East Coast South America containerized imports in May collapse

East Coast South America imports of containerized goods during May reached a low not seen since 2009, dropping to 205,481 TEU according to DataLiner. All tradelanes have been affected although the biggest drops in absolute terms were seen in the Far East. And June looks set to extend the trend, as container vessel calls dropped substantially compared to previous months.

Exports in May in the meantime reached an all-time record as Brazil and Argentina benefit from a low exchange rate, US-China trade wars, compounded by COVID-19 restrictions to US meat packers and swine-flu afflicted Chinese livestock. Total exports reached 293,056 TEU.

In January when news of COVID-19 was starting to hit the headlines around the world and Chinese ports shut down as workers quarantined, the immediate reaction was to expect import volumes to drop substantially from March. But as the months went by, that dramatic drop did not fully materialize. Until now.

The previous lowest figure for May imports over the last ten years was 227,199 TEU, recorded in 2016, with the highest number being 276,726 TEU in 2018.

A Tale of Two Cities

When you look at the first five months of the year it’s a tale of two cities. January 2020 actually saw very strong imports at 285,381 TEU, the highest January on record. February too was very strong. If it were not for COVID-19, more than likely 2020 was going to shatter all records. It was that strong start to the year that helped the five-month cummulative figure for 2020 imports remain around average, at 1.246 million TEU, in line with previous years.

Source: DataLiner

Exports in the meantime continued to grow strongly, up 3.3% in the January to May 2020 period compared to the same period in 2019, driven principally by meat exports. Pork shipments, in particular, from both Brazil and Argentina have surged as China continues to suffer with the effects of the African swine-flu.

Last year had seen the highest May export figure on record at 286,956 TEU. Considering the depressed global economic scenario, it is impressive that this May’s volumes reached 293,056 TEU.

Outlook for June looks like more of the same

However, the outlook for the next few months looks shaky. Brazil, in particular, could potentially turn more vulnerable as the COVID-19 crisis continues to grow. Over the last few days some slaughter houses have had their export certificates to China suspended due to alleged corona-virus cases, drawing a potential shadow over the export bonanza. In the meantime, unemployment is rising despite government attempts to get the economy restarted, meaning domestic demand for foreign goods is likely to continue to drop.

Container vessel calls in Brazil during June certainly fell substantially indicating more of the same to come. Shipping lines continue to pull vessels from services through blank sailings. In June there were at least four – while at the same time introducing extra-loaders to bring back empty reefer boxes to supply the growing meat and fruit exports. Freight rates thus remain reasonably healthy although noises from shippers about a lesser service begin to surface.

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