The gloom on the export front refuses to go away. For the ninth month in a row in June 2009, exports have nosedived by 27.7% and during the first quarter of 2009-10 by as much as 31.3%.
At home, if there are green shoots of recovery, at least they are not reflected in the import numbers which too have registered a negative growth rate for the sixth consecutive month (-29.3%); even non-oil imports were lower by 16.5% in June 2009 on a year-on-year basis while the setback during the first three months of the current fiscal was more pronounced at 24.6% compared with the same period of 2008-09.
The good side of bad news is that, thanks to imports decelerating at a faster pace than imports, trade gap has narrowed sharply in June as well as the April-June period of this year.
Trade deficit stood at $6.16 billion for the latest month as against $9.12 billion a year ago; the cumulative figure for the first quarter was $15.50 billion compared with $28.64 billion.
The poor export performance is a sequel to the demand recession that has gripped major economies including the European Union and the United States — our major trade partners.
An improvement in the global economic situation is anticipated in the second quarter of this year and if this materialises, a pick-up in our exports is likely only towards the second half of this fiscal year. Till then, export slide is slated to continue.
However, the significant fact is that, oil imports have dropped — and dramatically.
In June 2009, they were down by a whopping 50.6% and by a hefty 56.8% during April-June 2009. Though the volume of crude purchases from abroad may have been on the rise, the reduction in oil bill has come from the softening trend in the prices of the Indian crude basket.
The average price during the first quarter of this year stood at $59.1 per barrel, which is lower by 50.3% than the average price for the same quarter of 2008-09 while for June 2009, the decline was of the order of 46.7% at $69.12 per barrel. In the event, value of oil imports plummeted during this month and during the first three months.
This, coupled with weak demand for capital goods, raw materials and export-related import items, which have acted as a drag on non-oil imports, so that the overall import bill was manageable and the balance of trade position not a problem to worry about.
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