China satisfies robust Iranian demand for consumer goods, Seabury finds

China satisfies robust Iranian demand for consumer goods, Seabury finds

HONG KONG — Trade between China and Iran has been growing at almost 40 percent a year since 2012, driven by rapidly rising consumer demand, according to a Seabury Group study.

Iranian imports have been “artificially low” because of economic sanctions, and Michel Looten, Seabury director of maritime, said imports lost by Iran over the past three years because of the trade restrictions will be more than redressed, particularly in the consumer goods and automotive sectors, if the measures are lifted in the near future.

"China will be the big winner if sanctions to Iran are eased or lifted, further supporting the trend of Mideast and Indian subcontinent pivoting towards Asia-Pacific," he said at the Global Liner Shipping Conference in Dubai.

The share of Asia to Middle East and Asia to the Indian subcontinent container volume has increased sharply at the expense of Asia to Europe trade since 2012, rising from 26 percent in 2002 to 42 percent by 2018 if the trend continues. Looten estimates containerised trade among the Middle East and subcontinent will grow by 7.4 percent in the next three years, outperforming the global forecast of 5.3 percent.

Most of the export production in India is concentrated on the country’s west coast, well placed to serve the rising demand from the Gulf states for goods such as frozen food, other foodstuffs, consumer products, and textiles.

In absolute terms, growth of trade with Asia Pacific is responsible for most of the additional volume in the last 2 years, with westbound trade from Asia to the Middle East and subcontinent overtaking Asia-Europe container volume within 10 years, Seabury’s analysis found.

Asia-Europe container trade reached 20 million TEUs with a 51 percent share. Asia-Middle East/India was 39 percent and Asia-India subcontinent 10 percent, Looten told delegates.

A total of 7.7 million 20-foot containers were carried on the trade between Asia and the Middle East/India subcontinent in 2013, with the destination split seeing India, Pakistan and Bangladesh accounting for 35 percent of the volume, the UAE 16 percent, Gulf Cooperation Council nations 15 percent, and Saudi Arabia 13 percent.

The import of household goods from Asia increased sharply, mainly into Iran and UAE, whereas export growth mainly came from the Indian subcontinent.

Also speaking at the Dubai event was Mohammad Al Muallem, DP World senior vice president UAE, who said $36 billion would be invested in port development in the GCC and Jebel Ali would continue to be the regional hub.

Port throughput in GCC countries was expected to rise at a compound annual growth rate of 7 percent to 35 million TEUs by 2020. Port capacity will grow from 30 million to 45 million TEUs and utilization is expected to remain around 70-80 percent, he said.

Contact Greg Knowler at gknowler@joc.com and follow him on Twitter: @greg_knowler.