Data released by the Central Statistical Office of Foreign Trade in Latvia show that the export value of commodities in September this year fell for the first time in the last six months. Although the value of goods exports in September was generally high and exceeded one billion euros, i.e. higher than in other separate months of this year, exports of goods were 1% lower than in September last year.
The decrease in the small overall FM export was explained by an earlier forecast to reduce cereal and rapeseed exports due to poor grain harvest in the autumn, as well as a decline in the re-export of some electrical equipment and mechanical devices. "Excluding the fall in exports of these goods, total exports in September would have been 3.9% higher than in September last year," added the minister.
In September, the largest negative impact on the change in the value of export of goods was observed for the group of agri-food products, in particular due to the decline in exports of cereals and rapeseed. Traditionally, the highest amount of grain and rape export can be seen in the autumn months, but in September this year, the value of exports of these goods was 3.8% and 76.8% respectively as compared to the same month of the previous year.
"The unpredictably dry weather in Latvia this summer has had a negative impact on the harvest, which also has an impact on export data, and it is likely that the value of exports will be lower than in the other autumn months. .% ", said FM.
The fall in exports in September was somewhat offset by an increase of 17.7% in exports of timber and timber products, which was influenced by the increase in exports of logs to Estonia and the United Kingdom and an increase in exports of unprocessed timber to Sweden.
"Despite the fact that exports of timber to timber products reached the highest export value since 1995, this export group of goods was the main driving force of exports in the first nine months of 2018. It provided the largest contribution to the growth of exports. In nine months it increased by 8.3% compared to the same period of the previous year, and just over one third is an increase in timber exports, "the ministry said.
From other product groups affected by changes in exports in September, FM recorded a 8.7% increase in the export of chemical products due to the increase in exports of pharmaceuticals to Lithuania. The increase in the export of metals by 7.9% was caused by the increase in iron and steel exports to Turkey, as well as the increase in exports of iron and non-alloy steel and bars to the European Union (EU) countries.
"In assessing the development prospects of Latvia's exports in the medium term, negative risk has intensified since the beginning of this year, and the export growth may be limited by the uncertainty of the surrounding global environment due to the increase in protectionist global trade. The value of the business climate indicator in October this year has reached the lowest level since the middle of last year, and the evaluation of the perspectives of products in Latvian industry in the fourth quarter of this year slightly deteriorated in comparison to previous quarters "- stressed the ministry.
Similarly, FM admitted that the factors determining the decline in exports in September were not related to the decline in external demand. However, the latest World Economic Report of the International Monetary Fund (IMF), which was extended in October, saw a decline in world trade by 0.6 percentage points in the current year to 4.2% compared to the July forecasts for this year. This is mainly due to the increase in protectionist world trade.
"The IMF has already reduced global trade growth already in previous economic forecasts, which were restored in July this year, which leads to the conclusion that since the middle of this year, the risk for external trade in the world has only increased, and thus, the growth rate of exports Latvian goods will fall in the coming months and will be lower than the average growth rate in the first nine months of this year, or 8.3%, "said FM.