Posts Tagged ‘Economic growth

05
Sep
11

India Imports Up

If there is any doubt why India is entering into expansion mode with their ports, then last weeks numbers of gross imports will help put that into perspective. Asia’s third largest economy cracked the scales with an increase of 31%  in the April/May, compared to the same period last year.

Container Ship

Imports Soar in April May

Crude oil imports continued to increase along with edible oil and pulses (peas, beans and lentils), according to official figures. India imports close to four fifths of its oil. According to country’s Commerce ministry sources, India imported 13.58 million metric tons of oil in July, up by 2.6 percent that is up by 3.13 million barrels a day.

Large developing nations clamoring for the black gold could drive up prices and slow down development but I argue whether or not Middle Eastern or other big exporters of oil would let prices to too high, in favor of increased economic development.

The country’s imports of pulses and edible oil, went up by 24.7% in the April-May period this year. India’s import of pulses, shot up by 38.6%

Items such as food grains, automobiles, milk and beverages fall in the sensitive category and the import of these goods is monitored by the government to see if there is any adverse impact on the domestic industry.

During the first two months of the current fiscal year, the import of items such as alcoholic beverages and spices also increased by 60.4% and 30.5%, respectively. However, imports of food grains, fruits and vegetables, tea and Coffee contracted by 81.3%, 1.9% and 42.6%.

Coffee Drinkers are Getting Their’s Local

Since 1950 the total area of planted coffee in India has exploded. For the Arabica bean it has increased over 300% and for the Robusta bean, it has grown over 1000%. More and more young Indians are taking to the drink than ever before. With a very low average age (65% of the population is under 35 and it’s expected that the average age in 2020 will be 29 years old) in India and a more affluent generation coming onto the scene, many of them are taking to the cafe’s to relax, carry on business, or just get away.

Demand is Calling

Last month, we wrote on the blog about a new planned investment of $60 billion to expand and renovate Indian ports. This investment is part of a  bigger $1 trillion dollar initiative aimed at bringing the ports, roads and infrastructure in the country up to speed by the year 2020.

Leif Eskesen, of economist at HSBC Holdings Plc said,“If there isn’t enough capacity, you lose time and it adds to cost.” India is working on fixing this. An industrial expansion and high food prices, resulting from the combined effects of the weak 2009 monsoon season and inefficiencies in the government’s food distribution system, fueled inflation which peaked at about 11% in the first half fo 2010, but has gradually decreased to single digits following a series of central bank interest rate hikes.

There’s a lot that can be done with a trillion dollars. It looks like India s up to the task. All eyes are on Asia right now. India and China have a lion’s share of the focus but there are many other emerging markets that are pushing container demand around our region. At Pacific Tycoon, we supply them with the necessary containers to transport the cargo. Contact us to see how you can invest in shipping container, earn guaranteed money, and free up a portion of your volatile stock portfolio for a safer alternative.

Image:ProvidenceEdu

Source: IndiaCoffee, CommodityOnline

01
Sep
11

Shipping Industry Rebound

There’s a lot of good news if you’re looking to make containers a part of your investment portfolio. Demand is Asia, most notably India, China, Singapore, are all rising. Development of these countries and those around them, is at record levels. In two separate reports we found this week, consumption in Asia is the main driving force behind the push from poverty to the acquisition of wealth and material goods that just a few years ago was a far stretch for many of the citizens of Asia. It’s amazing how fast things change in the world we live in today. Countries are pivoting quickly with the help of advanced technology, communications, and increased levels of education.

Containers

Industry in China is Growing

China Merchants Holdings, a diversified conglomerate with big investments in shipping and ports reported first half results earlier this week that were double the same period last year, thanks to a revaluation gain on its investment in Shanghai International Port Group and the appreciation of its office building in Sheung Wan, reported the South China morning Post.

The company also reiterated what we talked about last month about the moving of industry inland in search of cheaper labor. On the mainland, ports at Shenzhen West reported a 0.6 per cent fall in first-half container throughput due to a slowdown in exports in the Pearl River Delta, compared with 12.9 per cent growth on average in mainland ports.

“The slowdown in growth in Shenzhen is a long-term problem as the trend for factories to move out is irreversible, but Shenzhen still has a geographical advantage,” said Vice Chairman Li Jianhong.

Due to the influx of business moving inland, handling fees at Shenzhen port were frozen in the first half, compared with a five to eight per cent rise in handling fees in the Yangtze River Delta and an up-to-15 per cent rise in the Bohai Rim (also known as the Bohai Economic Rim or BER, which is the economic hinterland around Beijing and Tianjin).

