Writing in the BIR World Mirror recently, Ranjit Baxi of J&H Sales International Ltd (GBR) reports on the second quarter of 2019. “Fears of global economic slowdown increased during the second quarter as the US/China trade war continued to bite. The trade war is greatly affecting China’s exports, which continue to fall which, in turn, has a direct effect on its imports. The Chinese economy grew only 6.2% in the second quarter, which is said to be the lowest in 27 years. Weakening Chinese and other Asian economies are not helping to sustain fibre demand and prices. Simultaneously, exporters are having to absorb increasing sea freight rates imposed by the shipping lines whose revenues are also challenged by decreasing exports.
“China is continuing to issue fibre import licences in batches, although for much lower volumes than last year. By the end of the second quarter, close to 7.5 million tonnes of licences had been issued. Markets are expecting more to be issued over the August to October period for a further 4 to 5 million tonnes. By the end of the second quarter, new inspection regulations had been imposed on exports to Indonesia in a move which is likely to slow the container loading process. We are looking to the second half of the year to see how export volumes and overall prices will be affected by these new controls.”
