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Estonia Shipping Report Q3 2011
Business Monitor International, June 2011, Pages: 81
Business Monitor International's Estonia Shipping Report provides industry professionals and strategists, corporate analysts, shipping associations, government departments and regulatory bodies with independent forecasts and competitive intelligence on Estonia's shipping industry.
Market Overview:
The outlook for the Estonian ports and shipping sector in 2011 is positive. The Port of Tallinn remains one of the key facilities in the Baltic, and a combination of ongoing GDP recovery together with dynamic trade with Estonia's Scandinavian and Baltic neighbours should maintain freight transport demand on a reasonable growth curve. This report believes that Estonia is now well past the trough of the sharp recession it experienced in 2009, with sustainable growth led by foreign trade, domestic demand and investment, in that order. The governing coalition did well in parliamentary elections in March, increasing its majority and reducing policy risks. The report expects Prime Minister Andrus Ansip to press on with his mix of policy reforms, tax cuts, and tighter fiscal policy.
Headline Industry Data:
- Port of Tallinn gross tonnage set to rise by a strong 14.9% to 42.108mn tonnes in 2011, following a 16.0% increase in 2010
- Box traffic at Tallinn to grow at a slower pace, +5.6% to 160,402 TEUs in 2011, down from 16.0% the year before
- Estonian foreign trade to gain 14.8% in real terms this year, after 21.4% growth in 2010. Export growth will lead with 15.5% expansion, ahead of imports up by 14.0%.
Key Industry Trends:
Port of Tallinn Has Good First Quarter - Official statistics show cargo tonnage rose by 8.6% to 9.2mn tonnes during the first quarter of 2011. The number suggests the port is benefiting from strong foreign trade performance, despite fears over the potential loss of liquid bulk business to Russia's new Port of Ust-Luga. The port operator also announced EUR13.10mn (US$18.85mn) in consolidated net profit in the first quarter of 2011, up by EUR2.6mn or 25%, year-on-year.
Presidents Promote Kazakh Transit Through Estonian Ports - The Estonian and Kazakh presidents met in April and discussed using Estonian deep sea ports as transit hubs for land-locked Kazakhstan's trade in oil, metals and other goods. Estonian President Toomas Hendrik Ilves said 'Estonian ports could provide Kazakhstan with access to the ocean and world trade'.
Rail Garant Could Face Legal Challenge at Muuga - Russia's Rail Garant won the contract to operate Muuga Terminal at the Port of Tallinn, but Transiidikeskus, an Estonian terminal operator, said it was considering mounting a legal challenge as it believed the contract had been improperly awarded.
Key Risks to Outlook:
The report believes the main risk to the ports and shipping forecasts concerns the volatility of transit trade - an important if somewhat unpredictable component of overall freight demand. This is on the whole a downside risk, given the possibility that more-than-expected Russian liquid bulk cargo will be re-routed through the new Russian Port of Ust-Luga. Ust-Luga's role will become more apparent in the second half of 2011, as it comes into full operation. There is, however, some potential upside risk from the development of transit opportunities involving Kazakhstan and China.
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