Page 1 Trade Demand Forecast Q Prepared by: Group Research & Development (GRD) September 2006

Page : Global Trade Index 1.0 : Transpacific Trade 2.0 : Asia Europe Trade 3.0 : Transatlantic Trade 4.0 : Latin America-North America Trade 5.0 : Intra Asia Trade Table of Contents

Page :Global Trade Index

Page 4 Global Trade Index  In line with the world economic growth, global trade growth is expected to be broadly unchanged at 10.3% in 2006, and moderate going into 2007.

Page : TRANSPACIFIC TRADE ROUTE

Page 6 TPEB  TPEB trade accelerated to 17.5% in Q2 in spite of surging energy prices and continued dollar depreciation.  Northeast Asia accounted for most of the gain, with China accounting for more than half of this increase.  Direct investment into the countries in the region, particularly into China, continued to boost the growth.  However, the US housing market has distinctly cooled, downdrafts in the housing market could impact on consumer demand going forward.

Page 7 TPWB  TPWB trade remained on a moderate growth path in the 1 st half of the momentum of growth is likely to continue into 2007, supported by the continued needs to import raw materials, machinery and agricultural products to meet industrial needs

Page : ASIA EUROPE TRADE

Page 9 ASEU (North, Eastern & Central Europe) -  in line with the ongoing European recovery, ASEU trade expanded 14.2% in 2Q 06.  Going forward, continued improvement in the labour market, a stabilization of real wages (after earlier falls) and an improvement in confidence will boost consumer, especially in Germany, providing support to imports from Far East.  Nonetheless, the growth may moderate in 2007, on the back of the planned increase of the VAT in Germany at the start of  The rise of the middle class in Eastern European economies will provide some stimulus for imports of consumer goods from the Far East going forward.

Page 10 ASEU (Med)  Demand from Med Europe remained strong, propelled by strong double digit growth of France Med and emerging economies of Turkey and Ukraine while the 2 largest importers Italy and Spain Med grew only modestly.  In particular, Turkey is increasingly an important driving force of imports from Asia. GDP growth has been strong in Turkey since the 2001 crisis, fuelled by falling interest rates, strong consumer credit growth and investor confidence. In addition, improvements in productivity and lower unit labour costs have helped to bolster several of Turkey's export-oriented manufacturing sectors, hence also indirectly creating the demand for imported manufacturing inputs.

Page 11 ASEU (Combined North and Med Europe)

Page 12 EUAS (North, Central & Eastern Europe)  Asian containerized imports from North, Central and Eastern Europe grew in 2Q06 at a slower rate of 5.7% compared to 1Q.  Going forward, Asian imports are expected to remain steady supported by Asia’s continued industrial needs and infrastructure development needs as the economies are expected to remain healthy.

Page 13 EUAS (Med)  2Q06 saw a continued increase in EUAS (Med) trade. We expect a modest trade growth going forward in line with a moderate outlook on the Asian economies.

Page 14 EUAS (Combined North and Med Europe)

Page : TRANSATLANTIC TRADE

Page 16 TAWB (North Europe)  TAWB (North Europe) trade slowed in 2Q06. Over the medium term, we expect a moderate growth in line with the housing market slowdown.

Page 17 TAWB (Med)  Mediterranean exports rebounded to a healthy growth rate of 7.9% in 2Q06 after shrinking in 1Q06, where it was pulled down by Italy, its largest exporter.  Going forward, we expect growth to moderate to 3.8% in 2007, in line with overall US economic performance.

Page 18 TAEB (North Europe)  Growth of North Europe’s imports from US fell to a mere 1.2% in 2Q this year. We remain conservative about the near term outlook and believe that growth will pickup more strongly over the course of next year when the European recovery is fully entrenched.

Page 19 TAEB (Med)  Med Europe’s imports from across the Atlantic rebounded to a decent 5.1% after plunging by 10% at the beginning of this year.  The sustained recovery in France and other European countries like Turkey will help to support import demand for goods from America.  We expect a modest growth of 1.7% this year, due to a weak start in the year. Growth will inch up higher to 2.8% next year.

Page : LATIN AMERICA-NORTH AMERICA TRADE

Page 21 LTAM - done  LTNB posted a marginal growth of 0.5% in 2Q06 compared with negligible growth of 0.1% in 1Q. Given the expected slowing in US economic activity, we do not expect any significant improvement in trade performance going forward and forecast growth to be -0.7% for this year on average before picking up to 2.2% next year.  LTSB growth slowed to 1.3% in 2Q06 from 2% in 1Q. Economic growth in Latin America is expected to be modestly healthy. Economies in the region will continue to be among the leading beneficiaries of strong Asian demand for non-oil commodities. They have been bolstered by strong demand from the US earlier in the year and high prices for soft commodities.  However, structural weaknesses will continue to depress Latin American performance, especially in comparison with other emerging regions. Although the share of gross fixed investment in GDP has risen in Latin America, it remains low, and this will continue to depress the region's long-term growth potential. We expect growth of 0.4% this year before picking up slightly to 1.2% next year.

Page : INTRA ASIA TRADE

Page 23 INTRA-ASIA Source: Far East/Mid East are based on Conf Stats, Intra Far East and Far East/Indian Subcon based on Global Insight  The Far East and Middle Eastern trade is expected to see a moderation of its trade more sustainable levels. The moderation in Asian economies will also see a moderation of imports of semi-intermediates such as petrochemicals from Middle East.  Sustained oil prices should keep oil rich Middle East economies importing finished products from Far East.  Intra Asia trade is expected to grow at robust rates of 9.3% this year and 9.1% in 2007 driven largely by final demand in China. Moreover, the Asian economies have undertaken disruptive economic restructuring to move up the value chain to better complement the Chinese economy rather than compete with it. This should enhance the Intra regional trade. The factor that could undermine the robust trade is sustained high oil prices and drastic slowdown in the Chinese economy.  We expect the trade between Indian Subcon and Far East to moderate to more sustainable levels for 2006 and Growth will continue to be propelled by strong economic growth in these two regions. The agricultural sector of Indian Subcon should do well and would support private consumption.