The Bahamas’ merchandise trade deficit fell by 12.3 per cent in 2015 to $2.719 billion, as the decline in imports offset a more than one-third reduction in exports.
The annual trade report, released by the Department of Statistics, revealed that Bahamian goods’ exports - a vital source of foreign currency earnings - dropped by $246.4 million or 35.7 per cent year-over-year in 2015.
The decline, from $689.2 million to $442.8 million, was attributed largely to declines in the re-export of ‘mineral fuels’ and ‘chemicals’, but was offset by a greater fall in the Bahamas’ import bill.
This fell by $628.5 million, or 16.5 per cent, dropping from $3.79 billion in 2014 to $3.162 billion last year. Bahamian imports thus fell to their lowest level in five years, since 2011, another sign of a struggling economy where consumer demand is relatively low.
A major contributor to the decline is likely to have been the reduction in global oil prices, which lowered the Bahamas’ nine-figure annual fuel import bill, plus a reduced level of economic activity highlighted by a 1.7 per cent contraction in real gross domestic product (GDP).
These factors are likely to have figured prominently in reducing the Bahamas’ merchandise (physical goods) trade deficit from 2014, when it breached the $3 billion mark at $3.101 billion.
“The trade deficit decreased by 12.3 per cent between 2014 and 2015, resulting in a negative trade balance of $2.7 billion,” the Department of Statistics report said.
“The value of commodities imported into the Bahamas totalled $3.2 billion, resulting in a significant decrease of 16.5 per cent between 2014-2015.”
It conceded that there had been a “significant decline” in the total value of Bahamian exports, attributing this especially to a 57.4 per cent fall in the value of ‘mineral fuels’, which dropped from $165.3 million to $70.4 million.
“The category of ‘chemicals’ also showed significant decline from 2014’s total of $276.2 million, compared to $145.7 million for 2015,” the Department of Statistics said.
“Domestic exports ($223.8 million) accounted for 50.5 per cent of total exports. The main contributors to domestic exports were the categories of ‘chemicals’, totalling $135.5 million (60.5 per cent of total domestic exports); ‘food and live animals’, totalling $62.1 million (27.7 per cent of total domestic exports), and ‘crude minerals’ totalling $24.8 million (11.1 per cent of total domestic exports).
“Three commodities, ‘expansible polystyrene’ valued at $83.7 million; ‘spiny lobster tail fresh, chilled and frozen’, at $56.2 million; and ‘other compounds containing a pyrimidine or piperazine ring’ at $49 million, accounted for some 84 per cent of total domestic exports.”
On the other side of the merchandise account, machinery and transport equipment accounted for 19.4 per cent of Bahamas imports, standing at a total $614.6 million, while ‘mineral fuels’ - the most expensive commodity in 2014 - dropped to $535.5 million or 16.9 per cent due to the global oil price drop.
Food-related products, such as meats, fruit and vegetables and processed foods, accounted for $508.7 million or 16.1 per cent of total imports, with manufactured goods equivalent to $432.9 million or 13.6 per cent.
“The commodities which contributed mainly to total imports were, ‘motor gasoline (unleaded)’, valued at $197.4 million; ‘diesel’, valued at $157.8 million; ‘other lubricating oils’, valued at $62.3 million; and ‘strips of polystyrene’ at $42.9 million. The combined value of these commodities represented 14.5 per cent of total imports.”
The year-over-year decline in the merchandise trade deficit is helpful to the Bahamian economy, given that it places less strain on the capital account and the main foreign exchange earners - tourism and financial services - to bridge the gap.
However, the dramatic drop in exports, which also hit a five-year low and are down 45.5 per cent from the $811.711 million ‘high’ in 2013, represents a worrying development as there is less diversification in foreign exchange-earning sources.
The US maintained its position as the Bahamas’ major trading partner, sending $2.583 billion worth of imports to this nation. It also remained the Bahamas’ major export market at $364.727 million.
“While the United States ($2.6 billion) maintained its position as the Bahamas’ main trading partner, representing 81.6 per cent of total imports, there was a significant amount of trade as it relates to imports between the Bahamas and Dominica ($47.1 million), which showed a substantial increase over 2014’s $3.3 million ,and Japan ($35.8 million),” the Department of Statistics said.
