World trade will collapse in the second quarter of 2020, with a drop of 26.9%, projected by the United Nations Conference on Trade and Development (UNCTAD), in a report released on Wednesday.

Already in the first quarter this indicator registered a 3% drop at the annual rate.

The estimates are part of a report by the Committee for the Coordination of Statistical Activities (CCSA), released this Wednesday by UNCTAD, in conjunction with 36 international organizations.

The report is the product of cooperation between the international statistical community and national statistical offices and systems worldwide, coordinated by UNCTAD.

«Governments everywhere are under pressure to make post-COVID-19 recovery decisions with lasting consequences,» said UNCTAD secretary-general Mukhisa Kituyi.

According to the report, the fall in world trade is accompanied by a marked decrease in the prices of basic products, which have fallen precipitously since December last year.

The UNCTAD Free Market Commodity Price Index (FMCPI), which measures price movements of primary products exported by developing economies, lost 1.2% of its value in January, 8.5% in February and a huge 20.4% in March.

World trade and commodities

The drop in fuel prices was the main driver of the sharp drop, falling 33.2% in March, while the prices of minerals, metals, food and agricultural raw materials fell by less than 4 percent.

The more than 20% drop in commodity prices in March was a record in FMCPI history. In comparison, during the 2008 global financial crisis, the maximum monthly decline was 18.6 percent.

“At that time, the decline lasted six months. It is worrying that the duration and overall strength of the current downward trend in commodity prices and world trade remain uncertain,” said UNCTAD.

Before the COVID-19 pandemic plummeted international trade, world merchandise trade volumes and values ​​showed modest signs of recovery since late 2019.