Nigeria’s All- products terms of trade (TOT) index decreased by 0.35 percent in the second quarter of the year (Q2’21) as the value of Nigeria products exported decreased to the imported.
The National Bureau of Statistics (NBS) disclosed this in its latest Commodity Price Indices and ToT report published on its website on Wednesday.
According to NBS the decrease in Nigeria’s TOT recorded was due to prices for live animals, animal products, wood and articles of wood; wood charcoal and articles, vehicles, aircraft, and parts thereof and vessels among others imported into the country during the period.
The terms of trade (TOT) is a ratio of the price of a country’s export commodities relative to the price of its imported commodities, expressed in percentage terms.
In other words, it measures the worth of a country’s exports in terms of its imports.
An increase in the terms of trade over two periods or when the value is greater than 100 percent indicates that the country receives more value for its exports than it gives for its imports. Conversely, a value lower than 100 percent indicates an unfavorable term of trade, as the importing country has to exchange more of its product for the same value of exports.
The report stated: “The All- commodity terms of Trade for April, May, and June, 2021 stood at 101.40, 101.77 and 101.05.
NBS also revealed that the All -commodity group import and export indexes increased by 1.07 percent and 0.75 percent during the period, respectively.
“The All-commodity group terms of trade grew by 0.37 percent in May but fell by 0.71 percent in June and on average decreased by 0.35 percent between April and June 2021.
“The decline in terms of trade between April and June was driven by decreases in the prices of live animals, animal products (-3.5 percent), wood and articles of wood, wood charcoal, and articles (-1.59 percent), vehicles, aircraft, and parts(-1.45 per cent).
“The decline was, however, mitigated by an increase in the price of products of the chemical and allied industries (1.14 per cent).”
On import, it said: “The All -commodity group import index increased by 1.07 per cent between April and June 2021. This was driven mainly by an increase in the prices of products of the chemical and Allied industries (1.40 per cent), wood and articles of wood, wood charcoal, and articles (1.37 per cent) Papermaking material; Paper and paperboard articles (1.23 per cent)
“The All-region group import index increased by 1.07 per cent between April and June 2021 due to increases in import prices across All-regions; Oceania (1.4 per cent, America 1.36 percent, Africa 1.22 per cent, Asia 1.11 per cent and Europe 0.96 per cent respectively. The monthly percentage change showed an increase of 0.12 per cent in May and 0.95 per cent in June.”
On export it stated:” The All-commodity group export index increased by 0.72 per cent between April and June 2021.
This Was driven mainly by an increase in the prices of Product of the chemical and Allied industries (2.54 per cent), Plastic rubber and articles (0.85 per cent) and Mineral products (0.74 per cent). However, the index was negatively affected by Live animals, animal products (-2.61 per cent), Vehicles, Aircraft, and parts (-0.24 per cent) and Wood and articles of wood, wood charcoal, and articles (-0.23 per cent).
“All-region export index increased by 0.72 per cent between April and June 2021 due to increases in export prices to All-regions except Africa.
“During the period under review, America recorded 3.46 per cent, Europe 0.56 per cent, Oceania 0.27 per cent and Asia 0.18. The month–on–month changes show an increase of 0.48 per cent in May and 0.23 per cent in June.” NBS said.
Nigeria’s largest trading partners for the quarter were India, China, Spain, Canada, and the Netherlands.