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Philippines Economy News

Agricultural trade falls in fourth quarter on import decline; exports rise

agricultural trade falls in fourth quarter on import decline exports rise 816x445 - Agricultural trade falls in fourth quarter on import decline; exports rise

INTERNATIONAL trade in agricultural goods fell 4.8% year-on-year to $5.06 billion in the fourth quarter of 2019, with exports growing and imports declining, the Philippine Statistics Authority said (PSA) said Monday.

Exports rose 6.6% year-on-year to $1.63 billion while imports fell 9.4% year-on-year to $3.43 billion.

In the fourth quarter, the top three agricultural exports were edible fruits and nuts and peel of citrus fruits or melons, which accounted for 39.4% of total agricultural exports or $643.85 million. These were followed by animal or vegetable fats and oils and their cleavage products; prepared edible fats; animal or vegetable waxes at 13.5% of the total or $220.23 million; and preparations of vegetables, fruits, nuts or other plants at 9.9% of the total or $162.17 million.

The top three agricultural imports were cereals at 15.5% of the total or $531.91 million; miscellaneous edible preparations at 11.9% or $407.39 million; and prepared animal fodder at 11.8% of the total or $404.30 million.

In a text message, Rizal Commercial Banking Corp. (RCBC) Chief Economist Michael L. Ricafort said the increase in agricultural exports was due to improved diplomatic and business links with foreign markets.

“Agricultural exports in 4Q 2020 grew by 6.6% (on) improved diplomatic/business relations with major… export markets such as Japan, China, South Korea, and other Asian countries that are the biggest buyers of the country’s agricultural exports in recent years, as well as the further diversification of the country’s export markets to more countries around the world,” Mr. Ricafort said.

However, Mr. Ricafort said the decline in agricultural imports was due to the adverse effects of the global economic and trade slowdown caused by the lingering effects of the US-China trade war, which reduced demand and prices of oil and other major global commodities being imported by the Philippines.

“These events caused the year-on-year decline in the dollar value of agricultural imports,” Mr. Ricafort added.

In an e-mail interview, UnionBank of the Philippines chief economist Ruben Carlo O. Asuncion expects the decline in agricultural trade to continue due to, among others, the coronavirus outbreak (Covid-19).

“It is expected to be further challenged as 2020 started with various potential shocks such as the impact of Covid-19 on the demand for Philippine agriculture exports and local demand for imports moving forward,” Mr. Asuncion said.

Mr. Ricafort added that the global coronavirus outbreak will hit agricultural trade and dampen overall economic growth.

“Potential headwinds for Philippine agricultural exports and imports, especially the expected economic slowdown in China, which is the world’s second-biggest economy and among the biggest export markets for the Philippine agricultural exports such as tropical fruits (like) bananas and pineapples and other agricultural products,” Mr. Ricafort said. — Revin Mikhael D. Ochave

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