Emirates' world trade set to grow despite regional unrest

UAE exporters and importers are more cautious about the trade outlook after recent instability in the Middle East and North Africa.

Non-oil trade increased by an annual 22 per cent in January to Dh70.2 billion, the Federal Customs Authority said yesterday.

UAE global trade is expected to grow by 20 per cent this year, according to the Minister of Foreign Trade, despite regional unrest elsewhere rattling traders' confidence.
Sheikha Lubna Al Qasimi said positive business sentiment in India boded well for the UAE because it was the country's number one trade partner.
The Minister's comments follow the UAE's slide from second to sixth place in HSBC's latest biannual trade confidence index, released yesterday.
The survey asks exporters and importers in 21 markets their views about the outlook for trade over the next six months.
Deepening concerns about buyers defaulting on payments and suppliers not honouring trade agreements soured traders' sentiment in the country. Such risks have increased in the region as trade faces disruption from instability in some economies.
"These are two key drivers outside the control of traders," said Kersi Patel, the regional head of trade and supply chain at HSBC Middle East. "If you exclude these factors, UAE sentiment is among the highest in the world."
Non-oil trade increased by an annual 22 per cent in January to Dh70.2 billion (US$19.11bn), the Federal Customs Authority said yesterday. Oil trade, which accounts for about 45 per cent of the country's total export revenue, has been sustained by recent increases in crude production and higher prices.
A total of 85 per cent of UAE respondents in HSBC's survey said they expected trade volumes to increase or stay at the same levels in the next six months.
Overall, trade confidence across the Middle East and North Africa (Mena) region was higher than Asia, the Americas and Europe within the index.
Saudi Arabian traders reported the world's highest increase in confidence as the country jumped from seventh to second place in the index. Government regulations and the positive impact of global exchange rates helped lift sentiment in the kingdom, according to the survey.
"Energy exports out of Mena contribute a significant amount to GDP in many countries around the region, and with the oil price remaining high, purchasing power and infrastructure spend is expected to remain strong in the medium term," said Tim Reid, the Mena head of commercial banking at HSBC.
Sentiment in Egypt was the third lowest. A total of 70 per cent of the country's traders expected volumes to stay the same or increase in the next six months.
Business activity in the country is picking up after being hampered by a revolution that swept aside Hosni Mubarak, the former president, in February.
But the survey revealed Mena traders were more concerned about buyer and supplier risks than those elsewhere. A total of 37 per cent of respondents said they anticipated the risk of buyers defaulting on payments to rise, with 41 per cent expecting an increase in the number of suppliers unable to meet their arrangements.
As a result, more firms were opting to use trade finance to secure deals. A total of 66 per cent of traders said they were covering their risks through either bank trade finance products or export credit insurance.
HSBC has doubled the amount of financing it provided to exporters in the first quarter of the year compared with the same quarter last year, said Mr Patel. In the UAE, its financing has risen by 150 per cent over the same period, he said.
Globally, Indian traders were the most optimistic, with the country leading the survey. Malaysia ranked bottom.
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