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Terms Of Trade
The terms of trade (TOT) represent the ratio between a country's export prices and its import prices. The ratio is calculated by dividing the price of the exports by the price of the imports, usually in percentage terms. An increase in the terms of trade between two periods (or when TOT is greater than 100%) means that the value of exports is increasing relative to the value of imports, and the country can afford more imports for the same value of exports. For example, an increase in the price of oil between two periods (with oil production remaining the same) is likely to increase or improve the terms of trade for Nigeria and vice versa. The TOT is recorded as an index, and can be used as an indicator of an economy's health.
Commodity Price Index January to March, 2020.
1. All commodity group import index (Table 1).
The All commodity group import index fell by 0.84% between January and March, as a result of the declines in the prices of Plastic, rubber and articles thereof (-7.80%), Articles of stone, plaster, cement, asbestos, mica, ceramic (-4.73%) and Footwear, headgear, umbrellas, sunshades, whips (-4.23%). The fall was, however, offset by increase in the prices of Raw hides and skins, leather, furskins etc.; saddler (+6.63%), Prepared foodstuffs; beverages, spirits and vinegar; tobacco (+6.26%) and Pearls, precious and semi-precious stones, precious metals (+ 5.10%).
The month -on-month change in the All Commodity group import index showed that import prices decreased in February (-0.94%) compared to January. This was driven by Plastic rubber and its articles (-12.06%), Paper making material; paper and paperboard, articles (-6.01%) and Articles of stone, plaster, cement, asbestos, mica, ceramic (-4.46%). This was partially offset by increases in prices of textile and textile articles (+2.95%), Base metals and articles (+2.91%) and Pearls precious and semi precious stone(+1.56%).
In March 2020, import prices of All commodity groups increased by 0.10% on average.The overall increase was mainly attributed to the increase in prices of Prepared foodstuffs; beverages, spirits and vinegar; tobacco(+7.34%), Raw hides and skins, leather, furskins etc.; saddlery (+6.36%) and Plastic, rubber and articles thereof (+4.26%). However, this was negatively affected by changes in prices of Footwear, headgear, umbrellas, sunshades, whips etc(-0.81%), Vehicles, aircraft and parts thereof; vessels etc (-1.85%) and Mineral products (-1.16%).
2. All commodity group export index (Table 2)
The All commodity group export price index decreased by 0.59% due to decreases in Boilers, machinery and appliances (-22.25%), Base metals and articles of base metals (-5.14%), Prepared foodstuffs; beverages, spirits and vinegar; tobacco (-3.22%) and Miscellaneous manufactured articles (-3.10%). This was, however, offset by Wood and articles of wood, wood charcoal and articles (+6.69%), Vegetable products (+4.10%) and Live animals; animal products (+3.05%).
In February, the All Commodity Group Export Index decreased by 0.41%. This was due to decreases in Base metals and articles of base metals (-6.87%), Wood and articles of wood, wood charcoal and articles (-6.52%) and Boilers, machinery and appliances; parts thereof (-3.42%). This decline was offset by increased prices of Textiles and textile articles (+3.45%), Vegetable products (+1.49%) and Vehicles, aircraft and parts; vessels etc.(+1.0%).
The monthly change in March of all commodity export index stood at -0.18%.This decrease can be attributed to a significant decrease in Boilers, machinery and appliances; parts thereof (-18.83%), Prepared foodstuffs; beverages, spirits and vinegar; tobacco(-3.90%) and Textiles and textile articles(-2.34%). The decline was offset by increases in the prices of Wood and articles of wood, wood charcoal and articles (+13.21%) and Live animals; animal products (+3.59%).
3. Terms of Trade by commodity (2018 Jan=100) (Table 3)
The All commodity group Terms of Trade stood at 102.93 in January, 103.48 in February and 103.19 in March.
This represents an increase of 0.54% in February when compared with January but a decrease of 0.28% in March against the preceding month. On average, the terms of trade rose by 0.26% during the quarter. This increase is explained by a rise in the prices of Plastic, rubber and articles thereof (8%), Vegetable products (6.86%) and Wood and articles of wood, wood charcoal and articles (6.48%). However, it was offset by decline in the prices for Boilers, machinery and chemical appliances; parts thereof (-21.37%), Prepared foodstuffs; beverages, spirits and vinegar; tobacco (-8.70%) and Base metals and articles of base metals (-7.22%).
4. All Region Group export index (Table 4)
The All region group export index fell by 0.59% between January and March due to declines in the prices of exports to all regions. The month -on-month change showed that the all region export index fell in February by -0.41%, and in March by -0.18%.
In February 2020, the main cause of the decline in the index were lower prices in Europe (-1.03%), America (-0.08%) and Oceania (-0.02%). However, this decline was partially offset by Africa (+0.5%) and Asia (+0.08%).
Between February and March, the monthly change in All Region export index stood at -0.18%. This is explained by the decreases in export prices to Africa (-0.44%), America (-0.39%), Asia (-0.25%) and Europe (-0.01%).
