Impact of the COVID-19 pandemic on commodities exports to China
This paper presents a preliminary assessment of the impact of the coronavirus (COVID-19) pandemic on commodities exports to China with a focus on exports from Commodity Dependent Developing Countries (CDDCs).
Results indicate that in comparison to short term tendencies observed in the past three years, total commodities exports to China are currently moving downward. As compared to a situation without the COVID-19 crisis, total commodities exports to China may fall by 15.5 to 33.1 billion US Dollars during 2020, resulting in reduction of the projected annual growth of up to 46 percent (i.e. 8 percentage points). Although CDDCs commodities exports to China are also expected to decrease, the estimated impact is weaker. On aggregate they may fall by 2.9 to 7.8 billion US Dollars during 2020, resulting in a loss in terms of annual growth rate of up to 9 percent (i.e. 1.7 percentage points).
Total effects are driven by strong negative import demand shocks in China faced by energy products (e.g. crude petroleum oils), ores (e.g. iron ores) and grains (e.g. wheat). While CDDCs exports of those products are also expected to fall, estimated annual growth rates of exports of fruits and nuts, soya beans, rice and copper outpace those that would prevail in a situation without the COVID-19 crisis. Differences in import demand shocks at the product level lead to differences in effects at the country level. Even though most countries are expected to be negatively affected, some may see a surge in their exports to China.
While this set of results provides some indication about the effects the current sanitary crisis could have on commodities trade, information about the reaction of trade flows in other major economies is still missing making any definitive conclusion, at this stage, hazardous.