Nigeria’s all-products terms of trade for Q3 2018 rose marginally by 0.52 percent as the indices averaged 99.29 in the quarter. Correspondingly, the all- region group export index rose by 1.05 percent with a quarterly average of 101.73 owing to its surge in August.
The terms of trade (TOT) is a ratio of the price of a country’s export commodities relative to the price of its imports commodities, expressed in percentage terms. In other words, it measures the worth of a country’s exports in terms of its imports.
An increase in the terms of trade over two periods or when the value is greater than 100 percent indicates that the country receives more value for its exports than it gives for its imports. Conversely, a value lower than 100 percent indicates an unfavourable terms of trade, as the importing country has to exchange more of its product for the same value of exports.
The data which was released by the National Bureau of Statistics reported that the all-product terms of trade stood at 98.85, 99.64 and 99.37 in July, August and September of the quarter, respectively.
The slight improvement in the all-commodity terms of trade resulted from a decrease of 1.76 percent in the all-commodity group import price index owing chiefly to cheaper vegetable products and an increase of 1.26 percent in the all- commodity group export price index which was driven by prices of foodstuffs, beverages, spirits, tobacco and some products.
Similarly, advances in the all-region group export index which rose by 1.05 percent following improved trade with Asia raised the all- region terms of trade marginally by 0.10 percent, although the all-region group import index rose in the same period by 1.22 percent
The all region terms of trade surged 5.71 percent from 99.9 in July to 105.6 in August while the index nosedived to 99.7 in September, a decline of 5.59 percent from August.
Nigeria’s largest trading partners for the quarter were India, China, Spain, France, and the Netherlands, with crude petroleum and natural gas, both primary products as Nigeria’s main export while motor spirit (ordinary) and motorcycles accounted for the bulk of Nigeria’s imports.