Japan's trade with the GCC counties during the year 2014

17 May 2015
Fall in crude oil price contributes to decrease in trade value

The value of Japan's bilateral trade with the GCC countries contracted 3.82% in 2014 to US $ 164.76 billion, compared to US $ 171.31 billion in 2013. This decline was mainly attributed to an estimated 4.28% average fall in the price of crude oils that Japan imported from the GCC countries in 2014. The average price of crude oils fell to US $ 104.76 per barrel in 2014, from US $ 109.44 per barrel in 2013. The effect of the depreciation in the value of Japanese yen against the US dollar, estimated to be slightly more than 8% in average, during 2014, has also reflected in the reduced value of bilateral trade. Though Japan's trade deficit with the GCC countries is huge, the decline in crude oil price is gradually bringing down the deficit. In 2014, the deficit was brought down by 9.14% to US $ 114.9 billion, compared to US $ 126.5 billion in 2013.

Trend in Japan's Trade with the GCC countries (value in US $ million)

Japan's world trade during the year 2014 slipped marginally by 2.83% to US $ 1,503.7 billion compared to US $ 1,547.5 billion in the previous year. Exports declined by 3.3% to US $ 690.9 billion from US $ 714.9 billion, and imports by 2.39% to US $ 812.8 billion from US $ 832.6 billion. As a result of higher decline in exports compared to imports, Japan's overall trade deficit increased by 3.48% to US $ 121.9 billion in 2014 from US $ 117.8 billion in 2013.

Increase in Japan's Exports:

Japan's exports to the GCC countries showed a strong recovery in 2014 supported by increased demand for machinery and equipment, and iron and steel products. The export value of general machinery surged 24% to US $ 3.45 billion and that of electrical machinery 23.7% to US $ 1.2 billion in 2014. Export of self-propelled dozers witnessed an increase of 46.5% in value to US $ 564.4 million in 2014 from US $ 385.3 million in the previous year. Similarly, export of air pumps rose by 47.6% to US $ 270.7 million and steam turbines by 110.7% to US $ 198.1 million. Export of machinery for temperature changing and steam generating machinery jumped 5 to 6 times in 2014, compared to the previous year. Export of iron and steel products, such as tubes and pipes, surged by 32.2% to US $ 1.58 billion. Export of beverages, including mineral and aerated waters registered a considerable increase of 35.6% to US $ 45.1 million in 2014 from US $ 33.3 million in 2013.

Motor vehicle exports, covering almost 60% of Japan's total exports to the GCC, increased by 8.77% to US $ 14.79 billion, of which, passenger motor cars above 3000 cc engine capacity rose the most, by 10.7%, to US $ 7.6 billion. GCC countries remained to be one of the top export markets for motor vehicles from Japan.

Japan's major exports to the GCC (value in US $ million)

In addition to the above traditional export commodities, increases were registered in the exports of optical goods, nickel and copper articles, water transport machinery such as ships and boats etc. in considerable levels. While export of nickel articles such as pipes and tubes surged by 558% to US $ 170.41 million from US $ 26 million in the previous year, export of coper articles rose by 48% to US $ 15.41 million from US $ 10.36 million.

On the other side, the export value of iron and steel (structural), such as large sized flat rolled iron, and flat rolled alloy steel etc. declined collectively by 21% US $ 555.96 million in 2014 from US $ 705.15 million in the previous year. Textiles and organic chemicals have also registered negative growths in exports at the rate of 11.4% and 15.0% respectively, compared to the previous year.

Increase in Japan's food exports to the GCC:

There had been notable increases in the export of foodstuff from Japan to the GCC in 2014, especially to the United Arab Emirates. Though the value was small compared to major other commodities, foodstuff export to the GCC rose by nearly 17% to US $ 83.04 million in 2014, compared to US $ 71.08 million in 2013. Particularly to the UAE, the increase in foodstuff exports was registered at 38.5% to US $ 50.33 million in 2014 from US $ 36.33 million in the previous year. Most of the increases in food exports to the UAE were attributed to non-alcoholic beverages. Among foodstuff exports to the GCC, 35.58% increase was registered for beverages alone, and 19.3% for fish and seafood. Following table illustrates the growth of food exports to the GCC.

Japan's Major imports from the GCC:

Mineral fuels, including crude oils and gaseous hydrocarbons, remained to be the dominant commodities of Japan's import from the GCC countries in 2014. Nearly 98.5% of Japan's total imports from the GCC fall under this category. Aluminium, organic chemicals, copper articles, plastics, inorganic chemicals, fertilizers, precious stones, fish and seafood constitute the remaining small portion.

Japan's major imports from the GCC (value in US $ million)

The import value of crude oils, the major item of Japan's imports from the GCC, which covered 72.61% of the total imports from the block, fell by 8.96% to US $ 101.53 billion in 2014, from US $ 111.52 billion in the previous year. In terms of volume, Japan's crude oil import declined by 4.89% to 969.21 million barrels in 2014, against 1,019.04 million barrels in 2013. Japan's total crude oil import in 2014, from the world over, was estimated at 1,253.9 million barrels, which was 5.62% lower, compared to the volume in 2013. GCC countries together met 77.30% of Japan's crude oil requirement in 2014, 0.78% higher compared to the supply in 2013. Saudi Arabia topped the list of crude oil suppliers to Japan in the world, supplying 33.26% of Japan's crude oil requirements in 2014, followed by the United Arab Emirates with a supply share of 24.36%. Qatar was the 3^rd largest supplier of crude oils to Japan, covering 11.14% of Japan's total requirement of crude oils.

Japan's import of petroleum gases from the GCC declined marginally in terms of value due to a slight decline in the price of gases. Japan imported 34.06 million tons of petroleum gases from the GCC countries in 2014 at an average price of US $ 845.89 per ton, compared to 34.97 million tons at US $ 848.17 per ton in 2013. Qatar was Japan's largest supplier of petroleum gases in the world, supplying over 20% of Japan's total gas requirement in 2014. UAE stood 4^th in gas supply to Japan, with a share of 8.67% of Japan's total gas imports.

Japan's import of aluminium from the GCC countries surged by 44.77% to US $ 1,095.00 million in 2014 compared to US $ 756.88 million in the previous year. Most of the additional supply came from the UAE, from where, the imports grew by 41.37% in 2014. UAE was the largest supplier of aluminium to Japan among the GCC countries, and the 4^th largest supplier in the world with a share of 8.28% of Japan's total aluminium imports. Aluminium is mostly imported to Japan as raw-materials, in the form of ingots.

Though low in total value, import of some metals like iron & steel in the form of alloys, wastes and scraps, and unwrought lead from the GCC had shown considerable increase in 2014. Oman, Kuwait and Bahrain were some of the suppliers of ferroalloys from the GCC block, together supplying this material worth US $ 7.45 million in 2014. Import of unwrought lead from the UAE rose by 872% in value to US $ 5.57 million in 2014, compared to just above half a million in the previous year.

General trend in Japan-GCC trade with the GCC: - by Country: