Foreign Trade Statistics Report 2015

APRIL 2016 THE ECONOMICS AND STATISTICS OFFICE

1. INTRODUCTION

The annual Foreign Trade Statistics Report is produced by the Balance of Payments Unit of the Economics and Statistics Office (ESO). The statistics on imports are primarily obtained from the computerized records of the Customs Department as maintained by the Computer Services Department as well as from data generated from the Total Revenue Integrated Processing System (TRIPS). These records are based on documents of imports and exports of goods as completed by importers, exporters or their agents who are required to record the appropriate statistical tariff code using the Cayman Islands Customs Tariff Law (CICTL). The CICTL is based on the Harmonised System (Harmonised Commodity Description and Coding System) of the Customs Cooperation Council (CCC).

The task of the ESO is mainly to classify the Customs data using the Standard International Trade Classification (SITC) Revision 3, incorporate data from other relevant sources such as the Port Authority and the Petroleum Inspectorate, and present the data in aggregate format. The process of classification by SITC is a time-intensive, laborious task as there have been a significant number of goods that are not classified or mis-classified. The objective of the classification process at ESO has been to minimize the number of such cases; over the years, the value of commodities that are not classified by SITC codes has diminished.

In addition to the classification by SITC codes, ESO also classifies all imported commodities by Broad Economic Category (BEC) based on international guidelines issued by the United Nations Statistical Division (UNSD).

ESO compiles exports data mainly from external sources namely, the US Census Bureau, the Statistical Institute of Jamaica and the UK Trade Data Online website. Exports data taken from the Customs Department are used to complement these.

2. EXPLANATORY NOTES AND DEFINITIONS

2.1 Trade Classification Systems
The Cayman Islands’ version of the Harmonized System of Classification is the primary classification standard used for the Cayman Islands’ foreign trade. In addition, the Standard International Trade Classification (SITC) Rev 3, which is the classification of international trade issued by the United Nations Statistical Division (UNSD), is used for the compilation of both the imports and exports of goods. Finally, the classification of imports by Broad Economic Categories (BEC) is based on international standards recommended by the UN.

2.2 System of Trade
The “General Trade System” is the system of coverage used in the tabulation of merchandise in this report. Under this system, all goods entering the Cayman Islands are recorded as imports while all goods leaving the country are recorded as exports.

2.3 Coverage
This report covers merchandise trade only. Trade in services are not included.

Included in the import and export statistics in this publication are goods sent abroad for repair and returned and goods re-exported as incorrect or faulty since they cannot be easily identified at the time of import. Excluded are goods in transit or other trans-shipments not destined for the Cayman Islands market, bank notes and coins in circulation; and parcel post exports for which no records are kept. Goods brought into the country directly by residents but are not declared are also excluded by default for lack of documentation.

The values recorded for imports and exports over a particular period represent the documents brought to account by Customs during that period. They may also include some goods actually arriving towards the end of the previous period but are accounted for in the current period.

Exports statistics cover both re-exports and domestic exports. Re-exports, which comprise the larger part of exports, are goods of foreign origin which have not been materially transformed while in the Cayman Islands. Domestic exports include goods produced in the country, extracted from its natural resources or manufactured in the country. These include goods of foreign origin which have been assembled or transformed in the country.

2.4 Valuation
All values are shown in Cayman Islands dollars (CI$). Imports are valued at cost, insurance and freight (c.i.f) which is the value up to the time of delivery at the port. It includes incidental charges but excludes customs or any other duty paid on arrival.

Exports are valued at free on board (f.o.b), that is the value at which goods were sold by the exporters, and it includes all local charges to the exporting vessel or aircrafts. Freight and insurance are not included.

2.5 Revisions
Revisions are inevitable, thus the trade data on prior years have been revised largely as a consequence of corrections on previous errors, omissions, and misclassifications as reflected in the updated entries of the Customs computer system.

