- In the second quarter, world exports of IGs rose by 47% year-on-year, continuing the uptrend since the peak of the COVID-19 crisis last year
- Growth was strongest for transport equipment, which grew 69% and represented a recovery from a low base
- Africa greatly increased IG exports to Asia by 98%, while Asian IG exports to South and Central America rose by 91%
- The US intensified its imports of IT components from Southeast Asia, especially from Malaysia and Taiwan
World exports of intermediate goods (IG), such as parts and components, continued their upward trend in the second quarter of 2021, sustaining the growth of the first quarter, according to a new World Trade Organization (WTO) report.
In the first half of 2021, trade in IGs from most top exporters had largely exceeded 2019 pre-pandemic levels. In the second quarter, world exports of IGs rose by 47% year-on-year, continuing the uptrend since the peak of the COVID-19 crisis in the second quarter of 2020 and improving on the 20% growth in the first quarter of 2021.
IGs are inputs used to produce a final product. They range from crops used in food production to textiles and metals needed to manufacture goods. Trade in intermediate goods is an indicator of supply chain activity, which was severely impacted in the early stages of the COVID-19 crisis.
Growth was strongest for transport equipment, which grew 69% in the second quarter. This is a recovery from a low base after the strong decline observed for the sector in the second quarter of last year, with the automotive industry suffering the most in terms of demand and supply chains during the peak of the pandemic, WTO said.
Exports of food and beverages increased the least in the second quarter of 2021, up by 29%. Unlike other industries, the food sector did not show a marked slowdown from a year ago, thus requiring a lower recovery effort.
China was the top exporter of IGs in the second quarter at US$354 billion, up 42% year-on-year and largely exceeding its pre-pandemic export levels.
Australia’s IG exports increased the most during the first half of the year (74% in the second quarter further to 61% in the first quarter). This was mainly due to exports of iron ore concentrates used by the steel industry, and exports of wheat and meslin.
Brazil, a newcomer among the top 15 exporters in the second quarter, increased its IG exports by 48%, with a big rise in exports of soybeans to China amounting to $12 billion and accounting for more than 20% of Brazil’s total exports of intermediates.
China was the main purchaser of industrial inputs. Its imports grew by 45% year-on-year to $425 billion, keeping on recovering from the COVID-19 crisis.
The United States intensified its imports of IT components from Southeast Asia, and more especially from Malaysia (processors and integrated circuits) and Taiwan (parts and accessories for data processing machines).
India kept on with the biggest growth in IG imports since the beginning of the year, posting a 119% increase in the second quarter, essentially linked to non-monetary gold, non-industrial raw diamonds and integrated circuits.
The exchanges of industrial inputs among Asian economies totaled $706 billion, growing by 43% year-on-year in the second quarter.
The highest inter-regional growth was for Africa towards Asia, by 98%. African companies shipped notably precious metals, iron ore concentrates, copper cathodes to their partners in Asian supply chains. The highest intra-regional growth was for South and Central America (72%), mainly shipments of copper cathodes and agricultural products (wheat, soybeans, maize).
Asian exports to South and Central America grew by 91%, mostly vaccines, photovoltaic cells, phosphate, integrated circuits and gear boxes.
Photo by Bayog, Zamboanga del Sur Municipal Government
