Tuesday, September 21, 2021 09:50 PM / by
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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 April to June, 2021
All commodity group import index (Table 1).
The All -commodity group import index increased by 1.07% between April and June, 2021. This was driven mainly by an increase in the prices of products of the chemical and Allied industries (1.40%), wood and articles of wood, wood charcoal and articles (1.37%) Paper making material; Paper and paperboard articles (1.23%)
Between April and May, 2021 the All- Commodity group import price index grew marginally by 0.12% due to marginal increases in the index of products of the chemical and Allied industries (0.78%), wood and Articles of wood, wood charcoal and articles (0.72%), Paper making material; Paper and paperboard (0.44%). This was offset by decreases in the prices of Live animals; animal products ( -0.17%), Animal and Vegetable fats and oils and Cleavage (-0.23%) and Mineral products (-0.27%).
Between May and June, 2021, the all commodity group import index grew by 0.95%.This was driven by Mineral products (1.15%), Animal and Vegetable fats and oils and other cleavage products (1.13%) and Live animals ; animal products (1.10%) and others.
All Commodity Group Export Index (Table 2)
The All-commodity group export index increased by 0.72% between April and June 2021. This
Was driven mainly by an increase in the prices of Product of the chemical and Allied industries (2.54%), Plastic rubber and articles (0.85%) and Mineral products (0.74%). However, the index was negatively affected by Live animals, animal products (-2.61%), Vehicles, Aircraft and parts (-0.24%) and Wood and articles of wood, wood charcoal and articles (-0.23%).
The All commodity group export index grew by 0.48% between April and May, 2021. This was due to marginal increases in prices of product of the Chemical and Allied industries (1.99%), Animal and vegetable fats and oils (1.39% ),Plastic rubber and articles thereof(0.75%)etc. This was negatively affected by Live animals and animal products (-0.66%), wood and articles of wood, Wood charcoal and articles (-0.29%) and prepared foodstuffs, beverages, spirits and vinegar, Tobacco (-0.23%).
Between May and June, 2021 . the All commodity group export decreased by 0.23%.This was driven by products of the chemical and allied industries (0.56%), Mineral products(0.24%), Vegetable products (0.18%).However, the index was offset by Live animals; animal products (-1.95%), Animal and vegetable fats and oil (-1.24%) and Vehicles, aircraft and parts thereof, Vessels etc (-0.08%).etc
Terms of Trade by Commodity (2018 Jan=100) (Table 3)
The All- commodity terms of Trade for April, May and June, 2021 stood at 101.40, 101.77 and 101.05
The All-commodity group terms of trade grew by 0.37% in May but fell by 0.71% in June and on average decreased by 0.35% between April and June 2021. The decline in terms of trade between April and June was driven by decreases in the prices of Live animals, animal products(-3.5%), wood and articles of wood, wood charcoal and articles (-1.59%),Vehicles, aircraft and parts(-1.45%). The decline was, however mitigated by increase in the price of products of the chemical and allied industries (1.14%).
All Region Group export index (Table 4)
All-region export index increased by 0.72% between April and June 2021 due to increases in export prices to All-regions except Africa. During the period under review, America recorded 3.46%, Europe 0.56%, Oceania 0.27% and Asia 0.18.The month -on-month changes show an increase of 0.48% in May and 0.23% in June .
The monthly percentage change of 0.48 between April and May 2021 was due to marginal increases in the prices of exports to America (2.93%), Europe (0.38%) and Oceania (0.06%).This was negatively affected by Asia (-0.05%) and Africa (-0.40%).
The monthly changes between May and June 2021 stood at 0.23%.This was as a result of marginal increases in export prices to All regions; America (0.53%), Asia (0.23%),Oceania (0.21%),Europe (0.18%) and Africa (0.11%).
All Region Group import index (Table 5)
The All-region group import index increased by 1.07% between April and June 2021 due to increases in import prices across All-regions; Oceania (1.40%, America 1.36% , Africa 1.22%, Asia 1.11% and Europe 0.96% respectively. The monthly percentage change showed an increase of 0.12% in May and 0.95% in June.
