News

26 Jun 2008

Global container trade would have risen by 62 per cent world wide if the oil prices were moderate. June 25, 2008: The haulage industry in the country is sending an alert that oil prices are literally grounding it and is seeking alternatives. According to earlier projections, various seaborne trade sub sectors would have grown by not less than 10 per cent in container trade, which is the core trade of the port of Mombasa. Experts had estimated that global container trade would have risen by 62 per cent worldwide if the oil prices were moderate. The same trade was expected to grow by 52 per cent.
The five-year estimations which were done in 2006 had assumed that the price of oil in the international markets would only shoot up to $58 per a barrel.
At the time statistics showed that shipping demands around the world were increasing drastically with the number of vessels significantly increasing by an average of 30 per cent annually.
Tankers, Bulk Carriers, Container Carriers and Multi-purpose Carriers had also doubled since 1998 from over 10,000GT to 20,000 vessels in 2006, and the trends were expected to be maintained.
Vessel value for new building and second hand had taken upward trends, as anticipation in cargo capacity was to continue doing marvellously, as it was doing in 2006.
The figures by experts reveal that the number of vessels was expected to increase by as much as 40 per cent over the next five years.
In 14 years (1998-2012), the world fleet was expected to increase by over 65 per cent, (2006 –760 million GT to 2012 –1 billion GT.)
Shipping trade players also projected that seaborne trade on oil products would have increased by 21 per cent if the price of the oil remained at an average price of $49 per barrel, and 16 per cent if the oil price hit $ 58 per barrel.
Under the same circumstances, crude oil would have increased by 20 per cent and 15.5 per cent. LNG, at moderating oil prices was estimated to hit a 40 per cent mark increase and 29 per cent if the price of oil were on a higher side, while LPG was to increase by 18 per cent and 12.5 per cent respectively.
“The projections are completely unattainable. The international oil prices as you know have tripled from where we had projected, that is $58 per barrel.
The seaborne trade defiantly is bound to shy back,” says former Nedlloyd captain Musa Ittiso.
Industry players in the country, which plays a critical role in sea-to-land trade in the country have a keen eye on the trends of oil price and they say that the decrease should be reflected as the pump levels.
The industry says that like any other industry, it was looking for an option to the problem and that one of the proposals was to seek for permission to be importing the commodity for its members.
The Kenya Transport Association (KTA) chairman, Ahmed Mwinyi Shimbwa, says that members have agreed that the officials follow up the proposal with the Energy minister Kiraitu Murungi if the oil price keeps on increasing.
Mr Mwinyi says that any oil price stabilisation at the international market should be reflected at the pump prices, adding that the Government should intervene to see to it that oil companies comply.
He said that KTA had the muscle to import its oil for its members if given a chance to do so adding that the transport industry was one of the pillars of the region’s economy and it should not be allowed to get to its knees.