Guyana’s export performance demonstrated various levels of fluctuations in certain core sectors this year.
For the first half of 2016, statistics provided by the Ministry of Finance show that the balance of trade in merchandise goods recorded a deficit of US$19.1 million, a notable improvement from a deficit of US$250.6 million for the first six months of 2015.
Total export receipts amounted to US$680.4 million, 29.1 percent more than the US$527.2 million recorded at the end of June 2015. This upturn was as a result of higher earnings from gold and other exports.
Exports of merchandise goods (excluding re-exports) rose from a cumulative US$519.2 million in the first half of 2015 to a cumulative US$666.4 million in the first half of 2016. Gold exports more than doubled compared with the first half of last year, rising from US$188.3 million to US$390.7 million. On the other hand, bauxite exports fell from US$53.3 million to US$46.3 million, a decrease of about 13.1 percent, while diamond exports fell by 10.7 percent, from US$9 million to US$8.2 million.
Although global prices for aluminum increased over the first six months of 2016, they remained below 2015 levels. The average price for bauxite exported from Guyana was US$61.7 per metric tonne over the first half of 2016, down from US$76.8 per metric tonne in the first half of 2015. As a result, although the quantity of bauxite exported increased, the total value of bauxite exports was lower in the first half of 2016 than for the same period in 2015.
Similarly, reports from the Ministry of Finance state that the average price per carat received for Guyana’s diamond exports has fallen, resulting in a lower value of diamond exports, despite higher export volume.
The Ministry, in its half year report, said that sugar exports fell from US$30.4 million for the first half of 2015 to US$20.8 million for the first half of 2016, a decline of 31.4 percent. Lower sugar exports reflected reduced quantity, due to lower production in the first half of 2016, despite higher sugar prices.
Rice exports were down by a similar magnitude, falling about 29.8 percent, from US$125.7 million in the first half of 2015 to US$88.3 million in the first half of 2016. Rice exports fell because of lower export quantities and lower prices compared with a year ago.
Although global rice prices improved somewhat over the first six months of 2016, the loss of the Venezuelan market for rice, which paid a relatively high price per metric tonne, resulted in a substantial decrease in the average price received for rice exports. Among other major exports, shrimp and prawns exports increased in the first half of 2016 compared with the first half of 2015, rising from US$27 million to US$29.6 million.
According to the Bank of Guyana, timber export receipts totaled US$19.4 million, 17.3 percent below the value for the corresponding period in 2015, owing to lower export volumes. Export volume was 30.1 percent lower at 52,530 cubic metres. Earnings from other timber exports decreased by US$3.8 million or 16.7 percent while plywood exports decreased by US$0.3 million.
Bauxite export receipts amounted to US$46.3 million, 13.1 percent or US$7.0 million below the value for the corresponding period in 2015, due to a decrease in the average export price for bauxite. Export volume increased by 6.6 percent or 45,591 metric tonnes to 739,390 metric tonnes.
The average export price decreased by 18.4 percent from US$76.8 to US$62.7 per metric tonne. Gold export receipts amounted to US$390.7 million, 107.5 percent or US$202.4 million more than the June 2015 level, on account of higher export volumes and an increase in the average export price of gold. Export volume increased by 102.4 percent to 327,326 ounces as a result of higher declarations, while the average export price per ounce of gold increased by 2.5 percent to US$1,193.5.
YEAR END PROJECTIONS
Finance Minister, Winston Jordan, presented on November 28, the earliest budget the nation has seen in four decades. In his $250B budget, he spoke of the projections for the leading sectors by year end.
In the areas of Agriculture, Forestry, and Fishing, Jordan told the members of the National Assembly, the sectors are expected to contract significantly in the second half of 2016 with a gloomy performance expected for all sub-sectors, except fishing and other crops.
He said, “Despite an encouraging recovery in 2015, sugar is projected to decline by 18.7 percent, to reach 188,000 metric tonnes by the end of 2016. The low production is attributed to the El Niño dry spell experienced earlier in the year which resulted in lower yields, combined with late planting and the frequency of strikes, during the second half of the year.”
In the rice sector, the Finance Minister said that due to continued uncertainty, output is expected to reach 600,000 metric tonnes by year end. He said that this represents a decline of 12.8 percent from the levels achieved in 2015. He said, “The El Niño weather phenomenon and the loss of the lucrative Venezuelan market contributed significantly to the decline in production level. Nevertheless, the Government continues to encourage both farmers and millers to move towards more value-added products.”
He continued, “In this regard, during 2016, 300 acres of aromatic rice variety was planted for the first crop and over 3,000 acres for the second crop, compared to less than 100 acres planted for both crops during 2015. Two millers are actively engaged in this venture and have already secured markets, in the US, for their produce.”
As for the livestock sub-sector, the Finance Minister said that it is expected to decline by 5.1 percent in 2016.
He said, “The gains made in poultry production, which is expected to expand by 3.5 percent due to increased demand, combined with new investment in duck production, is projected to be undermined by a fall in milk production by 19 percent. The decline in milk production is due to reduced demand, prompting farmers to take their animals out of lactation. However, the establishment of two abattoirs in Regions 5 and 9, along with improved breeding stock and better husbandry practices, are expected to boost growth in this sector.”
With regard to the forestry sub-sector, the Finance Minister said that the nation should expect it to contract significantly by 33.3 percent. He said that it is mainly because of Barama Company Limited halting the production of logs and the UK’s restriction on greenheart logs originating from Guyana.
The Finance Minister said, “Both the fishing and other crops sub-sectors performed creditably, with growth recorded at 11.8 percent and 2.5 percent, respectively. Growth in the fisheries subsector is expected to be augmented by the introduction of deep float pelagic tuna production. In the other crops sub-sector, growth will benefit from continued diversification efforts in the areas of fruits, vegetables, and spices.”
In the area of mining and quarrying, the Finance Minister said that this sector is projected to grow by 35.7 percent by the end of 2016, the highest in over a decade.
He said, “Gold production is expected to reach 644,814 ounces as a result of the combined efforts of small and medium-sized miners responding to the generous concessions granted by Government and rising global gold prices, and the two foreign-owned companies reaching full capacity.”
Additionally, Jordan told the National Assembly that the bauxite industry is expected to grow by 9.6 percent, while the other mining and quarrying sector is projected to rise by 22 percent, mainly on account of a 92.5 percent increase in sand production and a 9.2 percent increase in stone production.
As for the manufacturing sector, the Minister said that it is projected to contract by 7.1 percent, as a result of the dismal performances in sugar and rice, as well as a small decline in other manufacturing.
Unfortunately, Jordan noted that construction declined from a budgeted 10.5 percent to a projected 3.2 percent in 2016. This performance is related to a decline in activity in the housing sector and the Public Sector Investment Programme.
The services sector is expected to expand by 1.3 percent, with growth driven by the electricity, water, finance and insurance, and transport and storage sectors. The sector’s share of GDP continues to remain above 40 percent, expressed the Finance Minister.