Last week(W2-2024), the overall FBX index closed at 2613$, +4% WoW.
Transpacific head hauls:
China/East Asia – North America West Coast sits at 2588$ (-5%);
China/East Asia – North America East Coast closed at 4278$ (+7%);
Cross Suez head hauls:
China/East Asia – North Europe: 4757$ (+8%) ;
China/East Asia – Mediterranean: 5440$, (+5%)
The overall index for the same month last year (2023) was at 2171$.
Red Sea Crisis Could Trigger Port Congestion and Push Shipping Rates Higher (link)
HSBC Global Research is warning that the ongoing crisis in the Red Sea could lead to congestion at ports due to uncertain vessel schedules and equipment shortages triggered by the displacement of empty containers. These challenges could be further exacerbated by the approaching Chinese/Lunar New Year.
Drewry: One-Third of Global Container Shipping Capacity Impacted by Red Sea Crisis (link)
According to Philip Damas, head of Drewry Supply Chain Advisors, the next 4-5 weeks will be crucial for global shipping and container traffic particularly between Asia and Europe as well as the Mediterranean.
Drewry estimates that more than 800 ships representing about 10 million twenty-foot equivalent units (TEUs), or approximately one-third of the world’s container ship capacity, is affected by the Red Sea attacks and reroutings around the Cape of Good Hope.
Sticky US inflation reduces chances of an early Fed rate cut (link)
CPI comes in above expectations
December US CPI has come in at 0.3% month-on-month/3.4%year-on-year and core 0.3%/3.9% versus the 0.2/3.2% expectation for headline and 0.3/3.8% for core. So, it is a little disappointing, but not a huge miss. Meanwhile, initial jobless claims and continuing claims both came in lower than expected with continuing claims dropping to 1834k from 1868k – the lowest since late October. The combination of the two – slightly firmer inflation and good jobs numbers really brings into doubt the market expectation of a March rate cut from the Federal Reserve. We continue to see May as the most likely start point.
German trade rebounds in November (link)
While the country prepares for a week of farmers’ protests and train strikes, this morning’s macro data bring some relief. German exports rebounded in November and increased by 3.7% month-on-month, from -0.4% MoM in October. November imports increased by 1.9% MoM, widening the trade balance to €20.4 billion from €17.7 billion in October.
German industrial production disappoints in November (link)
New year, old problems. German industrial production dropped for the sixth consecutive month in November, by -0.7% month-on-month, from -0.3% MoM in October. For the year, industrial production was down by almost 5%. The sharp drop in activity in the construction sector (-2.9% MoM, from -2.2% MoM in October) is especially worrying.
Philippines: Trade deficit widens again in November (link)
November trade deficit at $4.7bn
Philippine trade data showed exports falling more than expected, down 13.7% YoY (12.9% expected) with the important electronics sub-sector dropping 24.7% YoY on soft global demand for basic semiconductor components. Exports of other major products were also down with other manufactured goods (-1.8%YoY) and other mineral products (-6.2%YoY) falling although we did see growth for exports of chemicals and bananas.
Growth in the Balkans: Between zero and hero (link)
The second half of 2023 came with some shivers for the Balkan countries that we cover, as their economies slowed down rather abruptly and the word ‘recession’ did not necessarily seem inappropriate at some point. While 2024 might look a touch better, the external context is not – especially the economic growth in the eurozone, their main trading partner. Nevertheless, we generally pencil in some modest GDP acceleration given that for each country we can find reasonably supportive domestic factors to sustain growth in 2024, while positive real wage growth is common for all.
India’s exports may plunge $30 bn owing to disturbance in Red Sea (link)
India may see around $30 billion shaved off its total exports in the current fiscal year, as threats to cargo vessels in the Red Sea lead to a surge in container shipping rates and prompt exporters to hold back on shipments.
U.S. International Trade in Goods and Services, November 2023 (link)
November exports were $253.7 billion, $4.8 billion less than October exports. November imports were $316.9 billion, $6.1 billion less than October imports.
The November decrease in the goods and services deficit reflected a decrease in the goods deficit of $0.6 billion to $89.4 billion and an increase in the services surplus of $0.7 billion to $26.2 billion.
Year-to-date, the goods and services deficit decreased $161.8 billion, or 18.4 percent, from the same period in 2022. Exports increased $28.8 billion or 1.0 percent. Imports decreased $133.0 billion or 3.6 percent.
China’s exports seen improving in December as global trade picks up: Reuters poll (link)
BEIJING, Jan 10 (Reuters) – China’s exports likely grew more quickly and for a second month in December, a Reuters poll showed, adding to signs global trade is starting to recover thanks to an upturn in the electronics industry and expectations of lower borrowing costs in 2024.
Low-Value Shipments, Export Manifests Among New Rules on CBP Agenda (link)
Imports of low-value shipments and electronic export manifests are among the new regulations included on a list of those U.S. Customs and Border Protection anticipates publishing in the next few months. The semiannual regulatory agendas of the departments of Homeland Security and the Treasury list the following regulations affecting international trade that could be issued within the next year. The expected timeframes for issuance of these rules are indicated in parentheses.
CITRUS REPORT – BRAZIL (link)
The Brazilian orange crop for Marketing Year (MY) 2023/24 is forecast at 408 million 40.8-kg boxes (MBx) – standard reference, equivalent to 16.5 million metric tons (MMT), a decrease of 1.03 percent compared to the estimate of current crop MY 2022/23 (around 412.3 million boxes or 16.67 MMT), due to the incidence of greening, which has been affecting Brazil’s citrus belt. Meanwhile, the average fruit weight is expected to be 158 grams for MY 2023/24, as a result of unfavorable climate and diseases, with expectations of lower production and fruit quality. FCOJ 65 Brix equivalent production for MY 2023/24 is forecast at 1.05 MMT, a decrease of 1.64 percent vis-à-vis the estimate for MY 2022/23 (1.12 MMT), due to downward expected availability of fruit for processing provoked by extremely high temperatures and the greening incidence. A significant share will keep supplying the U.S. market due to limited juice availability from Florida provoked by hurricane Ian.
