The prominent trends of both the depreciating Euro and falling international oil prices are the main factors behind the tightening of Lebanon’s trade deficit since the start of the year. Lebanon’s trade deficit contracted by 15.94% year-on-year (y-o-y) by November, to record $13.29B due to a 15.08% decrease in overall imports outpacing the 10.65% decline in total exports.
Total imports, in the first 11 months of the year, amounted to $16.00B compared to $18.85B during the same period last year. The three major product categories that were imported to Lebanon by November were mineral products (17.16% share of total imports), “machinery and electrical instruments” (11.74% share of total imports) and “products of the chemical or allied industries” (11.07% share of total imports). The yearly change in the value of imported mineral products displayed a substantial drop of 39.84% from November 2014 to $2.75B.This decline goes hand in hand with the average yearly 45% decrease in the price of international oil by November.
In addition, the value of “machinery and electrical instruments” imported went down by 5.73% y-o-y by November to $1.88B. Worth mentioning that the overall tonnage imported increased from 210,349 tons by November 2014 to 472,051 tons this year. Notably, in the month of April alone, 279,862 tons were brought into Lebanon, as electrical transformers were the bulk of those imports. With that in mind, the 5.73% decline came about from a price fall possibly on the back of the average yearly 3% and 15% respective drops of the Chinese Yuan and the Euro since China and Europe sell about 40% of electrical appliances to Lebanon.
Total worth of “Products of the chemical or allied industries” entering Lebanon also downturned by an annual 3.72% to $1.77B, while volume steadied at a level of 430,000 tons. The latter decline was possibly associated with a decline in the overall price of chemical products.
Notably, the three major countries that Lebanon imported goods from were China, Italy and Germany with respective weights of 11.77%, 7.30% and 6.94%.
Similarly, total exports fell yearly from $3.04B by November 2014 to $2.72B by November 2015. Specifically, the value of exported “prepared foodstuffs, beverages, and tobacco” (16.37% share of total exports) experienced a yearly detraction of 4.52% by November despite the 13.78% rise in exported volume to 344,758 tons. It seems that the Lebanese fast moving consumer goods’ (FMCGs) market is following the global bearish price trend of over-the-counter commodities.
Furthermore, exported “pearls, precious stones, and metals”, constituting 14.99% of total exports, went down by 24.62% y-o-y by November. This was mainly due to the 19.75% plunge in the volume exported to 49 tons this year compared to a higher level of 65 tons recorded over the same period last year. In hindsight, the international price of gold throughout the mentioned period also declined by an average of 3.32%.
In addition, “Machinery and electrical instruments” (13.95% share of total exports) underwent an annual 6.70% shrinkage on the back of the 18.21% fall in tonnage exported to 49,600 tons which was partially offset by a rise in export prices.
In terms of the major destinations of the Lebanese exports, Saudi Arabia, United Arab Emirates and Iraq grasped corresponding weights of 11.97%, 10.61% and 7.40%.
In November alone, the trade deficit broadened from $1.14B to $1.32B in November. Total exports declined by 10.60% from November 2014 to $221,796M this year. In parallel, overall imports increased by 10.52% to $1.54B.
Lebanon Imports/Exports by November (in $B)