MARKET DEVELOPMENT
Import Patterns Continue
Import Patterns Continue
04/07/2014 (Business Recorder) - The eleven-month import numbers are out and they don reflect any substantial shift from the broad composition observed in 10M FY14. Data released by Pakistan Bureau of statistics continue to show an increase in capital expanding imports--such as machinery--along with a corresponding decline in consumption oriented imports that kept total imports in 11M FY14 almost at the same level as that in the year-ago period. However, there have been some noteworthy developments on month-on-month basis.
After peaking in March and April, the imports of edible oil-palm and soybean-tanked substantially in May 2014. Palm oil imports fell by 11 percent month-on-month basis, whereas that of soybean declined by 90 percent. As mentioned earlier in these columns (See BR Research column Imports in check, May 29, 2014), this had to happen as the buying spree in March-April was only a seasonal uptick due to Ramazan-related preparations.
On that note, however, consumers would like to see a decrease in retail level prices of edible oil, as the landed cost of palm and soybean oil fell by 9 and 19 percent (year on year), respectively in 11M FY14.
Meanwhile, machinery imports continue on its upward trend, rising 4.5 percent month on month in May and 22 percent year on year. Mays jump in machinery imports came on the back $34 million of power generation machinery imports and $26 million of telecom machinery imports. The rise in latter was led by other apparatus ($17 million) followed by $9 million worth of mobile imports. It should be noted, however, that on 11M basis imports of other telecom apparatus are down 29 percent, whereas that of mobile is marginally up by 3 percent.
What is intriguing is the continuous decline in motor car imports in both CBU and CKD segments. PBS data reveals that import of completely built cars is down 44 percent year on year in 11M FY14, whereas that of CKD is down 9 percent.
The former is understandable in the light of stricter auto import regulations, but the latter is intriguing considering that auto sales is, in fact, marginally up during the comparable period.
Finally, the mother of all imports in Pakistan, petroleum, remained under control in May; in fact, it fell 5 percent month on month, with the 11M year on year comparison down by 2.5 percent. While full year petroleum import number can be expected to stay within limits, that for the ensuing months is expected to rise 5 percent on average, thanks to the drama in the Middle East.
After peaking in March and April, the imports of edible oil-palm and soybean-tanked substantially in May 2014. Palm oil imports fell by 11 percent month-on-month basis, whereas that of soybean declined by 90 percent. As mentioned earlier in these columns (See BR Research column Imports in check, May 29, 2014), this had to happen as the buying spree in March-April was only a seasonal uptick due to Ramazan-related preparations.
On that note, however, consumers would like to see a decrease in retail level prices of edible oil, as the landed cost of palm and soybean oil fell by 9 and 19 percent (year on year), respectively in 11M FY14.
Meanwhile, machinery imports continue on its upward trend, rising 4.5 percent month on month in May and 22 percent year on year. Mays jump in machinery imports came on the back $34 million of power generation machinery imports and $26 million of telecom machinery imports. The rise in latter was led by other apparatus ($17 million) followed by $9 million worth of mobile imports. It should be noted, however, that on 11M basis imports of other telecom apparatus are down 29 percent, whereas that of mobile is marginally up by 3 percent.
What is intriguing is the continuous decline in motor car imports in both CBU and CKD segments. PBS data reveals that import of completely built cars is down 44 percent year on year in 11M FY14, whereas that of CKD is down 9 percent.
The former is understandable in the light of stricter auto import regulations, but the latter is intriguing considering that auto sales is, in fact, marginally up during the comparable period.
Finally, the mother of all imports in Pakistan, petroleum, remained under control in May; in fact, it fell 5 percent month on month, with the 11M year on year comparison down by 2.5 percent. While full year petroleum import number can be expected to stay within limits, that for the ensuing months is expected to rise 5 percent on average, thanks to the drama in the Middle East.