This migration of business is rapidly developing the country and bringing new jobs to an unprecedented number of people in rural areas, who just a few years ago were moving to the coastal areas in search of work.

Growth is Driving India to Prosperity

In India the shipping industry is rosy, too.

The Indian shipping industry recorded an increase of over 20 per cent in business in the last financial year and in the first quarter of this year, which is expected to continue, said Shreyas Shipping Chief Financial Officer Vinay Kshirsagar.

Almost 90 percent of India’s trade by volume (70 per cent in terms of value)  is conducted by sea. With the largest merchant shipping fleet in the developing world, India’s maritime sector is set to grow to a size of $80 billion by 2020. The expected volume handled in 2020 would be approximately 1.7 billion tonnes.

While demand drivers like trade growth and geographical balance of trade (which determines the length of haul required) are very positive, the supply drivers like new ship building orders, scrapping of existing tonnage, etc, also indicate a good future for the Indian shipping and logistics sector. This is further given a boost by the privatization of ports and the strong thrust on infrastructure, said Nicky Mason, managing director, Informa India.

India is the world’s second most populous country and their consumption is rising along with their incomes. India is investing big money in its ports to calm inflation and keep the demand that is driving it up at bay. With big money being spent on ports and infrastructure, India will continue to be one of the biggest players in the region.

Growth in Asia is good for Container Owners

Owning containers is easy. Managing them is a different story. That’s what Pacific Tycoon does best. We are located in Hong Kong, in the heart of Asia, with the skill, experience, and knowledge to put your containers to work and start earning you a good income. It all boils down to the most simple of economic laws: supply and demand.

If there is sizeable demand for a product or service you can charge more. Demand in Asia is sky-rocketing and our containers owners are getting paid very well, to let us manage their investment. Contact us and let us show you how you can diversify your investments by owning containers and lease them to the very companies that supply the region with the necessary goods to do business.

Image: TopDealFinder

Source: HellenicShipping, CargoNewsAsia

31
Aug
11

Singapore Keeps Building

Singapore is home to the second busiest port in the world. Where there are goods coming in and out of a port, there’s sure to be a lot of other action going on. Last week to keep up with all the activity, Jurong Port, which is the largest terminal in Singapore announced it had awarded a big contract to help keep cement coming into the country. Cement’s for building. Building means expansion.

Singapore, Marina Bay Sands

Big Building Plans

According to recent figures released by the Building and Construction Authority of Singapore (BCA), building and construction contracts in 2Q11 grew by 10.6% year-on-year. Public contracts saw a near 2.5 times leap over the same period last year, showing a renewed political will to drive up infrastructure construction.

Jurong Port has awarded a $24.86 million contract to a joint venture led by McConnell Dowell to design, supply and install a new cement handling system.More than 90 per cent of the cement requirement of Singapore’s construction industry is imported through Jurong Port, so upgrading to increase efficiency only makes sense.

Singapore’s Importance

As far back as the 13th century, Singapore has been an important trade destination for Asia. What started out as a simple location to trade ceramics and spices to the surrounding area has blossomed into the worlds largest port.

Since Singapore has very little land to call its own and zero natural resources, their economic model is based on importing raw materials and the refining them (oil and wafer fabrication) or manufacturing products with them. The electronics and biomedical manufaturing sectors account for over 50% of Singapore’s manufacturing industry.

That economic model, which some have deemed the, Singapore model, serves them just fine. Singapore’s open trade economy and important position as a port serving shipping lines from Asia to the America’s has helped the economy grow at average rate of  over 8% since 1965.

Since the Singapore economy is so heavily dependent on exports and foreign trade, economic downturns in other countries severely effect the Singapore’s growth.  For example, after the dot-com crash and the subsequent recession that followed, GDP growth was -2% for the year of 2001 and just barely positive the next two. In 2004 , as things got better, the country swung around to a 8.5% increase n GDP. As things began picking up steam even more last year the country grew by over 17%.

Tourism and Service Industries

Since Singapore has billed itself as an Asian technology and financial power house, they also attract a lot of foreign money due to low taxes and a favorable business environment. The opening of 2 casinos in 2010 has already made Singapore the world’s second largest gambling destination behind Las Vegas.

