Sudans: Export earnings decline in first half of 2016/ EIU 21.09.16
Elisabeth Janaina
Export earnings decline in first half of 2016/ EIU 21.09.16
Event
According to new figures from the Central Bank of Sudan (CBS), total export earnings in the first half of 2016 were US$1.5bn, down from US$1.8bn in the year-earlier period.
Analysis
Sudan's two largest sources of export earnings in the first half of the year were gold and livestock. Of Sudan's total export earnings in this period, just over half were from exports to the Middle East, with Africa and Asia respectively the next largest destinations for Sudanese exports. Earnings from gold exports over the period were US$419.6m from 10.6 tonnes, compared with US$465.3m from 12.1 tonnes in the first half of 2015. Livestock export earnings were broadly steady, at US$417.6m (US$410.4m in the first half of 2015). The main factor behind the fall in export earnings has been the declines in prices for sesame and crude oil. Earnings from sesame exports fell from US$305m in the first half of last year to just US$164.7m in January-June 2016, despite a slight increase in the export volumes (up from 187,000 tonnes to 197,000 tonnes).
Meanwhile, earnings from crude oil exports in the first half of this year were US$146.4m, from 4.1m barrels of oil (equivalent to 22,600 barrels/day), compared with US$252.8m from 4.9m barrels in the first half of last year. The reduction is primarily the result of lower average oil prices, but probably also reflects greater consumption of oil domestically.
Sudan's earnings from the export of South Sudanese oil are not detailed. The authorities have not published any data on this for many months, but in the past the exports have brought in at least US$50m a month—and usually nearer to US$100m—to Sudan. Earlier this year the two governments indicated that they had agreed a temporary reduction in the fee arrangements, but this is unlikely to have brought Sudan's earnings below US$50m a month.
Impact on the forecast
We will update our trade figures with the latest CBS data. However, they are in line with our existing projections of only muted hydrocarbons and gold revenue, and we continue to expect Sudan to run a substantial trade deficit throughout the forecast period.