JETRO on Japan-GCC trade during the year 2008

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Japan's trade with the Arab Gulf Co-operation Council (AGCC) countries surged by 43.1% during the year 2008 to US $ 171.7 billion, against US $ 120.0 billion in 2007.  Japan's exports to the 6-nation GCC block increased by 28.4% to US $ 27.6 billion, and imports from the GCC by 46.3% to US $ 144.2 billion. Though the steep increase in the price of crude oils during the first half of 2008 had a major impact on the trade value, the global economic slowdown of 2008 did not appear to have any effect on the bilateral trade.  The oil boom-backed economic expansion in the Gulf countries continued to support increased Japanese exports to these countries when the world was facing a financial crisis in 2008. The expansionary trend in the bilateral trade continued until the end of the 3^rd quarter of 2008, and it was only in the 4^th quarter some symptoms of a slow down started to emerge in the Japan-GCC trade.  

Machinery and equipment - the driving force behind surge in exports:

Nearly 82% of the total exports from Japan to the GCC were comprised of machinery and equipment that saw an increase by 32.8% to US $ 22.5 billion, compared to 17.0 billion in 2007. The largest single item among the general machinery was mechanical shovels that grew in exports by 93.9% to US $ 586 million, from 302 million in 2007. Front-end shovel loaders followed, with an increase in export by 92.8% to US $ 384 million, compared to US $ 199 million in 2007. Another major item among the general machinery that saw huge expansion in exports was distilling or rectifying plants that increased in exports by 704.5% to US $ 206.4 million in 2008. Major increases were also recorded in the exports of various types of cranes, self-propelled trucks with lifting or handling equipment, and bulldozers or angle-dozers.

Export of transport equipment covered nearly 56% of the total exports to the GCC. A 38.2% increase was recorded in the export of passenger cars of gasoline engine, with a value of US $ 10.7 billion in 2008, compared to 7.8 billion in the previous year.  Among passenger motorcars of gasoline engine, export of cars above 3000 cc rose by 70.3% to US $ 5.5 billion, compared to US $ 3.2 billion in 2007. While export of medium capacity cars  (1500 - 3000 cc) rose by 20.9% (US $ 4.4 billion), export of lower capacity cars (1000 - 1500 cc) declined by nearly 11% to US $ 758.2 million from US $ 851.4 million in 2007. A 32.1% increase was recorded in the export of goods wagons that reached a value of US $ 2.03 billion in 2008, compared to US $ 1.5 billion in the previous year. Other major items that saw rise in exports were crane lorries (83.0%) and dump trucks (258.8%).

Crude oils dominate Japan's imports from the GCC:

The 6-nation GCC block was the largest supplier of crude oils to Japan, meeting nearly 75% of Japan's crude oil requirements in 2008. The value of crude oil imports surged by 49.5% in 2008 to reach an amount of US $ 114.9 billion, compared to US $ 76.8 billion in 2007. Japan imported a total of 1,125.7 million barrels of crude oils from the GCC in 2008, at an average price of US $ 102.04 per barrel. The price of crude oils in 2008 was around 48% higher than the average price in 2007. Import of light oils and oil preparations increased by 30.3% to 7.4 billion US dollars. The value of imports of petroleum gases and other gaseous hydrocarbons also increased in similar proportions to reach US $ 20.6 billion in 2008. 

The only other major import from the GCC was semi-finished aluminium, mainly from the UAE and Bahrain, valuing around US $ 430 million.   

Saudi Arabia:

Japan's largest trading partner in the GCC:

Saudi Arabia was Japan's largest trading partner among the GCC countries and the largest supplier of crude oils in the world. Saudi - Japan trade grew by 38.6% to US $ 58.3 billion in 2008, driven by both increases in Japan's exports to, and imports from Saudi Arabia.  

Japan's exports to Saudi Arabia rose by 16.6% to US $ 7.8 billion in 2008, with export of transport equipment surging by 38.1% to US $ 3.9 billion, compared to US $ 2.8 billion in the previous year. Export of road tractors for semi-trailers increased by 991% to US $ 75 million from just 7 million in 2007, making Saudi Arabia Japan's largest market for this commodity in the world.  Export of goods wagons increased by 48.6% to US $ 810.5 million, in the place of US $ 545.5 million in 2007. Japan's export of general machinery to Saudi Arabia declined by 11.8%, lead by declines in the export of air compressors, centrifugal pumps and parts for vapour generators. However, in spite of the decline, Saudi Arabia still stands as Japan's number one export market in the world for vapour generator parts.