5. All Region Group import index (Table 5)
The All region group import index fell by 0.84% on average, following a decrease of 0.92% in February and an increase of 0.08% in March.
This was due to declines in import prices of goods from Europe (-2.16%), Asia (-1.76%) and Oceania (-0.29%), but offset by increases in import prices from America (+8.08%) and Africa(+0.95%).
In February, the All region group import index fell by 0.92% as a result of declines in import prices from Africa (-3.09%), Asia (-1.37%), Europe (-0.63%) and America (-0.21%). The decline was offset by higher prices in Oceania which rose by 1.05%.
In March, the All region group import index increased marginally by 0.08% largely due to increase in import prices from America (+8.29%) and Africa (+4.04%), while falling prices were recorded in Europe (-1.53%), Oceania (-1.34%) and Asia (-0.39%).
6. Terms of Trade by Regions [2018 Jan=100] (Table 6)
The All Region group terms of trade was recorded at 102.93 in January, rising to 103.46 in February and slightly declining 103.19 in March.
In effect, the terms of trade rose by 0.52% in February against January, but fell by 0.26% in March compared to February. Overall, the All region terms of trade rose by 0.26% due to improved export prices to Asia (+1.61%) and Europe (+1.14%) but was negatively affected by export price declines in America(-7.89%) and Africa (-0.60%).
Merchandise Trade By Top Five Partners And By Major Commodities (Nâ€™million) Q1, 2020
Nigeria's exports to India was valued at N637.53 billion or 15.61% of total exports during the period under review. Export trade was largely dominated by Petroleum oils and oils obtained from bituminous minerals, Crude (N526.87 billion), Natural gas, liquefied (N91.34 billion) and Sesamum seeds whether or not broken (N7.97 billion). On the other hand, the value of imports from India stood at N334.53 billion representing 7.92% of total imports. The largest import commodity from India was motorcycles and cycles, imported CKD by established manufacturers >50cc<=250cc, Kerosene type jet fuel and Vaccines for human medicine valued respectively at N93.97 billion, N24.32 billion and N20.45 billion.
Exports to China in Q1 2020 was valued at N113.06 billion. The largest export commodity to China was Petroleum oils and oils obtained from bituminous minerals, crude valued at N54.19 billion, followed by Natural gas, liquefied and Sesamum seeds, whether or not broken valued at N42.16 billion and N9.31 billion respectively. On the other hand, the value of import trade from China was valued at N1,109.46 billion accounting for 26.28 % of total import. Import trade with China was dominated by fully automatic rifles and carbines with single smooth-bore barrels (valued at N51.97 billion), motorcycles and cycles, imported CKD by established manufacturers >50cc<=250cc (N44.82 billion) and Other machine-tools for working stone, ceramics, concrete, etc (N39.72 billion).
Nigeria's total export to Spain was valued at N402.9 billion in the first quarter of 2020. The dominant export commodity was Petroleum oils and oils obtained from bituminous minerals, crude valued at N360.44 billion, accounting for 89.46% of total export. This was followed by Natural gas, liquefied worth N31.97 billion and Partially Refined Oil including Crude oil having undergone primary refinement, valued at N5.29 billion. Imports from Spain, on the other hand, stood at N39.99 billion. While Mixed alkylbenzenes & mixed alkylanaphthalenes, valued at N11.41 billion ranked first in imports, Gypsum; anhydrite whether or not coloured, with/without small quantities of accelerators and Other agricultural, horticultural, forestry or bee-keeping machinery n.e.s, worth N2.89 billion and N2.61 billion respectively, were imported during the period under review.
Nigeria's export trade with the Netherlands, in Q1 2020, was valued at N396.93 billion. The major export commodities were: Petroleum oils and oils obtained from bituminous minerals, crude valued at N360.70 billion, as well as Good fermented Nigerian cocoa beans, and Superior quality raw cocoa beans, respectively valued at N16.53 billion and N11.22 billion. Conversely, the value of imports stood at N470.11 billion, with the main commodity imported being Motor Spirits ordinary, valued at N303.65 billion. Other products imported were Gas oils (N102.82 billion) and Kerosene type jet fuel (N4.52 billion).
E. South Africa.
In Q1 2020, Nigeria's exports to South Africa was valued at N319.47billion, representing 7.8% of total exports. The major commodities exported during the period were Petroleum oils and oils obtained from bituminous minerals, crude (N318.5 billion), Technically specified natural rubber, in primary forms or in plates (N0.3billion), Sesamum seeds, whether or not broken (N0.3billion), Ginger, neither crushed nor ground (N0.2 billion) and Refined lead, unwrought (N0.1billion). On the import side, imports from South Africa were valued at N40.6 billion or 0.96% of total imports during the period under review. The main commodities imported were Polypropylene, in primary forms (N9.02 billion), Apples, fresh (N2.66billion), Chassis fitted with engines for assembly plants (N2.14billion), Other ships' derricks; cranes, including cable cranes; mobile lifting frames (N1.54billion) and Others imported by MV assemblers and manufacturers (N1.33 billion).
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