“In terms of exports, the US ($364.7 million), France ($16.4 million), Finland ($14.1 million) and Canada ($5.5 million) were among the top partner countries, representing 82.3 per cent, 3.7 per cent, 3.1 per cent and 1.2 per cent of total exports, respectively.”
It added: “Trade between the Bahamas and CARICOM countries was minimal, as the region represented only 2.4 per cent of total imports and 1.5 per cent of total exports.
“Oil products imported from Dominica, valued at $43.1 million, accounted for 56.5 per cent of total imports from the region. In terms of exports, Barbados, St Kitts and Nevis and Antigua and Barbuda combined represented 88.6 per cent of CARICOM’s total in 2015.”
Comments
John 7 years, 9 months ago
This is in line with what has been happening around the world since 2015, which many felt was the worst year for shipping cargo since 2011. In fact no cargo ships left Asia for the first three months of 2016 and many claim that shipping and trade was at a standstill. Some owners of cargo ships claimed that even when the ships were moving, the loads were not at capacity and many pondered parking their ships until things got better: .' The Baltic Dry Index is down about 98 percent from its peak of 11,793 points in May 2008, marking its lowest level since the records began in 1985, Reuters reported.
“Trade really is slowing. Bellwethers, from giant port operator DP World to the Association of American Railroads and purchasing-manager indexes worldwide, all point to decelerating volume. That bodes poorly for growth, but it is way too early to set alarms ringing outside the transport industry,” analyst Tim Worstall told the Wall Street Journal.
Maersk, the world’s largest shipping container operator by capacity, reported an 84 percent plunge in 2015 profit after its oil unit was hit by lower energy prices, and its shipping-container division got squeezed in slower global trade. Shares fell the most in almost a year on the news Wednesday." . "The Shipping Industry Is Suffering From China’s Trade Slowdown So many boats, so little cargo as Chinese exports and imports drop. Bruce Einhorn " . "As of March 2016, it costs around $400 to move a 40-foot container from Shenzhen to Rotterdam, which is barely enough to cover the cost of fuel, handling, and Suez Canal fees. Here’s some more context. Let’s say that you want to travel for a year; it’s cheaper to put your personal belongings in a shipping container as it sails around the world than to keep it at a local mini-storage facility.
No ocean carrier can earn returns above its cost of capital at these price levels.
A slowdown in demand has contributed to this price collapse, but it can’t entirely explain record low freight prices. In spite of a very real downturn in Chinese exports, trade volumes remain higher than just a few years ago, when container shipping prices were relatively high." .
John 7 years, 9 months ago
The new data released on Thursday represent the first snapshot of global trade for 2015. But the figures also come amid growing concerns that 2016 is already shaping up to be more fraught with dangers for the global economy than previously expected.
Those concerns are casting a shadow over a two-day meeting of G20 central bank governors and finance ministers due to start on Friday. Mark Carney, the Bank of England governor, was set to warn the gathering that the global economy risked “becoming trapped in a low growth, low inflation, low interest rate equilibrium”.uote
asiseeit 7 years, 9 months ago
Maybe this is because the Crawfish is being stolen by our friends to the south?
MonkeeDoo 7 years, 9 months ago
Ever watch the water in the toilet bowl when flushed ? Thats us on the way to the cesspit !
banker 7 years, 9 months ago
The statistic to look at in the article, is the decline of imports to the Bahamas:
Folks are spending less. There is less money to go around. The economy contracted by 1.7% but in real terms to the average person on the street real spending and real buying power declined by double that ~ about 3.5% depending on which method the Central Bank uses to calculate the GDP. And when you factor in VAT, the purchasing power of Bahamians has significantly declined.
So there are no bright spots anywhere. I am willing to bet that the car dealerships and car lots are going to have to scale back significantly as the economy contracts. Then the appliance stores will suffer. All major high-dollar domestic purchases will see a decline, and some will close.
SP 7 years, 9 months ago
............................................ Everything is relative .......................................
All consistent with recent SuperValue and Super Wash reports. As Bahamas economy continues to shrink, this decline will similarly continue creeping upwards to larger business's.
Successive governments 4 decades of exclusion policies which lock too many out of building the country has now come full circle to bite them hard in the backside.
Too many have too little.
Without affirmative action and redistribution of wealth the "have nots" only recourse will be focused attention on the few "haves" and it doesn't look too promising for them.
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