UAE-Japan trade drops 8.8% to $24.8bn

Japan’s exports to UAE dropped 12% to $4.06bn in the first half of 2013

Led by a 7.9 per cent decline in the average price and a one per cent decline in the volume of import of crude oils, the value of Japan’s trade with the UAE dropped by 8.8 per cent to $24.8 billion (Dh91 billion) during the first six months of 2013 compared to $27.2 billion during the same period in 2012.

The average price of crude oils that Japan imported from the UAE eased to $110.2 per barrel during the first half of 2013, from $119.4 during the same period in 2012. 

Similarly, Japan’s crude oil imports also dropped to 144.5 million barrels from nearly 146 million barrels during this period. Another factor that contributed to the slide in the trade value was considered to be the ebb tide in Japan’s exports to the UAE during the period under review, following the surge in exports during the previous year after the resumption of production and exports from the tsunami affected areas of North Japan. 

The pattern of Japan’s world trade during the first half of 2013 was no different from that of the trade with the UAE. A 10.77 per cent contraction in Japan’s world trade was recorded during the first six months of 2013, which is mainly attributed to the slide in the price and volume of crude oils that Japan imported during this period, and a general decline in her exports of machinery and equipment, especially of passenger motor cars. Japan’s world trade stood at $762.3 billion during the January – June period of 2013, compared to $854.3 billion during the same period in 2012.

UAE was Japan’s 8th largest trading partner during the first half of 2013, with Saudi Arabia from the GCC block one point ahead of UAE at the 7th position. China was Japan’s largest trading partner with a trade value of $146 billion, followed by the United States of America with a $99.4 billion. 

Japan’s exports to the UAE

Japan’s exports to the UAE stood at $4.06 billion during January-June period of 2013, compared to $4.62 billion during the same period in the previous year, a 12 per cent decline.

The drop in the value of exports was mainly attributed to the weakened demand in the UAE for general machinery, electrical machinery and iron & steel products, and to a lesser extent, passenger motor cars.

However, contrary to the general trend, major increases in exports were registered for printing machinery including inkjet printers, air-conditioning equipment, compressors, computers and their components. 

The fall in demand for machinery and equipment was considered to be a global phenomenon during the first half of 2013, as it was found that Japan’s exports of machinery and equipment to most of her export markets such as China, the United States of America and most of the countries in Europe and Asia have declined.

As a whole, Japan’s exports to the world slipped 13 per cent during the first half of 2013 to $355.4 billion, compared to a record $408.6 billion in the previous first half.

Motor Vehicle exports that covered 52.6 per cent of the total exports to the UAE slipped by 4.2 per cent to $2,134.5 million during the first half of 2013 from $2,228 million during the same period in the previous year. 

While export of passenger motor cars, which is the dominant category among the motor vehicles, dropped by 8.6 per cent to $1,359 million from $1,486 million, export of public transport busses increased by 17.7 per cent to $148 million from $126 million.  Similarly, export of motor trucks also rose by 8.7 per cent to $404.4 million from $372 million. 

UAE was Japan’s 6th largest market for passenger motor cars, behind USA, Russia, Australia, China and Canada. It is also worth noting here that many of the popular brands of Japanese passenger cars sold in the UAE are imported from other countries like the USA, Australia and others, where Japanese motor vehicle manufacturers have production units. Imports of cars from such non-Japanese production bases are not accounted in this statistics.

Among general machinery, while export of self-propelled dozers, ship’s derricks, cranes, truck with lifts, air and liquid pumps, pipe taps, valves etc. have dropped, products like printing machinery, air-conditioners, computers and their components, compressors and other engines and motors have shown considerable increases. Export of printing machinery, including inkjet printing machinery, posted a major growth of 120 per cent to $59.7 million from $27.1 million.

Export of computers and their components registered an increase of 76.7 per cent, even though the volume of export was not very high. However, in spite of the surge in the export of some products, export of general machinery as a whole dropped 30.7 per cent to $591.5 million, compared to $853.8 million in the previous first half.

