Imports falling but value of oil climbing

[Lazie]

Article Published: Sunday, June 6th, 2010

Although the value of goods and services imported by the country fell by US$92.8 million or 19.0 per cent to US$400.9 million during the month of January this year, when compared with that recorded in January of last year, the value of oil imported jumped by US$27.7 million or 21.6 per cent to US$155.8 million when compared with the $128.2 million spent on the commodity in January of 2009.

Data released by the Statistical Institute of Jamaica (Statin) further revealed that oil imports accounted for 39.0 per cent of total imports in January of this year. The same data also indicated that the value of machinery and transport equipment declined by US$45.3 million or 48.1 per cent to US$48.8 million, when compared with January of 2009.

Meanwhile, imports of raw materials and intermediate goods, which accounted for 59.7 per cent of total imports amounted to US$238.2 million; consumer goods, US$ 127.1 million; capital goods, excluding motors cars, US$26.9 million and passenger motor cars US$7.1 million.

Some 35.2 per cent or some US$141.2 million of these goods were imported from the United States (US), the country’s major trading partner, while US$60.4 million or 51.7 per cent of total exports were sent to that country, which is widely regarded as the locomotive of the international economy. Jamaica’s trade deficit with that country fell to US$80.7 million in January of this year, compared with the US$131.6 million recorded during previous year.

Turning to the export side of the equation, Statin pointed out that total exports climbed by US$7.6 million or 7.0 per cent to US$117.0 million during the period under review, leading a fall in the trade deficit to US$283.9 million in January of this year, compared with the US$384.4 million recorded during the same period of 2009.

Domestic exports climbed to US$106.9 million, with some US$14.2 million of this amount coming from the free zones. Exports of crude materials, the prime commodity group exported, fell by US$10 million to US$46.0 million during the period under review because of the fallout in the bauxite alumina sector.

Traditional domestic exports fell by US$7.0 million to US$50.5 million during the month under review, while agricultural exports accounted for a paltry US$1.5 million, accounting for only 3.0 per cent of total exports during the review period. There was however an increase in non-traditional exports, jumping by US$10.1 million to US$56.3 million, while other exports such as beverages and tobacco fell to US$4.0 million.

Other non-traditional exports also jumped US$22.7 million to US$40.6 million, driven by mineral fuels such as ethanol. The country imported US$48 million in goods to the Caricom region in January, while exporting only US$4.0 million from that region.

Domestic exports to region however fell to US$3.6 million or 3.4 per cent of the total value of goods exported during the period under review. The value of goods imported and re-exported to the region during the first month of this year, when compared with the same period of the previous year, pushing the deficit with Caricom down to US$44.3 million, a decline of US$5.3 million or 10.6 per cent, when compared with the US$44.3 million recorded in January of 2009.

http://www.sunheraldja.com/2010/06/i...-oil-climbing/

[Lazie]

Interest-rate cut signals Bank of Jamaica optimism

The central bank continues to signal lower interest-rates to the financial markets
, cutting the rate payable on its 30-day instrument this past week to 9.5 per cent, from the previous 10 per cent, set in February. The 50 basis-points reduction, the same as the level of signal rate cut by the bank for the March quarter, the bank said, comes in light of positive changes in inflationary impulses, which, it projected, were likely to lead to the fiscal year inflation out-turn being at the lower end of the projected range of 7.5 per cent to 9.5 per cent.

The cut became effective Friday June 4.

"Secondary trading of securities, as well as successive auctions of Treasury bills all indicate an endorsement by the market of the new interest-rate norms (where) Treasury bill yields have fallen below 10 per cent," the Bank of Jamaica (BOJ) said in a statement.

It said too, that what it termed "the entrenchment of the lower interest-rate structure" had been supported by the appreciation of the exchange rate and "the reduction of sovereign credit risk, as reflected in falling yields on internationally traded GOJ bonds".

Bond yields affected

Bond yields have been affected by the Jamaica Debt Exchange, under which the Government took the decision to restructure its domestic debt by replacing some 350 high-priced government domestic bonds with 24 new issues, priced at a lower average rate of 12.25 per cent.

The recall was a precondition to the US$1.25-billion standby facility that was approved by the International Monetary Fund for Jamaica and was expected to result in savings of US$40 billion, the Government's debt-servicing costs.

In the meantime, the BOJ has noted that its outlook for growth in fiscal year 2010-2011 remains largely unchanged, despite the interruption to economic activity in the Kingston Metropolitan Area and fallout in tourism-related earnings anticipated in the short run.

The prospective reopening of a major alumina processing plant in June is expected to contribute to modest recovery in GDP growth in the current fiscal year.

The central bank also said in its statement that the ongoing reforms embedded in the Government's economic programme would lead to a lasting improvement in public finances and debt management and would create a basis for longer-term financial stability.

sabrina.gordon@gleanerjm.com

http://jamaica-gleaner.com/gleaner/2...business3.html

[MissLondon]

Does this mean Jamaica is producing more? Or just cutting back?

[Lazie]

Does this mean Jamaica is producing more? Or just cutting back?

I know that production in agri has increased and at the same time the oppressive gov't has insisted that anything that is produced locally will not be imported. I'm also thinking that the decrease in imports may have been as a result of the recession and the decrease in consumption.

[MissLondon]

Yes Im sure Ive read about agricultural production increasing and the cap on imports. Even with the increase in oil price, thats still a net drop in imports and a reduction of the trade deficit. Good stuff!

[Mosiah]

I know that production in agri has increased and at the same time the oppressive gov't has insisted that anything that is produced locally will not be imported. I'm also thinking that the decrease in imports may have been as a result of the recession and the decrease in consumption.

increased from the hurricane years?

[Lazie]

increased from the hurricane years?

In his first presentation as Agri Minister, Tufton pointed out that the agri output in the previous year was at the same level as in 1987. That answer yuh question?

[Mosiah]

thanks!

[Assasin]

you a talk like we have Hurrican every year after 1987.

Even when we had no Hurricane for 3 years there were declines.

Even with a drought this year there has been growth.

[Mosiah]

there was no growth for 18 years?

[Karl]

...as yuh post dis...wah appen wid sale of hile weh nuh he-ven si fi wi shores? Hit hin-crease in quantity and value tuh wi?

[Assasin]

check out this page.

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