LONDON: Global seaborne trade grew by 31% between 2007 and 2016 to 11.1 billion tonnes, with non-OECD developing economies playing an increasingly key role. While seaborne trade in all the major commodity groups clearly expanded in this period, albeit by varying degrees, drilling down to an individual trade route provides some interesting additional perspectives.
Counting Up The Routes
In the last decade, increasing population and economic expansion in a range of developing economies has contributed significantly to seaborne trade expansion. However, while trade patterns for some commodities have clearly become more diverse, in terms of the number of key bilateral trade routes, the opposite can be said for some other commodities. Seaborne LNG trade saw the largest increase in number of trade routes over the decade (17%, from 34 to 44 routes), reflecting the start-up of liquefaction capacity in a number of countries and growing demand in Asia. Seaborne crude oil and LPG trade has also become more diverse in terms of number of routes (with 9 routes added between them combined), on the back of robust growth in demand in a number of developing economies (e.g. China and India) which have increased imports from a number of sources.
Or Counting Down
However, trade has not become more diverse for all commodities. For the featured dry bulk cargoes (grain, coal and iron ore), the number of ‘significant’ trade routes has dropped. This reflects the increasing dominance of trade by Chinese imports over the period; Chinese seaborne imports of these commodities combined rose from 457mt in 2007 to 1,335mt in 2016, accounting for 33% of the expansion in world seaborne trade. The number of key exporters has remained limited and volumes from some emerging, but often higher cost, sources, have dropped away following the crash of commodity prices.
Developing World Counts
Nevertheless, increasing import demand in a number of developing countries, including China and India, has notably driven global seaborne trade growth in recent years. Moreover, seaborne trade between developing nations has played a growing role.
The share of world seaborne trade in the featured commodities accounted for by routes between non-OECD economies is estimated to have risen from 29% in 2007 to 37% in 2016. Across most of the featured commodities, this share rose notably, boosted by firm growth in emerging economy imports, as well as growing export capacity in some developing nations. However, the share of seaborne iron ore trade fell by 4%, with Australia growing its share of exports from 34% in 2007 to 57% in 2016.
So, while global trade has expanded over the last decade, the core patterns have become more diverse for some commodities and less so for others. However, trade between developing economies, backed by developments in their economies and populations, is playing an increasing role in World seaborne volumes.