Among electrical machinery, export of electrical ignition equipment rose by 17 per cent to $41 million and transformers by 160 per cent to 20 million.

However, export of transmission apparatus for radio telephony dropped by 52 per cent to $35 million from $74 million in the previous first half. Goods like, insulating cables and wires have also registered considerable decrease. The overall decline in the export of electrical machinery during the first half of 2013 was to the tune of 20 per cent.

After almost a hundred percent increase in exports during the first half of the previous year, exports of iron & steel products and materials dropped 39.6 per cent during the first half of 2013.

The drop was lead mainly by tubes, pipes and pipe fittings. The value of export of iron and steel products dropped to $289.4 million during the Jan-June period of 2013, from $479.1 million during the same period in 2012.  However, still, UAE was the 4th largest export market for tubes and pipes of iron or steel from Japan during the period under review.

Export of rubber products, comprising mostly new tyres, registered a decline of 4.8 per cent to $266.5 million, from $280 million during the first half of the previous year. However, like in the previous first half, UAE remained to be the 4th largest market for new tyres from Japan, behind USA, Australia and Russia.  

Imports from the UAE

Aided by a drop in the average price of crude oils and a marginal decline in the volume of crude oil imports, the value of Japan’s imports from the UAE contracted by 8.1 per cent to $20.8 billion during the first six months of 2013, compared to $22.6 billion during in the same period in 2012. 98.45 per cent of the total imports from the UAE were covered by mineral fuels that include mainly crude oils and gaseous hydrocarbons. The share of aluminium imports from the UAE was just 1.3 per cent of the total imports and the remaining small portion was covered by precious stones, metal scraps and small quantities of seafood and garments.

In the backdrop of an average 17.86 per cent decline in the value of Yen against US dollars during the 1st half of 2013 compared to the same period in 2012, the value of crude oil imports from the UAE dropped by 8.8 per cent to $15,896.6 million from $17,430.1 million. This decline in the value of import is attributed to a 7.7 per cent drop in the average price of crude oils (from $119.4 per barrel to US 110.2 per barrel) and a 1 per cent drop in their import volume. Japan imported a total of 144.5 million barrels of crude oils during the first six months of 2013, compared to 145.9 million barrels during the same period in 2012, which, in terms of value, covered 77.7 per cent of Japan’s total imports from the UAE.

UAE remained to be the 2nd largest supplier of crude oils to Japan, covering a supply of nearly 22 per cent of Japan’s total crude oil imports.  Saudi Arabia remained to be the top supplier of crude oils, with a share of 31 per cent. Other major suppliers of crude oils to Japan were Qatar (13 per cent), Kuwait (7 per cent), Russia (7 per cent), Iran (5 per cent), Indonesia (4 per cent), Gabon (2 per cent), Sultanate of Oman (2 per cent) and Iraq (2 per cent). 

The value of import of petroleum gases from the UAE dropped by 2.7 per cent to $3.95 billion, thanks to a 3.6 per cent decline in the average price of the commodity. At the same time, gas imports, in terms of volume, rose by almost 1 per cent to 4.4 million metric tons from 4.3 million metric tons. UAE was the 4th largest source of petroleum gases to Japan after Qatar, Australia and Malaysia. Oman and Saudi Arabia were the other sources of Japan for petroleum gases, from among the GCC countries. 

Besides Oil & gas, Japan’s other imports were mainly aluminium, precious metals and stones, Copper scraps, plastics, readymade garments, fish and seafood. UAE has been a traditional source of semi-finished aluminium for Japan, and, during the first 6 months of 2013, Japan imported aluminium worth $270 million from the UAE. In terms of volume, Japan imported 118.12 million Kg of aluminium during the first half of 2013, which was 5.95 per cent lower compared to the volume imported during the first half of 2012. 

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