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NEW DELHI, DEC 8: A sharp decline in world commodity prices as well as the continued fall in the prices of manufactured goods contributed significantly to the decline in exports during April-October, 1998, the commerce ministry spokesperson said.
This will be evident from the WTO annual report-1998 which states that the slump in Asia's growth contributed significantly to depressed commodity markets, with oil prices and non-fuel commodity prices falling by about 30 per cent and 15 per cent respectively on an annual basis.
Although the prices of manufactured goods have continued to decline in 1998, their decrease is considerably smaller than in the case of primary products.
This year will be the third in a row with a decrease in the dollar price of internationally traded goods. The average price for total merchandise exports are falling back to the level of 1991, the lowest in the 1990s.
Thus, it will be seen that in respect of a number of commodities and products, while exports have grown in volume orquantity terms, export earnings have been lowered due to lower price realisation. For instance, in coffee, poultry and dairy products, floriculture (to the US and Japan), plastics and linoleum, cotton yarn, fabrics and made-ups, man-made fibres, etc, exports have increased in volume, but the realisation is low.
On the other hand, in the case of some items like gems and jewellery, ready-made garments, cashew, etc, exports during April-September 1998, have increased due to positive quantity changes despite the negative unit value realisation.
The main items accounting for a negative growth according to disaggregated April-September 1998 data are cotton yarn, engineering goods, basic chemicals, electronic goods and man-made yarn.
The performance in engineering goods was particularly affected by barriers faced in markets like the European Union as also the lack of availability of warehousing facilities for purchase of goods in Africa and Latin America, besides the South East Asian crisis and the globalrecession.
In fact, the export decline was largely due to a negative growth rate in exports to Asia and Oceania and West Europe, which together account for a total share of 61 per cent of India's exports.
The impact of the South East Asian crisis can be clearly seen in the negative growth rate of exports to this region. In respect of west Europe, while there is a negative growth rate in exports to Germany, UK and Italy, the growth rate has been positive in exports to France, Belgium and Finland.
In regard to other regions, there is a positive growth rate in exports to America, East Europe and Africa, as also in exports to Saudi Arabia, UAE and Israel. Exports during April-October, 1998, fell by 5 per cent in dollar terms but increased by 10.28 per cent in rupee terms.
The spokesperson said that many other countries, including China, have also been affected by the strain caused by the Asian crisis, For instance, China's export growth rate is estimated to have slumped from 20.9 per cent last year tojust 1.3 per cent in the first 10 months of 1998.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
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