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June 2018 Trade Deficit Came in Below Last Recorded

International trade is de­fined as the exchange of goods, services and capital between trading partner coun­tries and regions. It measures change in the stock of material resources in Fiji resulting
22 Sep 2018 11:00
June 2018 Trade Deficit Came in Below Last Recorded
Shoran Devi

International trade is de­fined as the exchange of goods, services and capital between trading partner coun­tries and regions.

It measures change in the stock of material resources in Fiji resulting from the movement of merchan­dise into or out of the country.

Information on imports and ex­ports are inputs to calculating this data and are used particularly in the calculation of Balance of Pay­ments and Gross Domestic Product for the country.

 

Imports are foreign goods and ser­vices bought by a country whereas Exports are the goods and services produced in one country and sold to another country.

When a country’s import exceeds it exports, the country is said to have a trade deficit, while a trade surplus occurs when the value of a country’s exports exceed that of its imports.

Latest provisional data released by the Fiji Bureau of Statistics showed that June 2018 trade deficit amounted to $191.4 million.

This was a notable reduction from the $325.2 m recorded a month ear­lier (May).

This out-turn was due to an in­crease in exports and a reduction in imports.

The total value of goods imported in June 2018 at $386.5 m while the value of total exports was $195.1 m.

Compared to June 2017, total im­ports and total exports increased by $9.4 million (2.5 per cent) and $18.0 million (10.2 per cent) respec­tively.

Imports

Compared to June 2017, the im­port categories recording notable increases were:

  • Machinery and mechanical an­delectrical appliances and parts thereof – up $17.1 million (26.6 per cent) to $81.6 million due to in­creased imports of telephones for cellular networks or for other wire­less networks;
  • Vehicles, aircraft and associated transport equipment – up $11.2 mil­lion (38.0 per cent) to $40.9 million due to increased imports of other vessels for the transport of goods and other vessels for the transport of both persons and goods;
  • Mineral products – up $9.5 mil­lion (14.7 per cent) to $73.8 million due to increased imports of avia­tion turbine fuel and residual fuel oil;
  • Prepared foodstuffs, beverages, spirits and tobacco – up $5.8 million (32.5 per cent) to 23.7 million due to increased imports of other prepa­rations of a kind used in animal feeding; and
  • Base metals and articles thereof – up $5.4 million (25.7 per cent) to $26.3 million due to increased im­ports of other semi-finished prod­ucts of iron-alloy steel.

However, the import categories recording notable decreases were:

  • Wood pulp, paper and paper­board, and articles thereof – down $14.3 million (59.6 per cent) to $9.7 million due to decreased imports of kraftliner; and
  • Live animals: animal products – down $12.0 million (34.6 per cent) to $22.8 million due to decreased imports of albacore or long finned tuna.

For the month of June 2018, Fiji’s major sources of imports were:

Singapore, up $19.6 million (33.4 per cent) to $78.2 million due to in­creased imports of residual fuel oil and aviation turbine fuel;

Australia, up $3.5 million (4.8 per cent) to $76.8 million due to in­creased imports of other prepara­tions of a kind used in animal feed and containers for compressed or liquefied gas;

New Zealand, down $0.3 million (0.4 per cent) to $68.7 million due to decreased imports of milk and in­struments and apparatus for meas­uring or checking the flow or level of liquids and gases;

People’s Republic of China, down $10.3 million (15.0 per cent) to $58.2 million due to decreased imports of albacore or long-finned tuna; and

Malaysia, up $9.0 million (141.1 per cent) to $15.4 million due to increased imports of other vessels for the transport of goods and oth­er vessels for the transport of both persons and goods.

Domestic Exports

Compared to June 2017, the do­mestic export category recording a notable increase was:

  • Wood, cork and articles thereof and plaiting material – up $8.2 mil­lion (589.2 per cent) to $9.6 million due to increased domestic exports of wood in chips or particles.

Domestic export category record­ing a notable decrease was:

  • Pearls, precious, semi-precious stones and metals – down $6.3 mil­lion (42.6 per cent) to $8.5 million due to decreased domestic exports of gold.

For the month of June 2018, Fiji’s major domestic export destina­tions were:

United States of America, down $3.2 million (10.7 per cent) to $27.1 million due to decreased exports of mineral water;

Australia, down $6.1 million (25.4 per cent) to $18.0 million due to de­creased exports of gold;

Japan, up $7.7 million (848.4 per cent) to $8.6 million due to in­creased exports of wood in chips or particles;

Vanuatu, up $1.3 million (24.9 per cent) to $6.5 million due to in­creased exports of corned meat; and

New Zealand, down $0.4 million (7.7 per cent) to $4.3 million due to decreased exports of corned meat.

Re-Exports

Compared to June 2017, the re-ex­port categories recording notable increases were:

  • Mineral products – up $21.5 mil­lion (72.6 per cent) to $51.0 million due to increased re-exports of gas oil (diesel) and aviation turbine fuel; and
  • Machinery and mechanical and electrical appliances and parts thereof – up $6.1 million (45.4 per cent) to $19.6 million due to in­creased re-exports of television cameras, digital cameras and video camera recorders.

The re-export category record­ing notable decreases compared to June 2017 were:

  • Live animals: animal products – down $12.5 million (62.3 per cent) to $7.5 million due to decreased re-exports of frozen tunas; and
  • Pearls, precious, semi-precious stones and metals – down $8.7 mil­lion (96.7 per cent) to $0.3 million due to decreased re-exports of oth­er articles of jewellery and parts thereof.

For the month June 2018, Fiji’s major re-export destinations were:

Tonga, up $2.5 million (31.5 per cent) to $10.5 million due to in­creased re-exports of aviation tur­bine fuel;

Australia, down $5.4 million (37.2 per cent) to $9.2 million due to de­creased re-exports of other articles of jewellery and parts thereof;

United States of America, up $4.9 million (183.0 per cent) to $7.5 mil­lion due to increased re-exports of television cameras, digital camer­as and video camera recorders;

China – People’s Republic, down $0.6 million (9.6 per cent) to $5.6 million due to decreased re-exports of frozen tuna; and

New Zealand, up $0.01 million (0.1 per cent) to $4.9 million due to in­creased re-exports of containers for compressed or liquefied gas, of iron or steel.

International trade is crucial to our modern, commercial world, as producers in various countries try to extend the sales potential of their products in the international markets, reduce dependence on ex­isting markets and hence increase sales and profits.

There are many reasons for cross border trading including lower production costs in one region ver­sus another, specialised industries, lack or surplus of natural resourc­es and consumer tastes.

Different countries have different capabilities and they specialise in producing different goods and ser­vices.

To compensate for what they can­not produce, they engage in trade with other countries.

It allows domestic markets to ex­tend a country’s output beyond na­tional frontiers.

The rise in the international trade is essential for the growth of globalisation. It also brings about closer ties between nations and is particularly beneficial to small and emerging countries.

Feedback: maraia.vula@fijisun.com.fj

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