Agri trade deficit widens to $2.81 billion in Q1

THE trade deficit in agricultural goods expanded 10.2% year on year to $2.81 billion in the first quarter, with plunging exports significantly outweighing a decline in imports, according to the Philippine Statistics Authority (PSA).

In a report, the PSA said overall trade in agriculture — or the sum of exports and imports — fell 8.6% to $5.90 billion during the quarter, a reversal from the 30.7% gain posted a year earlier.

Agricultural imports, which accounted for 13.9% of imports overall, dropped 3.3% to $4.50 billion in the first quarter. The decline in agricultural exports was even greater — 20.8% to $1.55 billion. Agricultural exports accounted for 9.2% of all exports.

The top agricultural export commodity group was edible fruits and nuts; peel of citrus fruit melons, which were valued at $439.51 million or 28.4% of the farm export total.

Agricultural products shipped to ASEAN hit $165.42 million, with tobacco and manufactured tobacco substitutes the top exports.

Malaysia was the country’s top export market within ASEAN, accounting for $52.58 million or 31.8% of overall farm exports to the region.

“Exports of agricultural goods to EU member countries in the first quarter of 2023 reached $380.74 million, which contributed 18.7% to the country’s total value of exports to EU member countries,” the PSA said.

The Netherlands was the top buyer of Philippine agricultural goods from within the European Union (EU), purchasing $180.77 million and accounting for 47.5% of exports to the region.

Among the commodity groups, animal or vegetable fats and oils and their cleavage products; prepared edible fats; animal or vegetable waxes were the top agricultural exports to the EU.

Cereals accounted for the largest share of agricultural imports at 21%, valued at $916.94 million.

In the three months to March, agricultural imports from the Association of Southeast Asian Nations (ASEAN) were valued at $1.47 billion, accounting for 15.5% of total imports.

Indonesia remained the top source of imports from within ASEAN, accounting for $412.51 million.

“The country’s agricultural imports from EU member countries amounted to $411.51 million or a share of 19.8% to the total value of imports in the first quarter of 2023,” the PSA said.

Within the EU, Spain was the top supplier of agricultural goods with imports worth $93.93 million, accounting for 22.8% of overall farm imports.

Meat and edible meat offal topped the list of imports from the EU.

“Lower global commodity prices in recent months amid risk of recession in the US, which is the world’s largest economy, after aggressive Fed rate hikes since 2022 to bring down/better manage inflation, partly led to the year-on-year decline in both agricultural exports and agricultural imports,” Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message.

However, he noted that both agricultural imports and exports may still improve due to improved weather. “The onset of the rainy season with no large storm damage so far should help boost agricultural exports.” — Sheldeen Joy Talavera