Aaron Fischer of CLSA, expects the combined gaming revenues of both Singapore resorts to generate $5.1 billion in 2011, up from his previous estimate of $3.9 billion. Goldman Sachs also expects the sector could bring in $5 billion in 2011.

Pacific Tycoon is a leading container management company in Asia. Contact us and let us show you how you can make money from owning shipping containers.

Image: Archithings

Source: HellenicShipping, StockMarketReviews, StraitsTimes, BusinessInsider, USStateDept

26
Aug
11

European Forecast Gets Worse

Sometimes, it feels like when it rains, it pours. If you’re an investor, or even a citizen of Europe, you’re probably feeling like this now. Financial markets in Europe are getting rocked. Not only are they dealing with a possibly crippling debt situation, they’re also feeling the pain from the uncertainty from their neighbors across the Atlantic that are closely approaching a dreaded double dip recession. Europe and America are tied pretty tight and both of them seem to be stuck in a shaking room getting bounced from one side to the next. The earthquake on America’s east coast Tuesday could be a foretelling event of more disaster to come.

Campfire

Asia Demand is Another Problem

In a report from Russia’s Port News, LNG (Liquid Natural Gas) is in high demand in Asia as more and more countries expand. LNG from Europe is being shipped to Asia where it is bringing in higher prices. Most notably South Korea and Japan are two of the biggest consumers. South Korea just inked a $84 billion deal and Japan is a heavy importer as well, especially after the disaster that caused the meltdown of its plant earlier this year.

“Asian demand could easily take virtually all the LNG in the market, leaving little over for liquid markets like the UK and the Netherlands,” said independent LNG analyst Andy Flower.

South Korea and Japan are the two largest importers but increased demand in China and other smaller Asian nations willing to pay oil-linked prices is set to tighten the market as production struggles to keep up with supply.

Higher Prices for Europeans

“This looks to be a scenario where northwest Europe could find itself short of LNG, which will force prices up to attract what LNG is available and/or bring in more pipeline gas from Russia,” Flower said.

Japan’s LNG imports hit a record high above 7 million tonnes in July, up from 5.9 million in July 2010, according to Waterborne energy analysts, which monitors global LNG flows.

For all Asian importers, Nigerian supply to Asia jumped by more than 10 times to 819,000 in July this year from 73,000 in July 2010, according to Waterborne.

Less LNG could help push prices higher next winter in big, heavily traded markets such as the UK, analysts say, adding that their prices have the potential to reach parity with oil-indexed pipeline gas coming from Russia and Norway.

Troubles are Apparent

Investors vote with their dollars and therefore the most telling signs of optimism or pessimism are reflected in the stock markets. Investors in Europe are voicing their fears. The FTSE 100 (UK’s benchmark) is down 13.44%, the DAX (Germany’s benchmark) is down 18.72%, and the CAC 40 (the French benchmark) is down 19.52% for the year. Investors are scared and when the winter comes, it looks like they’ll be shelling out more money to keep warm, too.

Asia is the train that is roaring through the world right now and pulling the developing nations along with it. It’s a tough task, but consumer demand and building are driving imports and keeping the rest of the world just above water. Contact Pacific Tycoon to see how you can get involved in this phenomenon.

Image: AllPosters

Source: PortNews

25
Aug
11

Rotterdam Port Sees Huge Container Increase

Some are worried about the effects on global trade that the current European debt crisis and the American economy, which is teetering on the brink of a renewed recession, will have.  There are many reasons to be worried. The banks and governments in Europe have themselves in bind. Investors are fleeing the stock markets and fleeing toward safer investments like gold and other precious metals.

World Port Center, Wilhelminapier, RotterdamLooking Down on What’s Going on

Despite the worries that accompany the mess in the western world right now, there are many places in Asia that are booming. The largest port in Europe can confirm that.

Last week, the Port of Rotterdam posted what it said was a “good first half”. The first half of this year has brought with it, container traffic increases of 12.3% compared to the 1st half of 2010, to 61.8 Mt, and 9.7% in unit terms to 5.954M TEU.

Where’s the Growth Coming From?

We’ll give you one guess. “Container throughput remains above expectations,” said Rotterdam port authority, “thanks to new services especially to and from the Far East and South America, significant increases in transhipment, especially in Russia, and a steady recovery of intra-European traffic, with the United Kingdom and Ireland being the most important markets.”

