GCC exports to Japan slump by 55% in H1

A sharp decline in oil prices along with lower crude supplies pulled down exports by the UAE and five other Gulf countries to Japan by nearly 55 per cent in the first half of 2009, according to official Japanese data.

The decline reversed several years of rapid growth in their exports to the largest importer of Gulf oil and sharply narrowed a trade surplus enjoyed by the six-nation Gulf Cooperation Council (GCC) with Japan for a long time.

Japan's exports to the six members also plunged by about 42 per cent because of the recovery of the US dollar, lower demand in the region, a fall in global prices and a steady growth in trade between the GCC and China.

From about $71.47 billion (Dh262.69bn) in the first six months of 2008, export of goods by GCC to the Asian industrial giant plummetted to nearly $32.06bn in the first half of this year, showed the figures released by the Japan External Trade Organisation (Jetro).

The UAE recorded the largest decline in its exports to Japan as they tumbled by more than 60 per cent. But the Emirates maintained its position as the largest Gulf market for Japanese products despite a plunge in its imports this year.

Saudi Arabia's exports to Japan slumped by about 57 per cent while those by Kuwait tumbled by about 50 per cent. Bahrain's exports fell by 44 per cent and that of Qatar and Oman 45 per cent and 51 pert cent respectively.

The decline slashed the GCC's trade surplus with the group's main economic partner to about $24.2bn from $59bn in the same period last year.

Experts said the fall in the region's exports to Japan was a result of a steep decline in Gulf crude output and oil prices, which collapsed by more than $100 in the last quarter of 2008 months after soaring to an all-time of $147 in late July. Prices averaged $50 in the first half of 2009 compared with over $100 in the first half of 2008 while the GCC's oil supplies dipped by nearly two million barrels per day in line with a collective Opec agreement.

GCC's oil supplies to Japan are also believed to have slumped during the first half of 2009 because of slackening demand in industrial nations following the start of the global financial turbulence in mid-September last year.

Strong crude prices combined with high output boosted the GCC's exports to Japan to a record high of $144.1bn in 2008 from $98.5bn in 2007, an increase of about 47 per cent, according to Jetro.

Massive crude supplies have kept the GCC-Japan trade balance largely in favour of the Gulf group, with the surplus peaking at $117 billion in 2008.

Japan gets more than 80 per cent of its oil needs from the GCC, Iran, Iraq and other Middle Eastern crude producers. Saudi Arabia and the UAE alone supply it with more than two million bpd, nearly half its total oil imports.

Besides crude, the GCC's exports to Japan include aluminium, natural gas, LNG and petroleum products. 

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