Saudi Arabia supplied Japan with 441.5 million barrels of crude oil, covering 29.09% of Japan's total imports of crude oils in 2008. Due to this huge supply of oil to Japan, Saudi Arabia became the 3^rd largest supplier of goods to Japan, after China and the US, with a value of US $ 50.5 billion. Saudi Arabia was also a major supplier of petroleum gases to Japan, such as liquefied propane and liquefied butanes, amounting to US $ 3.5 billion in 2008, an increase of 20.3% compared to the previous year. Saudi Arabia was the world's largest supplier of liquefied propane and 3^rd largest suppler of liquefied butanes to Japan in 2008.

UAE:

Japan's largest export destination among the GCC countries:

UAE has maintained its position as the largest export market for Japan among the GCC states, with a share of 39.2% of the GCC market in 2008. Japan's exports to the UAE grew by 34.0%, with export of transport equipment surging 40.6% to US $ 5.2 billion. 78.5% of Japan's exports to the UAE were covered by machinery and equipment that include, in addition to transport machinery, general machinery and electrical machinery.  A new addition in 2008 among the export goods were railway equipments such as passenger coaches and other related materials, signalling the advent of a new area in the export market in the Gulf states. Among general machinery, UAE was Japan's largest market for self-propelled cranes, with an export growth of 91.4% to US $ 131.3 million in 2008 from 68.6 million in 2007. For electrical machinery, UAE toped among Japan's markets for automatic circuit breakers, electric conductors and liquid transformers. UAE also remained to be Japan's major markets for colour television sets, digital video cameras, and different kinds of electric home appliances.

Japan's imports from the UAE, grew by 43.7% in 2008, to US $ 46.4 billion, compared to 32.3 billion in 2007. UAE, ranked as the 2^nd largest supplier of crude oils to Japan, was also ranked as the 5^th largest supplier of goods to Japan, after China, US, Saudi Arabia and Australia. Japan imported 369.2 million barrels of crude oils from the UAE in 2008, covering 25.1% of Japan's total crude oil imports. The average price of crude oil was US $ 104.3 per barrel in 2008, compared to US $ 69.63 in 2007. UAE was Japan's 5^th largest supplier in the world of petroleum gases, with a value of US $ 5.6 billion, a surge by 57.8% compared to the figures in 2007.  Supply of petroleum gas from the UAE included liquefied natural gas, liquefied propane and liquefied butanes, in which UAE was Japan's top supplier of liquefied butanes. For liquefied propane gas, UAE ranked 3^rd among the major suppliers to Japan. UAE was also the largest source of aluminium imports for Japan, among the GCC countries, in semi-finished form, amounting to US $ 340.0 million in 2008. UAE was Japan's 3^rd largest supplier in the world, of unwrought aluminium alloy, and 9^th largest exporter of unwrought aluminium.

Qatar:

Top supplier of Petroleum gases to Japan among the GCC countries:

Japan's trade with Qatar - the 3^rd largest trading partner and the top supplier of petroleum gases to Japan among the GCC countries - rose by 50.4% to US $ 28.2 billion in 2008, compared to US $ 18.8 billion in 2007. Japan's exports to Qatar surged by 9.1% to US $ 2.0 billion. Qatar was Japan's 2^nd largest market for heat exchange units, of which, exports surged by 164.3% to US $ 80.4 million, from 30.4 million in 2007. Similarly, export of electric voltage conductors, for which Qatar was Japan's 3^rd largest market in the world, increased by 81.4% to US $ 77.2 million in 2008.   However, export of one of the major items - Nickel Alloy Pipes - for which Qatar is still Japan's top market in the world, declined by 13.8% to US $ 129.7 million from 150.5 million in 2007.

With regard to Japan's import from Qatar, it surged by 54.8% to US $ 26.2 billion, mainly due to the steep increase in the price of crude oils and petroleum gases and partly due to the increase in the volume of their import into Japan. Qatar was Japan's 4^th largest supplier of crude oils in the world, with a value of US $ 17 billion in 2008.  Qatar was also Japan's 3^rd largest supplier of petroleum gases in the world, for which the value surged by 65.1% to US $ 8.1 billion. Imported petroleum gases included liquefied natural gas, liquefied propane gas and liquefied butane gas. Qatar was Japan's 2^nd largest source of propane and butane gases and 4^th largest source of natural gas in the world. Other major imports from Qatar were Methanol (Methyl Alcohol), which increased by 144% in 2008 to US $ 32 million, compared to US $ 13 million in 2007, and urea fertilizer, for which, Qatar was Japan's 3^rd largest supplier in the world in 2008.

