Global exports of commodities to China could plunge by between $15-billion and $33-billion this year, which is 46% lower than annual growth projections before Covid-19 hit, says the United Nations Conference on Trade and Development (Unctad).
The intergovernmental body adds that this finding raises concerns for economies that rely on exports of primary goods, such as energy products, ore and grains.
More than half of developing countries are commodity dependent, and they can expect a drop in exports of between $2.9-billion and $7.9-billion, which would constitute a 9% loss in terms of annual growth rate.
“Because China absorbs about one-fifth of the world commodities exports, such a drop in its imports would have a dramatic impact on producers of primary goods.
“Assessing the impact in China says a lot about possible general tendencies. It provides important information that may help policymakers anticipate what may happen globally,” says Unctad economist Marco Fugazza.
He adds that Unctad had done a few assessments so far at a relatively disaggregated product level, using up-to-date information. The organisation awaits similar statistics from other big markets, including the European Union, to expand its analysis on exports for the year.
Imports of liquefied natural gases, for example, could fall by up to 10% this year, compared with a projected increase of 10% before the Covid-19 outbreak.
Iron imports are still expected to increase, Unctad says, but growth could fall by two-thirds, from a pre-coronavirus annual growth projection of 19% to just 6%.
Wheat imports are now projected to decrease by 25%, twice as much as before the crisis.
However, while exports of most commodities are expected to take a hit, Unctad expects a positive outcome for several agricultural products, compared with expectations before Covid-19.
Chinese imports of soya beans from commodity-dependent developing countries, for example, is now projected to grow by 34% – which is ten percentage points higher than earlier forecasts.
Similarly, the annual growth rate of imports for copper from these nations is expected to double, from a 5.4% projection pre-pandemic to 11%.
These variations at the product level could lead to very different outcomes at the country level.
“While large exporters of natural gases to China, such as Myanmar, may see their trade perspectives deteriorate because of the coronavirus pandemic, other countries such as Equatorial Guinea may see an exponential increase in, for example, exports of wood,” notes Fugazza.
This gives hope that some Covid-19 effects on trade could be positive, at least for some exporters.
“A necessary condition for this to happen, is the removal of any pandemic-specific trade interventions, such as export restrictions,” Fugazza concludes.