Hans Smits CEO of the Port of Rotterdam had this to add:  ‘On the whole, throughput has maintained the high level of 2010. This also applies to investments from both the Port of Rotterdam Authority and companies. The growth in total throughput was hindered mainly by the loss in handling of oil products, which was very strong in the first quarter of 2010. Maintenance work to refineries was also relatively high. The 7 million tonnes decrease in the oil sector was almost entirely compensated by the more than double-digit growth of containers.”

Asian Benefits

From the growth in Rotterdam to the increase in milk consumption that is driving trade with New Zealand, Asia is taking over as the world’s leading consumer. Hiccups in the western world economies used to severely hinder trade. There’s no doubt that American consumption, which accounts for 70% of their GDP, has a huge influence on the world economies, yet the dependence of the other world economies on that consumption is getting less and less.

Developing nations in Asia, Africa, and the Middle East are quickly adding infrastructure and jobs. These investments are fueling consumer demand for goods and services that they envy in their western counterparts. Last year for example, Apple sold 47.5 million iPhones. 80% of those sales came from overseas. The average salary monthly salary in China is $273.

Despite the huge price tag of the iPhone and other consumer goods that consumers crave, they’re wiling to part with the cash to show off the fact that they own one. Materialism is a funny beast and it can grab even the most cash strapped individual and force them to do things they normally wouldn’t just to own that item that their friends have.

With development of many of the Asian countries just beginning, there doesn’t seem to be a slowdown in this area of the world any time soon. Let Pacific Tycoon show you how you can benefit from this growth.

Image: Dick Korevaar, Panoramio

Source: WorldCargoNews

24
Aug
11

New Zealand Growth Fueled by Asian Demand

The growth in Asia is a hot topic. It has been for years now. It’s evident everywhere, especially when you travel. More and more Asians are becoming affluent and buying designer clothes, expensive cars, and traveling to other countries. The amount of money being poured into these economies is staggering, from the investments in ports and infrastructure to the foreign businesses that are moving in and taking advantage of lower cost labor or chain stores and international brands that are coming in to grab a piece of the consumer action.

Tauranga, NZ

I read this past weekend a report of the New Zealand port of Tauranga. The first report that caught my eye was “Tauranga port sees record profit from cargo growth “. The port announced profits of 17% on the year ending June 30th. 

What’s driving the growth?

Trade volumes were up 12 per cent to 15.4 million tonnes, while container traffic increased 15 per cent to 590,506 20ft equivalent units (TEU).

Exports of logs were up 14.5 per cent to 4.4 million tonnes, kiwifruit was up 3.8 per cent to 757,000 tonnes and dairy was up 4.6 per cent to 588,000 tonnes.

“This trade included 78 per cent more international volume and more than three times the export volume of Port of Tauranga’s nearest competitor.” said John Parker, Chairman of the port. He also added”Despite the patchy economic recovery, we have enjoyed strong growth in trade volumes.”

Chief executive Mark Cairns said he was proud of the result. “I think it was a cracker year across all parts of the business and positive about the coming year, in particular around the container terminal side of the business.”

What does this have to do with Asia?

At the bottom of each of the articles I read was a small piece about the influence that Asian economies are having on the export business of New Zealand and neighboring exporters. And then there is this Bloomberg article, which reports that Chinese imports of New Zealand milk has jumped 500% since 2008.

Asian consumers are demanding more protein as incomes and nutrition levels rise, said Con Williams, rural economist at ANZ National Bank Ltd.

Other countries that recorded the largest growth in imports include India and Sudan. India’s imports of New Zealand dairy products more than doubled to NZ$162 million last year, according to government data. The value of Sudan imports jumped to NZ$114 million from NZ$39 million in 2008.

20 years ago the average westerner walking down the street towered over his Asian counter-parts. That has changed drastically in the last 20 years. One of the first beneficiaries of that change was Taiwan. Factories in Taiwan sprung up quickly 20 years ago and many have left the island in search of cheaper labor in China, but the effects are long-lasting.

20 years ago, what some people refer to as a healthy child with a little “baby fat” was an anomaly there. Those days are gone. Friends of mine are teachers in Taiwan and in a visit there last year, I witnessed the explosion first hand. A visit to a high school there showed me this unexpected surprise. Many of the kids there towered over me.

Higher standards of living

In his report in April of this year on the International Monetary Funds Economic Forum, economist Anoop Singh, Director of the IMF’s Asia and Pacific Department said, “Economic growth averaged 8.3 percent across the region in 2010, on the back of both strong exports and domestic demand. Asian exports, especially of high-tech products, have benefitted from higher global investment, and domestic consumption and investment from rising employment, abundant credit, and supportive macroeconomic policies.”

