Gold sales to UAE carry exports in September

Gold sales to UAE carry exports in September

Gold sales to UAE carry exports in September

A shop owner welcomes customers into the jewellery store in Dubai. Turkey’s gold sales to UAE soared last month. REUTERS Photo

Turkey’s exports increased by 21 percent year-on-year reaching $13 billion in September, thanks to a striking rise in gold sales mainly to the United Arab Emirates (UAE), which helped to ease the foreign trade deficit.

Overall imports were down by 6.4 percent to $19.8 billion compared to September 2011, decreasing the deficit by 34.7 percent from $10.4 billion to $6.8 billion, according to official data released yesterday by the Turkish Statistical Institute (TÜİK).

Main partner for exports

“In September 2012, the main partner country for exports was UAE with $1,394 million ($1,144 million of gold for non-monetary export purposes),” TÜİK said in a press release.

“In particular, the gold exports to the UAE this month and last month - and Iran in previous months - continue to support the overall export performance of the country,” said Özgür Altuğ, the chief economist at BGC Partners, in a note to investors yesterday.

Precious stones and metals imports including gold plunged from nearly $1.5 billion September 2011 to $482 million last month, while exports hit $1.6 billion.

“The precious stones and precious metals chapter, which includes the gold trade, contributed significantly to the foreign trade performance. The fact that the ratio of export increases has fallen to 3.2 percent - from 13.7 percent in the first nine months when this chapter is excluded - shows that the increase in overall exports is not structural and indicates that it stems from the special case of gold exports,” the Vakıfbank Economic Research Unit said in a note on export data.

However, Economy Minister Zafer Çağlayan disputed this view in a written statement. “The increase in exports does not result only from a rise in exports of a few goods. Both market and export goods diversification has enabled this result,” he said.

Exports over the last 12 months amounted to $148.5 billion, while imports surpassed $235 billion. The government’s export target for this year is $149.5 billion.

Exports in the first nine months increased 13.7 percent to $113 billion year-on-year. The foreign trade deficit reached $63.5 billion, posting a 23 percent year-on-year decline in the same period.

The monthly export-import coverage ratio in September was 65 percent, against 69 percent in August and 62 percent in July.