Volatility in EU markets hits shipping trade

The persisting Eurozone crisis is affecting global trade. The knock-on effect will have an impact on Asian export oriented countries with a decline in exports, said Colombo Shippers’ Academy President, Rohan Masakorala. He said that the impact of the Eurozone economic crisis is already evident with a drop in Sri Lankan export volumes.

However, intra-Asia trade still remains stable but the euro crisis and weak recovery of the US does not augur well for world trade in the medium term. Volatility in commodity prices and markets would continue. The economic turmoil in Europe has a direct impact on shipping and volumes will slow down as the growth of China and India is cooling down. Europe should emerge from the debt crisis at least by 2013 for global trade to recover.

Europe's debt crisis returned after weeks of relative calm this week affecting markets in the region. Grim statistics from some of the biggest European economies, mixed signals from bickering eurozone political leaders and mass protests against austerity in Greece indicate the crisis is far from over.

Masakorala said that Sri Lankan ports are being developed to handle global and regional shipping needs.

The Hambantota port is good for bulk, ro/ro ships and for support services, while Colombo will have greater capacity and infrastructure by 2013 enabling leading shipping lines to concentrate on making Colombo a relaying/transshipment hub.

- LF