Exports cross $100 billion in six months.

New Delhi: Goods export has crossed the $100 billion mark during the first six months of 2010, bringing the full year target of $200 billion within easy reach.

The latest foreign trade numbers indicated sustained recovery in exports, even as import growth moderated from around 45% to 23% in June. However, export growth too slowed down in June compared to the preceding months.

“The numbers seem to signal that there is some sort of turnaround. There is some good news here,” the usually cautious secretary for Commerce, Rahul Khullar, said.

However, most of the $3.5 billion rise in exports in June was due to an uncharacteristic jump in the exports of engineering goods and machinery. Against the usual $2.5-3 billion, the value of engineering goods exported hit a record $5 billion in June. “We are trying to get the number reconfirmed,” Khullar said.

During the first three months of 2010, there was a 7% jump in exports compared to 2008. The numbers, however, have been almost flat during the second quarter of 2010 at around $50 billion, indicating that the ‘rubber band’ effect of pent-up demand may be starting to wear off. The same trend was visible in imports, with the second quarter numbers growing just 6% over 2008 compared to 14% in the first quarter.

Khullar pointed out that both import and export numbers have been impacted by lower price of petroleum products.

Around 160 million tonnes of petroleum is refined every year, nearly a fourth of which is exported in the form of products such as petrol and diesel. Crude oil makes up a third of the total goods-import by value and has declined in value in June due to global financial uncertainties.

Khullar refused to commit the slight slow down in growth to troubles in the European Union, which accounts for around a fifth of the exports, but pointed to circumstantial evidence to suggest so. Readymade garments, which find many takers in Europe, were one of the worst performers in June - declining by 14% even as overall exports rose by 30%.

Besides petroleum products, gold, pearl and precious stones, which are also imported primarily for re-export, also showed strong growth - both in import and export. Agricultural commodities such as coffee and spices saw a decline in export contributions despite maintaining their volumes due to price drops. Rice exports declined due to the impact of the ban placed on export of non-basmati rice after the poor monsoons last year.

Khullar indicated that the government is considering whether to re-allow non-basmati rice exports, but said a decision can be made only after making sure the monsoons are normal this year.


Source : dnaindia.com