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2022 May 5   16:05

Russia starts to substitute imports from Europe with imports from Asia – Kiel Trade Indicator

For Russia's trade, there are signs of a bottoming out in April after the partly severe slumps of the past three months, the Kiel Trade Indicator report states. Compared with March, exports are likely to decline only moderately (-1.6 percent), while imports could increase (+2.3 percent), according to analytics.

"Russia may be starting to substitute imports from Europe with imports from Asia. This is indicated by the fact that the port of Novorossiysk in the Black Sea has recently seen a significant increase in the number of container ships arriving, whereas the port of St. Petersburg, which is involved in European trade, continues to record declines. This could be a first indication of trade diversion" says Vincent Stamer, Head of Kiel Trade Indicator.

According to the latest data update of the Kiel Trade Indicator, global trade is clearly up on the previous month (price and seasonally adjusted). The last time there was a comparable increase was in January, before the 24th of February. The negative consequences of the Shanghai lockdown remain manageable and congestion in container shipping remains at a high level (around 11 percent of all goods shipped worldwide stuck in congestion), analytics say.

The world trade is expected to increase by 2.1 percent compared with the previous month (price and seasonally adjusted), according to the latest Kiel Trade Indicator data update for April. For Germany, ship movements suggest a positive trend compared to March, with both exports (+3.2 percent) and imports (+1.4 percent) up. The same applies to the EU, with exports likely to rise by 0.7 percent and imports by 1.1 percent.

In the USA, exports gain considerably in April, with growth of 5 percent, while imports are expected to fall by 1.4 percent. In China, both exports and imports are expected to stagnate and thus trade remains at March levels.

"While the Shanghai lockdown is slowing export growth in China, declines in trade appear to be confined to the port of Shanghai. The gap in goods exports has leveled off at around 25 percent compared to China's other ports. But that also means that despite the lockdown, a large proportion of all goods are still leaving the port, which is a good sign for global supply chains," says Stamer.

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