challenges and opportunities of the system before the virus
– the trading system before the covid-19 virus in Egypt was getting better as Africa has great importance to the Egyptian affairs, while there are still challenges facing the trade exchange between Egypt and Africa, represented in transport, cash transfers and guaranteeing export risks.
Availability of the figures announced by the Ministry of Trade and Industry data for growth in Egypt to African countries 2018 to reach 3.557 billion dollars against 2.736 billion dollars, by 30%, and the value of imports from those countries increased by 39.8%, to record about 1.29 billion dollars against 923 million dollars.
Challenges:
As well as Egypt’s absence from investing in Africa, making other countries benefit from the wealth of those countries, which requires the necessity of restoring Egypt’s role in those countries, which coincides with Egypt’s presidency of the African Union, which makes us go to the continent at all levels, whether industrial, agricultural, service or commercial investment. That makes us strive to determine the needs of these markets for all commodities, by preparing a modern database of the most important companies based in Africa and cooperating with them.
Opening new horizons for economic cooperation with the Nile Basin countries must remain a major goal for the supreme interest but rather for Egyptian national security, through several executive steps such as inviting Egyptian businessmen to establish joint investment projects in countries that have the most promising opportunity, and making contacts with government agencies In the Nile Basin countries, through the Egyptian embassies and commercial representation offices, to learn about investment opportunities, available projects and required technical support.
Also providing storage space in one of the Nile Basin countries “Ethiopia, considering the presence of the source of the Nile in it starting from Lake Tana” for the Egyptian goods as a present good, which then represents a focal point for the export of these goods to the African neighboring countries from the Nile Basin countries “Sudan – Kenya – Rwanda – Burundi – Tanzania – Uganda “and work to set up exhibitions of Egyptian products and encourage participation in foreign exhibitions and coordination between businessmen to reduce participation expenses and maximize the benefit by agreeing on available shipping spaces and exhibition spaces.
implication of virus on the position of country that are dominating the system.
As shown in the two tables ranking of imports and exports in top 10 countries before covid-19 virus.
As china dominating the trading system
-China’s exchange numbers wrapped up 2019 on a solid note as development of both imports and exports accelerated in December in the midst of improving manufacturing action and positive signs in China-U.S. exchange relations.
Products exports developed 7.6% year-on-year to $237.7 billion final month, finishing four straight months of compression, information (connect in Chinese) discharged Tuesday by the Common Organization of Traditions appeared. The December growth rate was the highest since March and beat the median estimate of a 4% increase by a Caixin
China’s trade volume for all of 2019 shrank 1% to $4.6 trillion, as exports extended 0.5% and imports contracted 2.8%. Trade surplus come to $421.5 billion, higher than in 2018 and stamping the third most noteworthy since 1950, as it were after 2015 and 2016, according to traditions information compiled by economic information supplier CEIC.
-The relationship between China and Egypt (2018)
– If we focused on the Chinese imports from Egypt we are going discover that China is importing from Egypt Mineral powers, oils and refining items by about USD 730.40 Million, whereas bringing in plastics by USD 72.91 Million and bringing in Egyptian Cotton by USD 12.16 Million.
• The Egyptian economy emphatically depends on the Chinese businesses as Egypt imports around 14% (USD 11.52Billion) of its add up to imports from China. Nearly USD 3.40 Billion for Electronic hardware, around USD 545 Million for Plastics, Artificial Fibers by USD 760.51 Million, Artificial staple filaments for USD 450.77 Million, Clothing by about USD 295 Million and other made Material articles by USD 20.10 Million.
How the system is affected by the virus?
Sure COVID-19 pandemic has negative effect on trading system over all as most of the countries are nearly closed economies to avoid spreading of the virus inside their country, most of the countries stop imports except necessary materials as food materials.
in February as OPEC+ producers attempted to arrange a production cut, in the midst of concerns that COVID-19 might affect demand. Russia walked out on these gatherings, and Saudi Arabia reacted by undercutting oil costs by $6-8 per barrel.
The world went into lockdown, energy demand scattered, and oil producers kept on pump at will. At that point on April 9th, about a full month after COVID-19 was announced a pandemic, Russia and Saudi Arabia at last settled their differences but this truce came too late as prices had already fell about 60% from February highs.
Since Travel shuts down around the world amid the COVID-19 pandemic this impact on Cutting global demand by up to 33%.
but then prices suddenly sunk below zero, with May futures for WTI oil closing at -$37.63 on April 20th. For the first time in history, producers were willing to pay traders to take oil off their hands.
As there is excess supply and cutting global demand as a result there is a historic glut that is filling up the world’s storage capacity both on land and at sea.
In March, it was estimated that 76% of the world’s available oil storage capacity was already full.
A record-setting 160 million barrels of oil is being stored on tankers at sea, according to Reuters.
The cost of renting an oil super tanker has gone through the roof. It’s jumped from $20,000 per day to $200,000-$300,000 per day, according to Rystad Energy.
OPEC+’s tentative plan would see the output curbs tapering off after two months, depending on the evolution of the coronavirus. The 10 million-barrel-a-day cut may shrink to 8 million a day from July and then 6 million a day from January 2021, according to one delegate.
Saudi Arabia will apply its reduction to a production level of about 11 million barrels a day, a delegate said. That’s lower than recent output levels, which rose above 12 million a day in early April.
The oil price war, which started in March after the collapse of previous OPEC+ talks, lasted exactly 31 days, far fewer than similar feuds in 1986, 1998 and 2016. But in that short period, it has forced companies from Big Oil giants to U.S. shale independents to slash spending, fire workers and cancel projects. Meanwhile, oil-rich countries have gone cap-in-hand to the International Monetary Fund and the World Bank for help, hobbled by low prices.