Asian imports are down: Who will buy the excess production?

HONG KONG - Asia started the week to sobering data: Japan imports are down in Yen terms, -23.3% YoY. “Although some of this was due to the earthquake disruption, it begs the question of who is actually buying globally, as data from the rest of the region are not pretty,” says French investment bank Natixis.

Stripping out energy imports to see if the decline is due to demand factors or energy related savings (most Asian countries, with the exception of Malaysia, are net energy importers), and looking at US and EU imports to see if their value rises to make up for the slack in Asia (and also taking out energy-related imports to see whether their imports from Asia are rising) Nataxis says Asian demand for external goods is down across the board, except for Vietnam and the Philippines.

“This is not just a reflection of savings from lower energy costs but also illustrative of lacklustre regional and global demand for goods,” Nataxis says.

“While a recovery in the US is boosting demand for Asian goods, the increase is marginal, and in some cases shows decline in recent months (e.g. imports from China).

“A more competitive EUR is having an overall dampening impact on demand for Asian goods, adding another blow. Thus, the decline of Asian imports is not just a sign of energy savings but a harbinger of lacklustre global demand.”   https://www.research.natixis.com (ATI).