, China went down to a billion and a half! However, the only related product that showed a stellar performance was the exports of face masks, as per the export news.
All these reports and details bring us to the conclusion that the international trade market is prone to a global change. With no control over situations like COVID-19 pandemic, the best traders can do to survive in the industry is stay updated! Follow the import and export news regularly without missing out on any headline. Stay informed and stay ahead!