*EXPORT GROWTH OF 81%? BAFFLING….. * *By Ruma Dubey*
The July trade figure states that India’s exports for rose an annual 81% at $29.3 billion, while imports grew 51% at $40.4 billion. The trade deficit stood at $11.1 billion, widening from $7.7 billion in June. An 81% YoY rise in exports, that too at a time when global demand is sluggish? Seems completely unbelievable! And this robust growth on exports data has been coming in for the past eight months. Infact the growth over the past eight months has been over 30%. India's exports in June rose by 46.4%, while imports increased by 42.4%. That’s good. But the question which comes to mind is – when exports are doing well, how come this is not being reflected in the earnings of the companies. The Trade secretary stated today the export growth is being led by the engineering sector. Is that really so? Not just us, there are lot of FIIs and hedge fund managers questioning the very sanctity of these numbers. Their doubt stems from the discrepancy in the monthly ‘imports from India’ figures and the numbers put out by the Government of India for exports. Chinese data of imports from India show that growth is almost nil in the past eight months, with a dip in May 2011. Imports from India were at sub-40% level for January and February in countries like Indonesia, Pakistan, China, South Africa, Iran. USA is the largest trade partner of India but given the sluggish growth rate within USA itself, which countries really did help boost Indian exports? Data put out by the Govt states that with respect to engineering goods, exports of Machinery & Instruments, Iron & steel bar/rods, Residual engineering items, manufactures of metals, ferro alloys, non-ferrous metals, aluminium other than products, primary & semi-finished iron & steel and transport equipments saw robust growth. Logically, based on the sheer performance of companies, it is easy to confer that engineering showed a marginal growth, the export oriented units were not buoyant. IIP numbers themselves are an indicator and it has been showing moderation for past few months. May IIP was down at 5.6% v/s 6.3% on a MoM. April IIP was down at 6.3% compared to 8.8% on MoM. Somehow India’s manufacturing story just does not seem to match up with this stunning export performance. A look at the data at the ports also does not support these exports. From April to July 2011, on a YoY, traffic at ports has grown just 4.84%. Iron ore exports have taken a bad beating which is visible from the negative growth rate at ports of Mormugoa. Tuticorin, Mumbai and Chennai are the other ports which have shown a negative growth. We are ‘seeing’ this resounding export performance in a scenario when S&P had not yet downgraded the US. With fears of recession plaguing both US and Europe, what happens to the export numbers now? Moderation is sure or else the figures would seem all the more ‘tampered’. Yes, in this world of rampant adulteration, with the Govt seeped in corruption charges, nothing seems sacred any more; not even the data! -- EQUITY BULL -- You received this message because you are subscribed to the Google Groups ""GLOBAL SPECULATORS"" group. To post to this group, send email to [email protected]. To unsubscribe from this group, send email to [email protected]. For more options, visit this group at http://groups.google.com/group/globalspeculators?hl=en.
