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Shipping
lines operating between Asia and the Mediterranean
attempted to start off the year strong with
an increase heading into January, which
brought the average spot rate up to US$1,158
per TEU from $1,104 per TEU in the final
week of 2012.
The
lines evidently felt confident to follow
up with yet another increase the following
week as the average rate rose to $1,356
per TEU.
One
could have been forgiven for thinking it
was going to be a good year ahead.
But
then the declines began.
This
would kick off six weeks of consecutive
rate falls as shipping lines appeared to
buckle under pressure from either their
customers or due to fears over losing market
share.
Rates
fell below $1,000 per TEU for the first
time in three months to just $960 per TEU
in March.
A
massive rate hike came into effect the following
week ending March 15, bringing rates up
a dramatic 42.3 per cent in a single week
to $1,366 per TEU¡Xclearly an act of sheer
desperation, with little market support
to back it.
Without
anything tangible to justify the increase,
rates have since fallen for three straight
weeks back to $1,073 per TEU.
To
give some perspective on the current rate
situation on the trade, this time last year
the rate was $1,199 per TEU¡Xdown 10.5 per
cent year on year. It must also be noted
that the first quarter last year was a loss-making
quarter for carriers on the trade.
And
what of the outlook for trade itself? The
macroeconomic situation throughout the region
is nothing short of depressing, which lends
credence to the belief that shipping demand
will be limited.
The
two countries within the European Union
with the highest unemployment rates to date
are both Mediterranean countries¡XGreece
and Spain.
Both
nations have unemployment rates in the upper
20-per cent range, while youth unemployment
is nearing the 60 per cent mark.
Greece
has already received financial bailouts,
and Spain is now in danger of needing a
bailout. Cyprus as well is another Mediterranean
nation in need of a bailout.
France¡Xwhich
can be included in the Mediterranean¡Xand
Italy are economies that the European Commission
has expressed concerns over due to their
economic imbalances, Reuters reports.
Of
course the Mediterranean does not consist
only of southern European nations. Also
included are the North African nations of
Tunisia, Morocco, Libya and Egypt. For trade
purposes Lebanon, Israel and Turkey are
also included as part of the region.
Many
of these nations are in the economic red
zone too.
At
the end of March thousands of protesters
in Morocco gathered in the nation's capital
of Rabat in response to the government's
inability to stem rising unemployment and
the high cost of living, reports All Africa.com.
In
Tunisia the economy is struggling and unemployment
remains around 17 per cent, while Egypt
is in a similar situation, relying on aid
money from Qatar as poverty, unemployment
and inflation continue to rise in the country.
It has also suffered from strikes that have
blocked access to the port, which obviously
spells bad news for trade.
The
ongoing civil war in Syria has had obvious
negative implications for the nation's economy
and trade.
Forecasts
for economic growth in Lebanon have recently
been downgraded for 2013 and 2014, while
Turkey and Israel appear to be the only
two nations in the Mediterranean region
that anyone has anything good to say about.
However,
it must be noted that Turkey's economic
growth has slowed considerably, according
to recent news reports that reveal the nation's
GDP slowed to 2.2 per cent growth in 2012,
after a poor fourth quarter performance.
Sure 2.2 per cent growth is a lot better
than what many of its neighbours are encountering,
but it had been growing in the high single
digits.
Meanwhile
the Bank of Israel reports that the macroeconomic
data coming out of Israel in the first quarter
indicates a positive turnaround. Nevertheless,
the central bank did add that at this stage
it was too early to determine whether this
improvement signaled a sustained rebound
or a ¡§temporary correction following weak
growth¡¨ MSN Money reports.
Overall
it is a very bleak picture for the Mediterranean
region on the economic front, and by virtue
of that it could be argued that it will
be a challenging year for the Asia-Mediterranean
trade.
The
one salvo, however, is the fact that the
Mediterranean does act as an important link
to other trades, and many of the ports throughout
the region already act as significant transshipment
hubs.
With
18,000 TEU ships entering the market on
top of the 13,000 TEU mega ships that are
already deployed there are some industry
insiders that see this as good news for
the Mediterranean.
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