Supply chain issues push global trade to contract in Q3: Report

ANKARA

Supply chain issues pushed the global trade volume to contract in the third quarter of 2021 after four consecutive quarters of strong expansion, according to a joint report released Monday.

The volume of world merchandise trade fell 0.8% in the third quarter, as supply chain disruptions, shortages of production inputs, and rising COVID-19 cases weighed on trade growth, the World Trade Organization (WTO) and the UN Conference on Trade and Development (UNCTAD) said in their report.

Despite the decline in the third quarter, global trade volume was still up 11.9% in the first nine months of this year compared to the same period a year ago.

The nine-month, figure, however, is slightly worse than the WTO's latest estimate of a 12.7% increase during that period, issued on Oct. 4.

"The forecast of a 10.8% increase in merchandise trade for the whole of 2021 could still be realized if fourth quarter data show a pickup in volume growth," the WTO said in a statement.

"Nevertheless, the emergence of the Omicron variant of SARS-CoV-2 appears to have tipped the balance of risks towards the downside, increasing the chance of a more negative outcome," it added.

The report said the main reason behind the decline in the third quarter was weaker-than-forecasted imports in North America and Europe, which translated into reduced exports from those regions and also from Asia.

In the third quarter, imports fell 0.5% in Europe, against a 2.6% growth expectation. Imports also fell in Africa 0.7%, and in Asia 1.3%.

North America's imports were up 0.4% in the third quarter, lower than the estimate of 1.5%.

However, shipments from South America and the Middle East were up 0.4% and 1.6%, respectively.