COMCEC Trade Outlook 2016
5
Figure 2: World Export Volume Growth
Source: WTO
The upward trend in the world merchandise trade over the past decades was characterized by
the changes in the patterns of global trade. Four main patterns in this period were the change
in the composition of trade due to mainly commodity price developments, increasing
participation in global value chains, rising share of the developing countries and the
proliferation of preferential trade agreements. 4
Commodity prices increased steadily beginning from 2003
due to increases in global industrial production, especially in
emerging Asian economies (mainly China), the increasing
political instability in the Middle-East, supply constraints in
oil and depreciation trend in US dollar. After a severe fall in
2009 due to the global economic crisis, commodity prices
increased sharply by around 26 per cent both in 2010 and 2011. However commodity prices
have been in a declining trend since 2012. In 2015 commodity prices plummeted by 35.4 per
cent mainly due to slowing demand in especially in emerging economies, weak economic
recovery in advanced economies, increases in oil and metals supply and a strong US dollar.
Prices of most commodities fell, however the fall in energy prices was more pronounced than in
metals and food. According to WB (2015), China’s share is 13 percent in world commodity
imports and its share goes up to 40 percent for certain metals. Deceleration of growth in China
resulted in a decline for basic metals demand. Along with the increases in the supply of most
metals, metal prices fell markedly with 23.1 per cent in 2015.
The decline in food prices in 2015 was mainly driven by lower energy prices and improved
harvest. As energy prices are an important cost component of agriculture, lower energy prices
reduced the cost of producing food commodities resulting in lower food prices. (World Bank
2016)
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“Four main trends
shaped the global
trade ”