Declines to 9.35% in April-September from 17.23% in the same period of last year.
The share of petroleum products in the country’s overall merchandise exports has fallen drastically with the thickening of global economic downturn, even as the steep decline in export growth is getting arrested gradually.
During the April-September period, the share of petroleum products in total exports also fell to 9.4 per cent from 17.2 per cent during the corresponding period of last financial year. Part of the drastic fall could be attributed to fluctuations in the petroleum prices which were at a historic high till September last year, but experts say a lack in demand also contributed to the decline during the first half of the current financial year.
While the cumulative exports during the April-September period in 2009-10 stood at $77.9 billion, down 28.47 per cent from $108.9 billion in 2008-09, that of petroleum products dropped over 60 per cent to $7.29 billion from $18.77 billion in the first six months of 2008-09.
Statistics released by the Ministry of Commerce and Industry indicates that the country’s total non-oil exports during April-September 2009-10 fell by 22 per cent at $70.7 billion, from $90.13 billion in the corresponding period last financial year.
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“This sector has observed a higher annual growth than India’s exports of all items,” Professor R S Ratna, Centre for WTO Studies at the Indian Institute of Foreign Trade, said.
A look at the pre-recessionary full year figure for 2007-08 shows petroleum products rose 54 per cent at $29 billion, in a year when exports grew by 29 per cent at $162.98 billion. This goes on to prove that the fall in share during the first half this year, despite a recovery in prices, defies the trend since petroleum exports have been growing at a faster pace.
Some experts say the fall in exports has also been due to prices of other commodities. “The weight of other commodities both in our import as well as export baskets, is much more. Besides oil, other factors that contributed to the decline are fertilisers, chemicals and metals,” Nomura’s India economist Sonal Varma told Business Standard.
Another instance of less volatility can be seen in the share of crude oil and petroleum products in the country’s total import basket. During the first six months of 2009-10, it stood at 28.26 per cent, compared to 34.17 per cent in April-September 2008-09.
Total import of crude oil and petroleum products during the first six months of this year fell 44 per cent to $35.21 billion, against $63.22 billion in April-September 2008-09, according to figures released by the Ministry of Petroleum and Natural Gas.
“The import of this (oil) sector constitutes one-third of total imports of India. Its share is static in volume terms but has increased due to the rise in the petroleum prices in the world market,” added Ratna.
Total non-oil imports during April-September 2009-10 had declined 26 per cent to $89.77 billion, from $121.71 billion in April-September 2008-09. Total merchandise imports during the same period fell by 32.66 per cent to $124.58 billion this year, from $185 billion during the corresponding period last year, according to official data.
According to D K Joshi, principal economist of ratings agency Crisil, last year has been very dramatic with respect to change in crude prices as well as export-import demand conditions. “I do not think such a scenario will continue. It is mainly imports which got impacted due to sudden shocks in international crude. To some extent, even exports got affected but the fall was largely due to low demand,” he said.
Crude oil prices have started soaring again since October this year, breaching the level of $80 a barrel. The average price of the Indian crude basket for 2009-10 is $64.8. “Last year during August-September, when the oil prices started dipping, the country’s exports or imports were doing fairly well. However, looking at the current trend it is being noticed that exports are gradually rising with oil prices going up,” said Nabin Ballodia, director, KPMG.
According to the petroleum ministry, global oil prices of crude and petroleum products remained volatile since 2003-04. During 2007-08, the Indian crude basket averaged $79.25 per barrel. However, since July last year, it shot up to a level of $142.04 per barrel before plummeting again.