Kingdom's nonoil exports reach SR17.4 billion

Saudi Arabia's trade activity showed a slight rebound in November from its lowest point in October although still below last year’s figures. Softer global demand is affecting the Kingdom’s export markets, particularly China and Singapore, while the Kingdom’s continued expenditure on mega projects expected in 2015 led to a lesser impact on imported goods, particularly in machinery and electrical equipment, according the National Commercial Bank latest Saudi Economic Review.
In value terms, nonoil exports totaled SR17.4 billion, falling short of last year by 0.3 percent, whereas by weight, nonoil exports reached 3.8 megatons, a 10.2 percent downturn.
On the other hand, the import bill in November amounted to SR50.8 billion, rising over last year by 4.6 percent. By weight, however, imports recorded 5 megatons, dwindling by 26.6 percent Y/Y, the report said.
The weakening of the euro and other major currencies against the US dollar resulted in a lower cost of importing foodstuff and base metals despite the relative rebound in commodities that took place since late September.
"By measuring the returns of nonoil exports to the cost of imports, we notice that the nonoil balance of trade gap has widened by 7.3 percent in November compared to the same period in 2013," the NCB said in its report.
Nonoil export composition remains led by plastics and chemical products which weight respectively 32 percent and 28.4 percent of the monthly total value. The high inelasticity toward the Kingdom’s production of plastics kept annualized growth figures positive, albeit by a small margin of 0.1 percent Y/Y. In contrast, exports of chemical products were impacted by the compounded effect of cheaper oil and weaker global demand, sliding by 13.5 percent Y/Y.
Exports of base metals surged by 35.5 percent on the back of edging up aluminum prices. Indonesia’s export ban on bauxite, the ore used in the production of aluminum, resulted in a negative supply shock, leading to a bid up in aluminum prices. In addition, Ras Al-Khair, the first Saudi aluminum smelter and the world’s largest, has entered the production phase, with a capacity output of 1.8 megatons of smelter-grade alumina per year.
The Kingdom’s key nonoil export markets remain the UAE, China and Singapore, with sizable declines from the latter two countries. While the UAE posted a 3.1 percent Y/Y increase in nonoil exports to SR2.7 billion, China’s imports of the Kingdom’s nonoil exports tumbled by 22.2 percent to SR2.5 billion. More so, Singapore slashed its imports of Saudi nonoil exports by 24.3 percent Y/Y.
On the import front, imports of machinery and electrical equipment, which account for around 28.5 percent of the import bill surged by 17.8 percent Y/Y to SR14.5 billion. Imports of transport equipment also marked a notable increase of 15.6 percent as they were valued at SR10 billion.
Conversely, the Kingdom’s imports of base metals were trimmed by 12.3 percent from last year, down to SR5 billion. Although soft commodities appeared to have bottomed up in September and started to climb back up, the Kingdom’s imports of food stuff fell by 24.3 percent in value terms on the back of stronger purchasing power. The main trading partners by origin of imports are China, the US, and Germany. Imports from China account for about 15.7 percent of the import bill which substantially rose by 43.4 percent to SR8 billion. On the other hand, imports from the US ticked down by 2.9 percent to SR6.8 billion, whereas German imports dwindled by 18.3 percent to SR3.2 billion.