Report: Global commodity trade contracts 2.5 percent in Q1

The trade shock is already visible in early trade indicators, which signal a trade recession in volume terms in Q1 2.5 percent q/q annualized in 2020, according to a report prepared by Euler Hermes, provider of trade credit insurance and other related financial services company.

"We expect global trade to contract by -2.5% in Q1 (q/q annualized), and certainly to stay in negative in Q2" read the report and went on as follows: "Indeed, our proprietary Trade Momentum index shows trade-in volume edged down again in January 2020 and plummeted in February, following dire activity reports in China but also deteriorating new export orders elsewhere, notably in Europe and Asia. The shipping data point in the same direction. The International Chamber of Shipping estimates that the Covid-19 outbreak has removed more than 350,000 containers from global trade. There have been 49% fewer sailings by container ships from China in the last four weeks, according to the European Commission. The forecasted drop of 20-25% in the global shipping industry throughput will have a corresponding impact on the port terminal industry. Today, a V-shaped recovery scenario points to recuperation in H2 2020, and thus a global trade forecast of +0.4 percent for the full year 2020."