Trade deficit widens

According to the provisional figures of imports and exports, the balance of trade figures cumulative from July - September 2011 show a deficit of $5,114 million. The reason for this drop lies in change in exports and imports during the period under focus. While the exports during July-September 2010 totalled $6,003 million (provisional) as against $5,058 million during the corresponding period of last year showing an increase of 18.6 percent. The imports increased by a 23.1 percent, moving from $9,029 million during July-September 2010 to $11,117 million (provisional) in July-September 2011. On the exports end, food and petroleum group and coal added to the export bill but the main contributions came from the textile group, which grew in value terms by 10.34 percent (53.2 percent of the total exports in value terms for the three months from July 2011) from July-September 2010 to the same period this year. Under the textile group, raw cotton showed phenomenal quantity and value-term increases of 582 and 688 percent, respectively. However, its contribution to the total textile exports was only 1.7 percent in value terms. The categories that boosted this head include cotton cloth and value-added textile products like knitwear, bed wear and readymade garments. All of them showed increases in value terms due to the improvement in cotton price over the three months from July 2011, compared with the same period of last year, whereas quantity increases were only experienced by readymade garments and knitwear. It stands clear from the import results released by the Federal Bureau of Statistics that the petroleum group is the main reason for the increase in the import bill, followed by food, agriculture and other chemicals group and the machinery. A 99 percent increase in the import of petroleum products in value terms over the months from July to September 2011 compared with the corresponding period of last year, along with an increase in value of petroleum crude by 20.5 percent led to an increase in the petroleum group by 62.4 percent in value terms over the period under focus. A decline in the import quantity of crude oil by 17 percent over July-September 2011 compared with the same period of last year highlights the issue of the under utilisation of the refineries and lower value addition due to the circular debt issue. In the food group, which constitutes 11.3 percent of the grand total of imports for the three months from July 2011, palm oil imports increased by 44.35 percent for the period under question compared with the same months of last year. This increase is a result of the governments downward revision on import duty on palm oil.