Data from the Kiel Institute for the World Economy showed that global trade fell by 2.8% in the February-March period, as the conflict between Russia and Ukraine led to a sharp drop in container shipments from the two countries.
Most affected was global trade with Russia, where imports fell 9.7% year-on-year in March, while exports fell 5%, the institute’s data showed. The KieltradeIndicator tracks shipping data for 500 ports in real-time and seasonally adjusts the total value of imports and exports, providing a measure of trade activity.
In 2017, the Kiel Institute was listed as one of the 50 most influential think tanks in the world, especially in economic policy, and it was also ranked among the top 15 in the world. German business newspaper Handelsblatt called the institute “Germany’s most influential economic think tank”, while Die Welt said “the best economists in the world are in Kiel”.
“Distortions from the Russian-Ukrainian conflict and Western sanctions, as well as a high level of uncertainty for companies with ties to Russia, are clearly weighing on trade in March,” said Vincent Stamer, director of Kiel’s trade index.
Container traffic at three of Russia’s busiest container ports has halved in the past month due to sanctions imposed on Russia and the withdrawal of many Western brands, the agency said. It added that Odessa, Ukraine’s main port on the Black Sea, had been “almost cut off from international maritime trade”.
In addition, the Russian-Ukrainian conflict also had a “chilling effect” on EU trade, with EU exports down 5.6% and imports down 3.4% in March. The impact on the U.S. was more modest, with exports down 3.4% and imports down 0.6%.
The figures match those compiled monthly by JPMorgan and ratings firm S&P. The data showed that the global export purchasing managers’ index (PMI) fell to 48 in March, down from 51 the previous month and the lowest level since July 2020, when many countries imposed strict Covid-19 restrictions.
The March reading was below 50, indicating that most businesses reported a contraction in exports compared with the previous month. The PMI data showed that the decline in global manufacturing exports was geographically broad, with two-thirds of countries surveyed reporting contractions.
The conflict has disrupted supplies of key resources and commodities such as corn, wheat, potash, neon, nickel and palladium from Russia and Ukraine, pushing up energy and food prices and suppressing several car and trucks manufacturers manufacturer’s production. Russia and Ukraine are the world’s two largest suppliers of commodities.
The institute noted that trade pressures are likely to increase as the United States and the European Union (EU) prepare to impose a new round of sanctions on Russia.
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