All Commodity group import index increased by 1.07% between April and June, divulged by the National Bureau of Statistics (NBS)
This was driven mainly by an increase in the prices of products of the chemical and allied industries (1.40 per cent), wood and articles of wood, wood charcoal and articles (1.37 per cent) paper making material; paper and paperboard articles (1.23 per cent).
The document published by the bureau, yesterday, also said that between April and May, the import price index grew by 0.12 per cent.
This, it also explained, was due to marginal increases in the index of products of the chemical and allied industries (0.78 per cent), wood and articles of wood; wood charcoal and articles (0.72 per cent); paper making material; paper and paperboard (0.44 per cent).
‘This was offset by decreases in the prices of live animals; animal products ( -0.17 per cent), animal and vegetable fats and oils and cleavage (-0.23 per cent) and mineral products (-0.27 per cent).
‘Similarly, the all-commodity group export index increased by 0.72 per cent between April and June 2021 due, mainly, by an increase in the prices of products of the chemical and allied industries (2.54 per cent), plastic rubber and articles (0.85 per cent) and mineral products (0.74 per cent).
However, the index was negatively affected by live animals, animal products (-2.61 per cent), vehicles, aircraft and parts (-0.24 per cent) and wood and articles of wood; wood charcoal and articles (-0.23 per cent),’ the bureau, said.
The terms of trade (TOT) represent the ratio between a country’s export prices and its import prices. The ratio is calculated by dividing the price of the exports by the price of the imports, usually in percentage terms.
An increase in the terms of trade between two periods (or when TOT is greater than 100 per cent) means that the value of exports is increasing relative to the value of imports, and the country can afford more imports for the same value of exports.
For example, an increase in the price of oil between two periods (with oil production remaining the same) is likely to increase or improve the terms of trade for Nigeria and vice versa.
The TOT is recorded as an index and can be used as an indicator of an economy’s health.
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