2.6 Abbreviations
P – Preliminary
R – Revised
c.i.f – cost, insurance and freight f.o.b – free on board
.. – not available
– – nil or negligible
< – less than half the final digit shown
NES or nes – not elsewhere specified

2.7 Limitations
In the Cayman Islands, a number of importers do not provide codes, or provide improper codes. Over the years, this issue required the ESO to vigilantly verify codes and provide missing ones. ESO continues to review the imports data with the aim of improving the accuracy, reliability and proper classification of the data.

Given the volume of imports, full details of the quantity and value of all imports are not available. The new Cayman Islands Customs data collection system TRIPS and the new Customs Tariff 2012 which went into effect on March 1, 2013, have addressed some of the issues encountered with the previous system.

3. COMMENTARY ON TRADE 2015

3.1 Visible trade balance
In 2015, the visible trade deficit stood at CI$746.0 million, a contraction compared to the CI$792.4 million recorded in 2014. This resulted primarily from the drop in total imports which stood at CI$763.0 million, overwhelmingly outweighing exports (CI$16.9 million) as in prior years. The largest contributors to the trade deficit were: (a) mineral fuels, lubricants and related materials (CI$99.7 million); (b) food and live animals (CI$165.7 million); (c) machinery and transport equipment (CI$146.1 million); and (d) miscellaneous manufactured articles (CI$112.2 million) (see Table 1.1)

The total value of goods imported fell by 6.3 percent, while the level of exports also fell by
22.7 percent. The decline in imports was largely a reflection of the reduction in the value of petroleum products, while the decrease in exports resulted from a fall in re-exports of personal items and commodities and transactions not elsewhere specified (see Table 1.2 and Chart 1).

 

 

Imports Exports Trade Deficit

3.2 Imports
In 2015, the total value of goods imported into the Cayman Islands contracted by 6.3 percent to reach CI$763.0 million, compared to CI$814.4 million recorded in 2014 (see Tables 2.1 to 2.7). The fall is largely attributed to the continued decline in the international price of fuel, which resulted in the overall decline in the value of petroleum imports.

On the other hand, non-petroleum products increased by 2.0 percent to CI$663.3 million compared to CI$650.5 million recorded in 2014. Largely accounting for this performance was the increase in the imports of machinery and transport equipment (16.0%), crude materials except fuel (11.0%), and other commodities not classified elsewhere (11.9%).

Consequentlty, the contribution of fuel imports to total imports fell from 20.1 percent in
2014 to 13.1 percent in 2015. Food and live animals was the largest contributor to total imports (21.8%) while machinery and transportation imports accounted for 19.3 percent and miscellaneous manufactured articles, 15.0 percent (see Chart 2).

CHART 2: PERCENTAGE DISTRIBUTION OF IMPORTS BY SITC SECTION, 2015

 

Imports by category of goods
Chiefly influencing the value of imports in 2015 was the sharp decline of 39.2 percent in the value of minerals, fuels, lubricants and related materials. This was largely due to the significant fall in the price of petroleum products. On average, the price of petroleum products in the international market fell by 39 percent. On the other hand, the quantity of fuel imports increased by 7.0 percent, traced mainly to aviation jet and aviation gas.

The importation of miscellaneous manufactured articles fell by 13.4 percent, moving from a value of CI$131.9 million in 2014 to CI$114.2 million in 2015. This was largely attributed to the 69.2 percent drop in the imports of professional, scientific and controlling instruments to CI$3.1 million, down from the CI$10.2 million recorded in 2014. This may be associated with the normalization of medical equipment imports for a new hospital project.

Imports of photographic apparatus remained relatively stable as it recorded a slight decrease of 0.4 percent, while miscellaneous manufactured articles not elsewhere classified (n.e.c) fell by 27.2 percent, largely on account of the fall in office supplies of metal imports (43.2%) and other miscellaneous articles n.e.c which fell by 57.6 percent. (The latter “decline” arises from the improvement in the classification of items with the increased use of the new Customs software (TRIPS)).

