BMI View: The l atest data for January-July 2015 has led BMI to revise down its throughput forecasts for Latvia's largest port, the port of Riga . Total tonnage remains in growth, just, with a projected y-o-y increase of 1% forecast. Containers , however , are in decline, with BMI predicting a decrease y-o-y of 4.2%. We are holding with our 2016 forecast for both total tonnage and container throughput, with growth for both projected, we do however , highlight the risk to the port's total tonnage outlook, with Russia stating it will suspend its dry bulk transit shipment through the port.
Headline Industry Data
2015 port of Riga tonnage throughput forecast to grow 1.1%, over the medium term we project a yearly average 1.5% increase.
2015 port of Riga container throughput forecast to decline by 4.2%, over the medium term we project a y-o-y increase of just 0.5%.
2015 total trade growth forecast at 1.5%.
Key Industry Trends
Fighting for Transits and Investment: Latvia is continuing its attempts to attract additional foreign investment and freight transits into its port sector, trends which were underlined during the spring by a delegation of investors from India visiting the port of Riga, as well as the Belarusian Oil Company (BOC), which signed an agreement of intent aiming to organise the transhipment of Belarusian oil products via the port. In addition, Latvia's transport minister has reiterated that the country is open to Chinese investment into its transport sector, including port infrastructure.
Risks to Outlook
Russia has announced that it will suspend its coal and iron ore transit shipments through Latvia. Russian Railways (RZD) has said the suspension is due to maintenance work. However, Russia has previously stated that it wants to decrease its use of neighbouring ports in favour of utilising its own facilities. It has already done this with its liquid bulk transits, a strategy that has negatively impacted the throughput at some Baltic States' ports. The port of Riga did not play a major role in Russia's liquid bulk supply chain and so was somewhat protected, but if Russia does move its dry bulk transits away from the port for an extended time, Riga's will be negatively hit, with dry bulk accounting for over 50% of the port's total operations.