UAE exports to Japan jump 60% in 10 months

Strong oil prices allied with costlier commodity to boost the UAE's exports to Japan by nearly 60 per cent in the first 10 months of 2008 to maintain its position as the second-largest Arab trade partner of the Asian giant.

Official figures showed the Gulf country's exports to Japan, mostly crude oil, liquefied natural gas and aluminium, surged to an all-time high of $32.85 billion (Dh120bn) during January-October from around $26.17bn in the same period of 2007.

Its imports from Japan also swelled by 43 per cent to nearly $8.91bn from around $6.24bn in the same period. The figures by the Japan External Trade Organisation (Jetro) showed the increase in exports allowed the UAE to sharply boost its trading balance surplus with Japan to $32.85bn from $19.93bn.

The increase, the biggest in such a period since the UAE began exporting oil to Japan 40 years ago, enabled the UAE to maintain its status as the second-largest Arab exporter to Japan after Saudi Arabia and the top regional market for Japanese products, mainly cars, electronics, machinery and equipment, watches, electrical appliances, and other industrial items.

The report showed the total exports by the UAE and its five partners in the Gulf Co-operation Council to Japan nearly doubled to around $151.02bn in the first 10 months of 2008 from $77.12bn in the same period of last year.

Japan's imports from the 27-year-old Gulf alliance also surged to around $22.62bn from nearly $16.92bn in the same period.

Saudi Arabia, the world's oil powerhouse, emerged as the top exporter to Japan, with a value of around $45.12bn during January-October 2008 compared to about $26.64bn during the first 10 months of 2007.

Qatar's exports to the Japanese market leaped to $22.93bn from $13.33bn to overtake Kuwait for the first time as a result of a sharp increase in its LNG supplies to Japan. The value is set to grow further in the future as more Japanese companies are expected to lift LNG from Qatar, which will dominate the global LNG industry when it pumps a record 77 million tonnes in 2011.

Kuwait's exports to Japan soared to $13.51bn from $7.76bn while those of Oman jumped to $4.76bn from $2.91bn. Bahrain was the only GCC nation to record a deficit in its trade balance with Japan given its limited exports to that country as it is not a crude exporter.

The surge in GCC countries' exports to Japan sharply widened their trade surplus to a record $95.77bn in the first 10 months of this year from around $50.18bn in the same period of last year, according to Jetro.

The figures showed Japan's imports from the GCC nations accounted for nearly 30 per cent of their combined oil exports of around $450bn during that period.

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 barrels per day, nearly half its total crude imports.

Experts said the surge in this year's exports by the GCC to Japan was mainly a result of higher crude prices on the grounds the quantity has remained almost unchanged. According to Opec statistics, the price of the cartel's basket of crudes soared to an average $104 a barrel in the first nine months of this year from around $66 in the same period of last year.

Besides crude, the GCC's exports to Japan include aluminium, natural gas, LNG and petroleum products. Their imports from that country comprise mainly electronics, vehicles, equipment, machinery, and other industrial products.

The six members have been locked in negotiations with Japan and other industrial giants for a free trade deal, which they hope would support their drive to attract industrial investment and diversify their economies. Over the past two decades, Japan has remained the GCC's top trading partner and the largest importer of Gulf oil. China is rapidly catching up with Japan in trade exchange with the region and is projected to overtake it in the next years.

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