21-22/2020 Bottoming out?
The first-quarter results for companies in our sector have varied considerably so far. Some of them are surprisingly good. C.H. Robinson may have lost 50% of its profits; K + N may have been hit by a drop in turnover of more than 6%; DSV Panalpina’s net profit may have fallen by 65% (see page 22), but some SMEs in Europe and the Americas got off more lightly.
Data published by Unctad on the basis of a joint report prepared by 36 international organisations grouped together in the Committee for the Coordination of Statistical Activities (CCSA), tells us more precisely that the moment of truth will strike in the second quarter of this year. According to this report, world trade is expected to fall by 27% compared to the previous quarter. Unctad’s ‘free-market commodity price index’ (FMCPI), which measures the price movements of primary commodities exported by developing countries, also lost 1.2% of its value in January, 8.5% in February and a whopping 20.4% in March. At least an all-clear can be given here, as the price of crude oil fell by a dramatic 33.2% in March, whilst minerals, ores, metals, food and agricultural commodities lost less than 4%.
The answer has to take the form of a trident. According to Unctad secretary-general Mukhisa Kituyi, policymakers have a role to play by supporting measures “with long-term consequences”; improving the situation additionally requires the creativity of companies and consumer confidence too, however.
In Chinese, the character for crisis also stands for opportunity. Let’s make the best of it!
I hope you enjoy your read.