Imports lose steam; exports fall by 10%

The country’s external trade saw mixed performance in March, with exports suffering the biggest fall of late by 10% and imports losing steam, whilst the difference has further inflated the deficit in the first quarter of last year.

Imports in March grew by a mere 4% to $ 1.69 billion and the Central Bank was quick to attribute it to policy measures taken in January and February. Whilst the loss of steam may be welcome in terms of stemming the erosion of reserves, the 10.2% dip in exports to $ 836 million is likely to raise fresh concerns.

In January exports dipped by 0.6% to $ 918 million, whilst in February it picked up year-on-year (yoy) by 7.6% to $ 879 million. However March 2012, apart from showing a 10% dip yoy, also reflected a further slide month-on-month. Cumulative exports in the first quarter were down by 1.4% to $ 2.63 billion.

In the first quarter, imports grew by 17% to $ 5.19 billion and the Central Bank made it a point to put it in context in comparison to the faster growth of 39.2% (to $ 4.45 billion) in the first quarter of last year.

However, what the Central Bank failed to equally emphasise is that in the first quarter of 2011, exports surged by 54% to $ 2.7 billion.

The trade deficit for the month of March 2012 stood at $ 861 million, up by 22.5% over a year earlier whilst first quarter deficit was $ 2.5 billion, up by 45%. In the first quarter of last year the deficit grew by 22% to $ 1.7 billion over 2010.

Detailing imports in March, the Central Bank said the growth was primarily driven by the imports of investment goods; particularly transport equipment and building materials.



Imports of intermediate goods declined by 0.5% mainly due to lower expenditure on imports of textiles owing to the substantially lower cotton prices compared to 2011.

The expenditure on petroleum imports increased in March 2012, reflecting an increase in the average crude oil import price to $ 125.39 per barrel from $ 111.31 per barrel in March 2011. Expenditure on imports of refined petroleum products also increased by around 18% as a result of higher prices.

However, expenditure on consumer goods imports declined by 4.7% in March 2012, reflecting a decline in expenditure on food imports. Nevertheless, expenditure on imports of dairy products, fruits and beverages increased in March 2012.

With respect to imports of non-food consumer goods, personal motor vehicles declined by 1.2% in March 2012 to $ 81 million, while the expenditure on medical and pharmaceuticals and clothing and accessories grew by 22.3% and 44.5%, respectively.

In the exports arena, earnings from industrial exports declined in March 2012 led by lower earnings from exports of textiles and garments and petroleum products. Although textiles and garments continued to be the largest export earner, generating $ 319 million in March 2012, earnings declined by 11.7%.

Earnings from petroleum exports also declined due to the lower bunkering oil exports amidst the higher prices that prevailed in March 2012. However, the higher earnings from exports of rubber products, gems and jewellery and base metals helped cushion the overall decline in export earnings in March 2012.

Agricultural exports declined by 10.1% to $ 203 million, reflecting declines in all sub categories while earnings from seafood exports increased in March 2012. Despite higher export volumes, earnings from exports of tea and rubber declined due to dampened prices compared to March 2011.

Earnings from minor agricultural exports and spices also declined in March 2012 mainly due to the lower export quantities. Seafood exports grew by 13% in March 2012, reflecting higher earnings from fresh fish, processed fish and crustaceans.

In cumulative terms, there has been a marginal decline in export earnings in the first quarter of 2012, reflecting a 3% decline in earnings from textiles and garments exports to $ 1,028 million, while earnings from tea exports declined by 12.3% to $ 332 million.