Kuwait:

Surge in General Machinery exports to Kuwait

Japan - Kuwait trade increased by 48.5% to US $ 17.2 billion in 2008, compared to 11.6 billion in 2007. Japan's major exports to Kuwait remained to be passenger motorcars, with export of higher capacity cars (above 3000 cc) surging by 33.7% to US $ 487.8 million.  There was a major increase (124.4%) in the export of higher capacity diesel cars too (above 2500 cc), which reached US $ 30.5 million from 13.6 million in 2007. The total export value was elevated by US $ 202.4 million, when Japan exported a distilling/rectifying plant to Kuwait, for which Kuwait became Japan's No. 1 export destination in the world.     

Kuwait was Japan's top supplier of light oils and oil preparations in the world in 2008, for which, the import value reached US $ 2.5 billion, against US $ 1.8 billion in 2007. Crude oil was the largest single commodity of import from Kuwait, valued at US $ 11.3 billion in 2008. Kuwait was also a leading supplier of petroleum gases to Japan, mainly of liquefied propane and liquefied butanes. Kuwait was Japan's 4^th largest supplier of propane and the 5^th largest supplier of butanes in the world.

Oman:

Trade growth highest among GCC countries: 

Japan's trade with Oman grew by 54.6% to US $ 9.4 billion in 2008 fuelled by increases in both exports to and imports from Oman. Japan's exports to Oman grew by 55.0% to US $ 3.9 billion, the highest rate of growth among the GCC counties. Machinery and equipment covered 91.4% of the exports with transport equipment alone covering nearly 78% of the total exports.  Export of passenger motorcars exceeding 3000 cc in capacity, more than doubled in 2008 to reach a value of US $ 1.3 billion, making Oman the 5^th largest export market for Japan in the world for luxury passenger cars. Another major increase in export was seen in the market of crane lories that grew by 152% to US $ 20.8 million from just 8.3 million in 2007.  Under metal products, export of seamless casing or tubing for oil industry surged by 73.8% to US $ 106.3 million in 2008, compared to US $ 61.2 million in 2007. Oman ranked 3^rd in the world as Japan's export market for this category of goods.

There had been a 54.2% increase in Japan's imports from Oman. Oman became a major supplier of crude oils and liquefied natural gas (LPG) to Japan in 2008 by becoming the 9^th largest crude oil supplier to Japan in the world, and the 7^th largest supplier of liquefied natural gas.  The value of Oman's crude oil exports to Japan grew by 70% to US $ 3.5 billion, and that of LPG by 33.1% to US $ 2 billion in 2008.  Oman held the No. 1 position among Japan's suppliers of fresh or chilled beans among foodstuff.  Japan's foodstuff import from Oman grew by 5.9% in 2008, valuing at US $ 8.6 million. 

Bahrain:

Japan's Exports to Bahrain near to the billion-dollar mark:

For the first time ever, Japan's exports to Bahrain reached near to the billion-dollar mark in 2008 supported by increased exports of machinery and equipment and their parts. Exports were valued at US $ 932.2 million, a major jump from the previous year. Export value of general machinery more than doubled to US $ 110.5 million in 2008. Noted increases in exports were recorded for marine rotary engines (55.7%), 360-degrees revolving mechanical shovels (88.1%), and parts for malt treatment machines and gas and diesel engines. Among transport machinery, export of road tractors for semi-trailers, and goods wagons jumped by 112.4% and 40.8% respectively. Major increases were also recorded in the export of medium capacity and higher capacity passenger cars.

The value of Japan's imports from Bahrain declined by 3.3% to US $ 415.7 million in 2008, compared to US $ 430.1 million in 2007, mainly caused by reduced imports of commodities such as crude oils and semi-finished aluminium. Crude oil imports from Bahrain declined by 78.6% to US $ 25.6 million in 2008, from US $ 119.9 million in 2007.  Import of unwrought aluminium fell by 20.6% to US $ 54.3 million from US $ 68.4 million. However, compensating the decline in the crude oil imports, Japan's imports of light oils and oil preparations from Bahrain increased by 27.1% to US $ 264.4 million in 2008, compared to 208 million in 2007. Bahrain had also entered into Japan's petroleum gas market with an export of liquefied propane valued at US $ 5.5 million in 2008.

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© Press Release 2009