Articles of apparel and clothing accessories increased by 18.2 percent to reach CI$18.9 million in 2015, while furniture and parts thereof grew by 9.0 percent to CI$23.1 million. In addition, the value of sanitary, plumbing, heating and lighting increased to CI$3.2 million, up from the CI$2.7 million recorded in 2014.

In 2015, imports of manufactured goods classified chiefly by materials dropped slightly by 1.2 percent to reach CI$90.7 million. Specifically, imports of non-metal minerals manufactured n.e.c decreased by 31.4 percent, and iron and steel by 13.5 percent. This performance was slightly offset by an increase in rubber manufactures (21.3%), textile yarn fabrics (14.9%) and non-ferrous materials (19.2%).

In contrast to the above categories, machinery and transport equipment saw an increase of 16.0 percent to reach CI$147.1 million in 2015. This was due primarily to the increase in motors and generators which grew from CI$2.2 million in 2014 to CI$5.2 million in 2015. Additionally, construction and mining machinery increased by 79.8 percent to reach CI$1.8 million, while office machines and automatic data equipment rose by 47.2 percent to CI$6.7 million (see Table 2.4).

Imports of road vehicles grew slightly to $50.2 million, up from the CI$49.4 million recorded in 2014, while electrical machinery and apparatus, appliances and parts grew by
93.3 percent to CI$39.1 million in 2015.

In contrast, the telecommunications and sounds, recordings and reproducing apparatus and equipment category fell by 17.6 percent, largely on account of the 22.7 percent fall in telecommunications, tv and radio equipment.

In 2015, imported food and live animals recorded an increase of 2.8 percent, to reach CI$166.3 million. Specifically, growth was recorded for vegetables and fruits (6.2%), dairy products and eggs (6.0%), cereal and cereal preparations (8.7%). On the other hand, meat and meat preparations, fish and fish preparations, and feeding stuff for animals fell by 5.1 percent, 2.0 percent, and 34.7 percent respectively.

The crude materials, inedible except fuels category grew by 11.0 percent to CI$12.5 million. This was on account of the increased imports of cork and wood (24.2%), and crude fertilizers and minerals (10.5%). However, a 7.3 percent decline was recorded for the imports of crude animal and vegetable materials n.e.c.

In 2015, a sharp increase in the value of imports via the courier and air terminal (10.9%) and non-monetary gold (76.7%) accounted for the 11.9 percent rise in commodities and transactions n.e.c. category. Additionally, imports via the postal services grew by 7.7 percent, while the special items not classified elsewhere fell by 36.6 percent.

Imports by country of origin
The United States (US) continues to be the dominant trading partner of the Cayman
Islands accounting for 85.3 percent of total imports with a value of CI$650.7 million in
2015, compared to CI$746.9 million in 2014, a 12.9 percent decline. This is traced mainly to the fall in fuel prices. Imports from the United Kingdom, Korea and Cuba also fell by 11.5 percent, 60.9 percent and 17.1 percent respectively.

On the other hand, imports from other countries increased, notably Jamaica (21.2%) and
Japan (67.8%) which may be associated with the increase in road vehicle imports.

Imports by broad economic category
Analysis of imports by broad economic category (BEC) reveals sharp growth in capital goods (17.1%) and unclassified goods (9.1%). Intermediate goods and passenger vehicles grew at a slower pace of 0.34 percent and 0.42 percent respectively. In contrast, a sharp decline of 40.1 percent was recorded in motor fuels, while consumption goods fell moderately by 2.2 percent respectively.

3.3 Exports

In 2015, total exports fell by 22.7 percent to CI$16.9 million compared to the CI$21.9 million recorded in 2014. The sharp decline is traced to the “commodities and transactions not elsewhere classified” category (primarily of re-exports) which accounted for 72.7 percent of recorded exports.

2015 TRADE TABLES

 

 

Consumer Price Index Report March 2016