Singapore's imports from UAE expands by 39% in Q1 2010

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A Dubai ChamberDubai Chamber study indicates that oil continues to dominate the lion city's imports from the UAE
Dubai, UAE: With oil being a major import of Singapore from the UAE, the former reported a 39% year-on-year increase in its imports from the UAE in the first quarter of 2010, after a 16% slump during the same period a year ago, indicated a study released recently by the Dubai Chamber of Commerce & IndustryDubai Chamber of Commerce & Industry.

Singapore is a major oil processing centre, importing crude oil and supplying many countries with processed oil and oil products. The country also provides oil storage facilities for processed oil and oil products. As global economic recovery leads to increasing demand for oil, prices have started to recover from the slump in early 2009, the study revealed.

Fig. 1 shows the value of Singapore's trade with the UAE in the first quarter of 2007 to 2010. Imports in 2008 registered a 39% growth, reaching SGD 1.7 bn. The slowdown in 2009 pulled the total for the same period to only SGD 1.4 bn, before showing signs of recovery in 2010. On the other hand, exports had declined by 15% in 2008 to a total of SGD 2.3 bn, narrowing down the trade balance from a year ago level of SGD 1.6 bn to just SGD 595 mn.

The 22% increase in exports to SGD 2.8 bn the following year widened trade balance again to SGD 1.4 bn. Although exports declined slightly by 4% to SGD 2.7 bn in 2010, trade balance remained highly favourable to Singapore at SGD 714 mn. Compared to the previous year's figure, nonetheless, 2010 trade balance represented a narrowing down of 48%.



Oil continues to dominate Singapore's imports from UAE

Fig. 2 shows the comparative statistics on Singapore's imports from the UAE for the first quarter of the last 4 years. It is worth noting that the 2010 figure was even higher than the 2008 level, indicating increasing demand for the oil and oil products as global economic recovery proceeds. Although, remaining very much lower, imports of other products likewise posted an increase of SGD 41 mn, to a total of SGD 232 mn.

Singapore exports to the UAE expanded significantly in recent years. In 2009, the UAE was the 18th largest export market of Singapore, ahead of Belgium and France. Likewise the UAE has become Singapore's single largest export market in the Middle East.

Singapore's top exports to the UAE are pearls and precious stones/metals. In 2007, exports of the products reached SGD 1.7 bn, going up to SGD 2.8 a year later. However, the value declined to SGD 2.7 bn in 2009. On a quarter-on-quarter basis, the Q1-2010 export value of SGD 933 mn was 50% higher than the previous year's record, heightening expectations for much highest total exports for the whole year (Table 1). It is also worth noting that despite the global crisis, the Q1-2009 value of SGD 623 mn was higher by 14% than the corresponding exports in the same quarter of the preceding year.

Despite the global crisis, exports of Electrical/Electronic equipment and parts also posted an 18% increase in 2009, to reach a total value of SGD 479 mn in the first quarter of the year. However, an 11% decline in the same quarter in 2010 pulled down the total export value of the products for the period to SGD 428 mn.

The combined export value of the three major export groups reached SGD 1.8 bn, representing 68% of total exports during the first quarter of 2010 and posting a year-on-year growth of 12% for the quarter and continuing the increasing pattern posted since 2008.

Prospects for continued relations bright

Singapore has the broadest network in Asia. It has standing free trade agreements with US, Japan, European Free Trade Association and other key economies in Asia. Likewise, it has signed FTAs with UAE, Qatar and Oman. In addition to the network, the country maintains a very favourable climate for businesses and investors, providing various financial assistance schemes and tax incentives to attract new investments and support growth of businesses. It also has the most modern shipping, transport and logistics infrastructure and systems in East Asian. Given UAE's strength and capacity for new ventures and foreign investments, a wide range of opportunities for cooperation are open to the two countries.

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© Press Release 2010