Sunday, 15 March 2020

CORONAVIRUS TO HIT IMPORTS


At least US$35 million worth of goods could struggle to be imported into the country if the coronavirus (COVID-19) outbreak that has disrupted world trade continues, an analysis of the country’s trading patterns by our sister paper Business Weekly has revealed.

In 2019, Zimbabwe imported goods worth US$411 million from China, translating to an average US$34,3 million per month, while in 2018 imports from China were more than US$450 million.

While direct exports to China seem insignificant according to figures provided by Zimstat, Zimbabwe indirectly export more than a billion dollars’ worth of products to the Asian giant.

By October last year, Zimbabwe had exported 17 million kilogrammes of tobacco worth US$120 million to China.  The country’s mineral commodities worth billions of dollars are probably indirectly exported to China via South Africa, Zimbabwe’s biggest trading partner. 

Chinese media house Xinhua, last year reported that trade between China and Zimbabwe stood at US$1,3 billion in 2018.

However, trading with China and other trading partners will come under threat if COVID-19 coronavirus epidemic continues unabated. Some countries are already restricting travel to and from their countries with Lesotho allegedly sealing its borders. The US has also issued a Europe travel ban.

According to reports, freighters are currently struggling to load up supplies and distribute them throughout the world because they cannot enter many harbours, especially in China.

The coronavirus is quickly spreading to countries other than China and making its effects felt around the world as countries are no longer able to import or export critical goods. 

The economic uncertainty COVID-19 has sparked, will likely cost the global economy $1 trillion in 2020, the UN’s trade and development agency, UNCTAD, said this week.

“We envisage a slowdown in the global economy to under 2 percent for this year, and that will probably cost in the order of $1 trillion, compared with what people were forecasting back in September,” said the director of division on globalisation and development strategies at UNCTAD, Richard Kozul-Wright.

Launching the UNCTAD report as world financial markets tumbled over concerns about supply-chain interruptions from China, and oil price uncertainty among major producers, Mr Kozul-Wright warned that few countries were likely to be left unscathed by the outbreak’s financial ramifications.

According to estimates published by UNCTAD on March 4, the slowdown of manufacturing in China due to the coronavirus could result in decrease in exports across global value chains.

In February, China’s manufacturing Purchasing Manager’s Index (PMI) — a critical production index — fell by about 22 points to 37,5, the lowest reading since 2004.

Because China has become the central manufacturing hub of many global business operations, a slowdown in Chinese production has repercussions for any given country depending on how reliant its industries are on Chinese suppliers. — Business Weekly.


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