COMCEC Trade Outlook 2019
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2. MERCHANDISE TRADE BETWEEN OIC AND THE WORLD
As indicated in the Figure 8 below, the total OIC exports which have been on a downward trend
since 2012 contracted severely in 2015 and 2016. However, in 2018 total OIC exports recorded
an increase and amount to 2 trillion USD. Compared to the previous year (2017), the total OIC
exports increased 22 per cent. Meanwhile total OIC imports increased 4 per cent in 2018. It was
1.7 trillion USD in 2017 and amounted to 1.77 trillion USD in 2018.
Figure 8: Total OIC Exports and Imports
Source: IMF Direction of Trade Statistics
Several factors accounted for the strong performance in total OIC exports in 2018 including the
revival of global economic activity and rising commodity prices. On the other hand, ongoing
political developments in many countries in the Middle East constrain further increases in the
OIC trade. Rising commodity prices, in particular oil prices led to increased export revenues of
resource based countries which in turn resulted in more import demand.
Growth performance and rebalancing of Chinese economy away from manufacturing and
investment to services and consumption being the main export market for OIC countries is
particularly important as further slowdown in Chinese growth might have negative implications
on OIC exports. Chinese economy maintained a remarkable growth by growing 10.3 per cent
annually between 2000 and 2010 which led the surge in commodity prices in 2000s. However
the pace of growth has slowed down since 2011 and recorded as 6.9 per cent in 2017. It is
estimated to be slowing further in the coming years9. This could have negative spillovers on OIC
exports via downward pressure on commodity prices and lower import demand.
Commodity prices, in particular fuels, declined sharply starting from July 2014. Oil prices almost
halved from 96.2 USD per barrel in 2014 to 50.8 USD per barrel in 2015 mainly due to the shale
oil production in US and oversupply in global oil markets. Although oil prices bottomed out 30.8
USD per barrel in January 2016, they averaged 42.8 USD per barrel in 2016. Oil prices were on
an increasing trend between August 2017-November. OPEC and non-OPEC oil exporters
including Azerbaijan, Kazakhstan and Russian Federation agreed to curb oil production from
January 2017 to March 2018 to 1.8 million barrels per day.10 They had further agreed to extend
9 IMF WEO April 2018 Database.
10 UN World Economic Situation and Prospects, 2018
0.0
0.5
1.0
1.5
2.0
2.5
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Trillion USD
OIC Merchandise Exports OIC Merchandise Imports