TORONTO: The latest trade figures from Vancouver’s busy Pacific port reveal a steep drop in coal and crude oil exports, as well as a steady increase in grains and pulses, providing a glimpse at macroeconomic developments ranging from China’s slowing economy to the explosion of shale oil production in the United States.
Port Metro Vancouver released its midyear statistics for 2015, showing a steady increase in shipments heading toward Asia’s growing middle class, while revealing specific signs of weakness and slowing growth in East Asia’s major industrial economies.
The stats also hinted at a surprising resilience in Canada’s economy, despite talk of the country being in a recession, according to Port Metro Vancouver chief executive Robin Silvester. He pointed to the 7-per-cent year-over-year growth of auto imports, combined with a 5-per-cent growth in outbound Canadian containers filled with high-quality pulses, lumber and pulp.
“Those are the ones, to me, that were a little bit surprising and quite encouraging,” Mr. Silvester said in an interview. “It would perhaps point to the economy over all not being quite as bad as we might be fearing. We’re obviously hearing about being in a structural recession, potentially. ”
Shipments of thermal coal, which is used for generating power, fell 6.6 per cent year-over-year, while metallurgical coal used for steel making fell 0.3 per cent. Most coal shipped out of Vancouver heads to China, where there has been a gradual economic slowdown that has hit export-oriented factories and steel mills, even as Beijing attempts to wean the world’s most populous country off its smog-producing coal power plants and toward nuclear and green energy.
But while the port’s stats show crude oil exports also fell a remarkable 20 per cent, that has almost nothing to do with China – since most of the exports head south to the United States, where the shale oil revolution has reshaped the energy landscape.
Fertilizers, on the other hand, rose 18.2 per cent, while speciality crops (such as peas, beans and lentils) rose 13.1 per cent and animal feed rose nearly 36.8 per cent. Both of these, Mr. Silvester says, point to growing demand among’s Asia middle class for higher-quality food and food products – such as richer consumers in China eating more meat, and agribusinesses consequently requiring more animal feed, as well as prosperous consumers in India who want higher-quality items such as lentils.
At the same time, however, the Vancouver port statistics show that value-added jobs on this side of the Pacific remain constrained. Processed grain products fell 21.2 per cent, while the category that includes vegetable oils fell 9.3 per cent.
“It is heartening to see the numbers for agriculture-based commodities, as this really is indicative of where our strengths lie in the future,” says Stewart Beck, Canada’s former high commissioner in India and the current head of the Vancouver-based Asia Pacific Foundation of Canada.
“The growing middle class in Asia will be demanding higher-quality foodstuffs and with more income there will be more demand for food. Ideally, we should be adding value in Canada – but that, unfortunately, is not reflected in the numbers. This is an area where more thought is required to capture the added value, which will ultimately create more jobs.”
