The UAE maintained its position as the largest Middle East market for Japanese products in the first 10 months of 2012 while it was the second regional exporter to the Southeast Asian giant, according to official data.
The figures by the government’s Japanese External Trade Organization (Jetro) showed exports to Japan by the six-nation Gulf Cooperation Council (GCC) surged by nearly 13.7 per cent during that period because of strong oil prices.
From around $six billion in the first 10 months of 2011, Japan’s exports to the UAE soared to $7.5 billion in the first 10 months of 2012.
The UAE’s exports to Japan, mostly crude oil, gas and aluminum, also swelled from around $35.1 billion to $36.7 billion in the same period.
Analysts said the increase in Japan’s exports to the UAE was mainly a result of lower dollar value against the yen and a surge in the country’s imports this year because of a business upswing resulting from high public spending.
The UAE’s imports from Japan during January-October 2012 accounted for nearly 32 per cent of the Middle East’s total imports from that the Southeast Asian industrial giant of nearly $23.7 billion. The UAE’s exports to Japan also amounted to about 25 per cent of the region’s total exports to that country.
The UAE has emerged as one of the largest economic partners of Japan over the past decades as it supplies that country with nearly a quarter of its oil needs. Japan is also a major investor in the UAE, mainly in the hydrocarbon sector, with such investments exceeding $three billion at the end of 2011.
Saudi Arabia emerged as the largest Gulf exporter to Japan with a value of around $45.5 billion in the first 10 months of 2012 compared with nearly $41.2 billion in the same period of 2011.
It was also the second largest importer from Japan, with about $5.8 billion in the 10 months of 2012 compared to $5.3 billion in the same period of 2011.
The report showed the GCC’s combined exports to Japan swelled by around 13.7 per cent to about $131.3 billion from around $115.8 billion in the same period. The group’s imports from the Asian nation shot up by around 31 per cent to nearly $20.7 billion from around $15.8 billion.
The surge in the exports widened the GCC‘s trade surplus with their main economic and commercial partner from around $100 billion in the first 10 months of 2011 to nearly $110.7 billion in the first 10 months of 2012.
The report showed Qatar, the world’s third largest gas power, emerged as the third exporter to Japan in the Middle East because of a sharp rise in its LNG sales to that market over the past few years. Its exports soared to nearly $30.2 billion in the first 10 months from $23.7 billion in the same period of 2011.
Kuwait’s exports to Japan, mostly crude oil, grew to around $12.5 billion from $10.4 billion while those of Oman rose to about $six billion from $4.1 billion.
Exports by Bahrain, a small trade partner of Japan with limited hydrocarbon resources, declined to $411 million from $488 million. But its imports from Japan swelled to $661 million from around $364 million, according to Jetro.
Massive oil supplies have kept the GCC-Japan trade balance largely in favour of the 31-year-old Gulf economic and political group, with the surplus peaking at nearly $117 billion in 2008. It stood at about $122 billion last year.
Japan gets more than 80 per cent of its oil needs from the GCC, Iran, Iraq and other Middle Eastern crude producers. Saudi Arabia and the UAE alone supply it with more than two million bpd, nearly half its total oil imports.
Besides crude, the GCC’s exports to Japan include aluminum, natural gas, LNG and petroleum products, with the bulk of the aluminum supplies coming from Dubai and Bahrain. The GCC’s imports from that country comprise mainly electronics, vehicles, machinery, and other industrial products.
In 2011, a sharp increase in oil prices boosted exports of goods by the UAE and the other GCC members to Japan by nearly 40 per cent.
From around $101.9 billion in 2010, the exports rocketed to nearly $141.1 billion in 2011. But Japan’s exports to the GCC declined to around $19.56 billion from $20.02 billion in the same period.
The higher growth in GCC exports sharply widened the group’s surplus in trade with Japan by nearly 49.5 per cent to $122.5 billion from $81.9 billion.