Business News of 2013-12-05

Drop in gold prices reduce Ghana’s earnings

The plunge in the global price of gold has led to a significant reduction of revenue from exports of the precious metal this year, for the country.

It is expected revenue from gold exports will continue to reduce further as gold prices on the international market continue to tumble.

Gold, cocoa, and oil are the top three export revenue earners for Ghana.

With the exception of oil, gold and cocoa saw a drop in earnings in the first ten months of this year.

According to data from the Bank of Ghana, for the first ten months of this year earnings from gold fell by 12.0 percent to US$4.2 billion, while exports of cocoa beans also declined by 33.5 percent to US$1.3 billion partly reflecting a decline in the prices of the commodities.

Oil exports, however, increased by 30.9 percent to US$3.2 billion, as a result of increased production.

Commodity prices are expected to remain low on the international markets during the fourth quarter of 2013 while crude oil prices are forecast to average $107 per barrel at the end of 2013.

A bearish outlook for gold is expected despite assurance that the US FED will keep its stimulus program unchanged for a while.

The realized price for gold has averaged $1,464 for the year to September, and is forecast to end the year around $1,306.

On the other hand, the market for cocoa beans is expected to be bullish in the fourth quarter of 2013 and expected to range between US$2,550 and US$2,710 per tonne at the end of 2013.

Meanwhile, earnings from non-traditional exports, including cocoa products, went up by 25.8 percent to US$2.2 billion.

The value of imports was unchanged at US$14.7 billion.

Oil imports went up by 0.4 per cent to US$2.9 billion, while non-oil imports declined by 0.2 per cent to US$11.8 billion within the period.

Of non-oil imports, the share of capital and intermediate goods declined to 68 percent from 70 percent in 2012, while consumption goods increased to 24 percent from 22 percent.

The trade deficit for the period therefore remained unchanged at US$3.4 billion.

In a related development the value of merchandise exports remained broadly unchanged at US$11.4 billion compared to the same period last year.