Between April and May 2021,the All-region import index increased by 0.12% due to marginal increases in the import prices from Africa (0.42%), America(0.70%), Asia (0.20%) and Oceania (0.78%), with the exception of Europe which recorded a decline of 0.10% .
Between May and June, 2021 the All region import index recorded a slight increase of 0.95%.The was driven by Europe (1.06%) , Asia (0.91%), Africa(0.80%),America (0.66%) and Oceania (0.62%).
Terms of Trade by Country Regions [2018 Jan=100] (Table 6)
The All Region group terms of trade stood at 101.40 in April, 101.77 in May and 101.05 in June.
The terms of trade by region rose by 0.37% in May but decreased 0.71% in June. The All-region terms of trade on average declined by 0.35% due to unfavorable terms of trade across all regions with the exception of America which recorded an increase of 2.09%
Merchandise Trade By Top Five Partners And By Major Commodities (Nâ€™million) Q2, 2021
The total export to India in the period was valued at N949.05 billion or 18.7% of total export. The largest export commodity to India was "Petroleum oils and oils obtained from bituminous minerals, crude" valued at (N899.7 billion). This was followed by "Natural gas liquefied"., Cashew nuts in shell, "oil-cake and other solid residues resulting from the extraction of soya and Ginger valued at N35billion, N3.2billion, N1.7 billion, and N1 billion respectively. The import trade from India was valued at N570billion, accounting for 8.2% of total import. Import trade during the period was dominated by imported motorcycles and cycles (N61.80 billion), this was followed by Vehicles with petrol fuel engine of cylindercapacity=<1000(N36.84billion),Gasoil(N30.95billion),otherantibiotics N17.05billion) and others.
The total export trade to Spain was stood at 524.5billion or 10.3% of total export. The dominant export product was Petroleum oils and oils obtained from bituminous minerals, crude valued at N463.83billion.This was followed by Natural liquefied gas worth N32.46billion and Vessels and other floating structures for breaking up valued at N18.34billion and Leather further prepared after tanning/crushing valued at N5.8billion respectively. However, the value of imports from Spain during the quarter stood at N93.2billion or 1.34%.However, Mixed alkylbenzenes&mixed alkylanaphthalenes, valued at N27.69billion, followed by Petroleum Bitumen (N13.06 billion) "Gypsum; anhydrite "worth N7.78billion and mixtures of Odoriferous substances worth N3.40billion were imported during the period.
In Q1 2021, Nigeria export trade with Canada was valued at N355.60billion accounting for 7% of total export. Major commodities exported during the period were Petroleum oils and oils obtained from bituminous minerals, crude (N350.99billion),Good fermented Cocoa beans (N3.96 billion),Sesamum seeds (N0.41billion) and other Cashew nuts,shelled (N0.11billion). On the import side, import value amounted to N91.3billion. The main commodities imported were Durum wheat(not in seeds) worth N68.63billion,Used Vehicle (N3.72billion),Other gas turbines (N2.83billion) and Meslin (not in seeds)worth N2.14billion respectively.
Export to Netherlands was valued at N298.29billion or 5.9% of total exports in the period. This was largely dominated by exports of Petroleum oils and oils obtained from bituminous minerals, crude (N266.65billion), Good fermented Cocoa beans (N16.48 billion),Natural Gas liquefied (N5.64billion) and other frozen shrimps and prawns(N1.76billion). On the other hand, the value of imports from Netherlands stood at N567.1billion representing 8.0% of total imports. The largest import commodity from Netherlands was "Motor spirits (285.98 billion),Gas oil (N96.04billion),Lubricating oils to be mixed (N14.60billion), Blue whitings (N13.41) and others.
Export to China was valued at N186.56billion or 3.7% of total export in the period. This was largely dominated by exports of Natural Gas liquefied (N61.50billion), Petroleum oils and oils obtained from bituminous minerals, crude (N55.80billion),Other petroleum gases(N21.81billion),Other Liquefied petroleum gases N9.05billioand Sesamum seeds (N7.14billion. On the other hand, the value of imports from China stood at N2078.6billion representing 29.9% of total imports. The largest import commodity from China was "Machines 4 the reception,conversion & transmission (N118.69 billion),Other Herbicides (N81.17billion),Poly ethylene terephthalate (N45.81billion) ,Motorcycles (N32.72)and others
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