COMCEC Trade Outlook 2016
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6. CONCLUSION
World trade in US dollars fell sharply by 13 per cent to 16.5 trillion US dollars in 2015 down
from 19 trillion US dollars in 2014. Despite the sharp decline in dollar value of world trade, the
volume of world trade (accounted for changes in prices and exchange rates) continued to grow
by 2.8 per cent in 2015. It should be noted however that world trade volume growth has
remained weak since the global crisis.
World trade slowdown in 2015 was attributed to several factors including protracted weak
global demand, falling commodity prices and China’s shift to a new growth model. Demand was
especially weak in emerging economies. Moreover, strengthening dollar and falling prices for
commodities were among other factors that contributed to the weakness in world trade in 2015
(IMF WEO, 2016). Besides these cyclical factors, some structural factors such as maturation of
global value chains and slower pace of liberalization also accounted for the sluggish world trade
growth.
Growth prospect in China in particular is crucial as China being ranked first among the major
export markets for OIC countries. China's demand for commodities was also an important
deriver of prices of many commodities besides oil as China emerged as a key importer for many
commodities in the last decade.
Total OIC exports remained subdued around 2.2 trillion dollars between 2012 and 2014.
However, total OIC exports fell by 24.8 per cent to USD 1.6 trillion in 2015. On the other hand
total OIC imports fell by 8.6 per cent to USD 1.8 trillion in 2015. Thus total OIC exports’ share in
world exports declined to 9.8 per cent in 2015.
Several factors accounted for the decline in total OIC exports in 2015 including the sluggish pace
of world demand growth especially in emerging Asia, the sharp fall in commodity prices in
particular the plunge in oil prices, exchange rate fluctuations and ongoing political transition in
many countries in Middle East.
The share of intra-OIC trade in total trade has remained roughly constant between 2012 and
2014 averaging 18.5 per cent. The share of intra-OIC trade increased to 20.0 per cent in 2015.
The ratio of intra-OIC trade to total trade stayed above 20 per cent target level in 30 member
states this year.
OIC exports are dominated heavily by mineral fuels and oil; the share of this sector amounts to
47.5 per cent of total OIC exports in 2015. Commodity concentration is even more apparent
when countries examined specifically. Petroleumwas the main exported item in many members
ranging between 51 to 100 per cent of total exports. Yet some other member states heavily
depend on specific primary commodities such as metalliferous ores or agricultural commodities.
Examination of export product diversification using Herfindahl index in the OIC geographic
regions yields that there a little tendency towards increasing product diversification and there
is considerable disparity in all the regions.
Market concentration of OIC exports is also high. Although OIC exports are mainly shipped to
developed countries China alone accounted for 13.2 per cent of total extra-OIC exports. The high
commodity and country concentration in total OIC trade is a major drawback as this increases