International trade declined by 3 percent in 2020 Q1: UN Reports
International trade declined by three per cent in the first quarter (January-March) of this year due to the Covid-19 pandemic. This was stated by the United Nations Trade Organization United Nations Conference on Trade and Development (UNCTAD) in a new report. UNCTAD said that international trade in the April-June quarter could decline by 27 per cent over the March quarter. While international trade has recorded a decline, commodity prices have also fallen significantly. Commodity prices have fallen drastically since last December.
Report prepared by 36 international organizations
UNCTAD has prepared this report with the help of international statistics organizations and national statistical offices and systems of many countries. UNCTAD Secretary General Mukhisa Kituyi said that the government of every country is under pressure to take decisions that are far-reaching in the aftermath of the Covid-19 pandemic. According to data from a report prepared by 36 international organizations, the value of international trade declined by 3% in the first quarter of this year due to the coronavirus pandemic. The report also said that international trade in the second quarter (April-June) could decline by 27 per cent over the first quarter.
Commodity prices also fall sharply, fuel prices fell 33.2 percent in March
According to the report, the value of UNCTAD’s Free Market Commodity Price Index (FMCPI) has fallen by 1.2 per cent in January, 8.5 per cent in February and 20.4 per cent in March. This index reflects the changes in the prices of primary commodities exported by developing economies. Fuel prices played the biggest role in this decline. It fell 33.2 percent in March. Minerals, ores, metals, foods and agricultural raw materials declined by less than 4 percent.
Commodity prices fall more than in 2008 global financial crisis
The decline in commodity prices by more than 20 per cent in March is a historic decline for FMCPI. At the time of the 2008 global financial crisis, the maximum decline was 18.6 percent on a month-on-month basis. At that time the decline was seen for 6 months. Unfortunately, how much will be the decline now and for how long, nothing can be said for sure.
United Nations warns of 3.2% decline in global economy
The international commodity trade volume and value were showing a slight rise before international trade declined due to the Coronavirus pandemic. This boom was visible since the last part of 2019. Significantly, the United Nations has said in an estimate released on Wednesday that the coronavirus pandemic may cause the global economy to decline by 3.2 percent. At the same time, the crisis of the biggest recession since 1930 has arisen due to interrupted economic activities and increasing uncertainty.