In regards to future growth, Mr. Singh had this to add, “Growth is likely to remain robust, averaging 7 percent in both 2011 and 2012 (compared to 4.5 percent global growth). China and India will remain in the lead, and their growth will increasingly benefit other economies in the region.”

At Pacific Tycoon, we’re located in the heart of Asia, serving the our clients and giving them a managed solution to their investable income. By owning containers and leasing them out to the companies that supply this region with the goods they are demanding. With the turbulence in the financial markets, many investors are looking for safer, more predictable ways to make money. Contact Pacific Tycoon and we’ll show you how you can begin earning 12% on your money.

Image: GoogleMaps

Source: NZHerald, CargoNewsAsia, SunLive, Bloomberg

17
Aug
11

China All Over Top Container Port List

If you want to see where the developed world stands in today’s global economy, then take a look at the Top 20 ports list for 2011. There’s one in the top 10 that doesn’t belong to an Asian country. Rounding out the top 10 is, Rotterdam, the second largest city in the Netherlands and the largest port in Europe. Antwerp, Hamburg, L.A. and Long Beach are the only other non-Asian ports in the top 20.

Hong Kong PortString of Pearls, More and More Attractive

The Chinese Academy of Sciences recent research report says that container throughput in the Asian region is being fueled by strong Economic growth from China, India, and others in the region, including the Middle East.

Huang Anqiang, a senior member of a specialized economics team working for the centre said that China will likely prevail again in the year-end standing of top container ports. His team expects 10 of China’s container ports, including Hong Kong and Kaohsiung, to be in the world top 20 league this year, one more than in 2010.

“The transfer of the world manufacturing centre and slow economic growth in advanced economies will push down their ports down the ranking of top 20 global ports,” Huang said.

Most ports in the top 10 list will not be from advanced economies in 2011. This is in huge difference compared to the year 2000 when nine out of the top 10 were from developed countries, Huang said.

Apart from China, ports in Southeast Asia and the Middle East are picking up speed thanks to faster-growing regional economies and their locations on trunk shipping lines.

Singapore, which was displaced by Shanghai from the top position by a small margin last year, has continued its slow growth since the latter half of 2010. However, its ideal location, free port policy and increasing trade with Southeast Asian nations may shore up its volumes in the rest of 2011. The city state’s container volume for 2011 could exceed 29 million TEUs again but it will fall slightly short of the top mark expected to be achieved by Shanghai.

Malaysia’s Port Klang is turning its attention to container trade related to China and India, two of the world’s strongest growing economies. The strategy has paid off and it expects to report 8.8 to 10.7 percent container throughput growth for 2011. The Port of Tanjung Pelepas has tapped its potential for domestic as well as international trade to maintain a higher growth of at least 13.7 percent, which could place it 17th in the global rankings.

Top 20 container ports in 2011 (forecast)
Ranking, Port, Country

  1.  Shanghai, China
  2.  Singapore, Singapore
  3.  Hong Kong, Hong Kong
  4.  Shenzhen, China
  5.  Busan, China
  6.  Ningbo-Zhoushan, China
  7.  Qingdao, China
  8.  Guangzhou, China
  9.  Dubai, Dubai
  10.  Rotterdam, Netherlands
  11.  Tianjin, China
  12.  Kaohsiung, Taiwan
  13.  Port Klang, Malaysia
  14.  Antwerp, Belgium
  15.  Hamburg, Germany
  16.  Los Angeles, U.S.A.
  17.  Tanjung Pelepas, Malaysia
  18.  Long Beach, U.S.A.
  19.  Xiamen, China
  20.  Dalian, China
For comparison purposes, in the year 2000 Shanghai was number 6, Shenzhen was 11, Ningbo was 65, Qingdao was 24, Tianjin was 32. Shanghai and Shenzhen made respectfully good jumps up the list but Ningbo, Qingdao, and Tianjin come from the stratosphere smashing onto the chart this year. You can see more of the comparisons at RITA (Research and Innovation Technology Administration)

More Reasons

With 9 of the top 10 ports in Asia, you’ve got 9 very good reasons to look into direct investments in the container industry. Pacific Tycoon has the experience, knowledge and expertise to manage containers and pay you very well as you lease them to the very companies that supply the region with material goods needed for the ongoing expansion.

Source: CargoNewsAsia, ChineseAcademyOf Science



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