The worrying decline in Guyana’s export performance-Pt 1
Guyana’s exports are large relative to the size of its economy, and because of that fact, external demand for the nation’s commodities are important to its economic and fiscal performance.
It is crucial to note however that slow global growth, especially among Guyana’s key trade partners, poses a risk to Guyana’s economy. The reality is that Guyana’s export markets are highly concentrated, with the United States and Canada together accounting for about half of all of Guyana’s exports.
This risk has been exacerbated by Brexit. Although the United Kingdom is a limited export market for Guyana, the wider effects of Brexit on the world economy could have a negative impact on external demand for Guyana’s goods. To address this risk, the Government is working to develop new export markets (such as the Mexican market for rice paddy), and build a strong domestic economy. In the meantime, there are a number of worrying economic changes taking place, one of which includes the decline in the export performance of some of Guyana’s traditional and crucial revenue earners. The statistics provided by the Ministry of Finance tell a revealing story in this regard.
Export performance for 2013
Take for example, Guyana’s sugar export earnings in 2013. At that time, it amounted to US$114.2 million, or 13.6 percent less than the 2012 level. This outturn was mainly due to an 18.7 percent decline in the volumes exported, despite the increase in average price of 6.3 percent.
According to the Ministry of Finance, the volume of sugar exported amounted to 160,284 metric tonnes or 36,821 metric tonnes less than the level exported in 2012. As a percent of total sugar exports, those to the EU under the ACP/EU Sugar Protocol was 84.1 percent compared with the 76.0 percent recorded in 2012. Exports to the CARICOM region amounted to 6.8 percent compared with 13.0 percent recorded at end- 2012. Average export price for sugar increased by 6.3 percent or US$42.1 to US$712.6 per metric tonne, compared to US$670.5 per metric tonne in 2012. This pricing mechanism is explained by guaranteed prices by the EU market.
Bauxite exports also decreased in 2013. Statistics show that earnings amounted to US$134.6 million, 10.7 percent below the 2012 level of US$150.8 million due to a decline in volume by 24.7 percent to 1,678,971 metric tonnes from 2,229,848 metric tonnes in 2012. This fall was on account of lower volumes of MAZ and calcined grade bauxite exports, which decreased by 18.5 percent and 2.9 percent respectively, from the 2012 levels. There was an 18.6 percent increase in the average export price of bauxite from US$67.6 to US$80.2 per metric tonne in 2013.
Gold export receipts were also disappointing during 2013. In fact, statistics show that those earnings were US$648.5 million, 9.5 percent or US$68.4 million lower than the 2012 level of US$716.9 million. This contraction was attributable to a sharp decline in the world market price since export volume rose by 6.0 percent to 482,527 ounces from 455,072 ounces in 2012. The average export price per ounce of gold declined by 14.7 percent to US$1,344.0 per ounce from US$1,575.4 per ounce in 2012.
As for the timber industry, the value of timber exports was US$38.5 million, 1.4 percent below the 2012 value on account of lower volumes exported. Export volume declined by 5.6 percent to 112,970 cubic metres from 119,645 cubic metres in 2012. Some forms of timber exports even decreased by 1.5 percent to US$36.3 million from US$36.9 million in 2012.