*Export earnings decline in first half of 2016/ EIU 21.09.16*

Event



According to new figures from the Central Bank of Sudan (CBS), total export
earnings in the first half of 2016 were US$1.5bn, down from US$1.8bn in the
year-earlier period.



Analysis



Sudan's two largest sources of export earnings in the first half of the
year were gold and livestock. Of Sudan's total export earnings in this
period, just over half were from exports to the Middle East, with Africa
and Asia respectively the next largest destinations for Sudanese exports.
Earnings from gold exports over the period were US$419.6m from 10.6 tonnes,
compared with US$465.3m from 12.1 tonnes in the first half of 2015.
Livestock export earnings were broadly steady, at US$417.6m (US$410.4m in
the first half of 2015). The main factor behind the fall in export earnings
has been the declines in prices for sesame and crude oil. Earnings from
sesame exports fell from US$305m in the first half of last year to just
US$164.7m in January-June 2016, despite a slight increase in the export
volumes (up from 187,000 tonnes to 197,000 tonnes).



Meanwhile, earnings from crude oil exports in the first half of this year
were US$146.4m, from 4.1m barrels of oil (equivalent to 22,600
barrels/day), compared with US$252.8m from 4.9m barrels in the first half
of last year. The reduction is primarily the result of lower average oil
prices, but probably also reflects greater consumption of oil domestically.



Sudan's earnings from the export of South Sudanese oil are not detailed.
The authorities have not published any data on this for many months, but in
the past the exports have brought in at least US$50m a month—and usually
nearer to US$100m—to Sudan. Earlier this year the two governments indicated
that they had agreed a temporary reduction in the fee arrangements, but
this is unlikely to have brought Sudan's earnings below US$50m a month.



Impact on the forecast



We will update our trade figures with the latest CBS data. However, they
are in line with our existing projections of only muted hydrocarbons and
gold revenue, and we continue to expect Sudan to run a substantial trade
deficit throughout the forecast period.

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