January 2013 International Trade

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January exports of $184.5 billion and imports of $228.9 billion resulted in a goods and services deficit of $44.4 billion, up from $38.1 billion in December (revised). January exports were $2.2 billion less than December exports of $186.6 billion. January imports were $4.1 billion more than December imports of $224.8 billion.

Interestingly, exports to the United States as a percentage of total Chinese exports has fallen to an all-time low. This calls into question the argument that the United States is pulling the rest of the world out of recession.

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Exports of pulp, paper and paperboard declined by 169,000 tons (6.1 percent). Imports, meanwhile, rose by 57,000 tons (8.1 percent). Exports were 104,000 tons (3.9 percent) lower than a year earlier while imports were up by 22,000 tons (3.0 percent).

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U.S. pulp exports to China were nearly an order of magnitude larger than exports to the second-largest country in the list above (i.e., Mexico), 6.7 percent lower than January 2012. Asia was the destination for over three-fourths of U.S. pulp exports in January, with the rest of North America running a distant second.

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Paper and paperboard exports were somewhat more evenly split; the combination of Mexico and Canada received nearly one-half of U.S. exports, while Asia (especially India and Japan) was the destination for just over one-quarter.

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Canada supplied over two-thirds of pulp imports into the United States, followed distantly by Brazil.

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Pegging nearly 90 percent, Canada absolutely dominates paper and paperboard imports into the United States.

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Softwood lumber exports fell by 15 MMBF (9.9 percent) in January while imports added 53 MMBF (7.2 percent). Exports were just 5 MMBF (3.8 percent) above year-earlier levels; imports were 114 MMBF (16.8 percent) higher.

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North America (Canada and Mexico), followed by Asia (especially China and Japan), continue to be the primary destinations for U.S. softwood lumber exports. Although relatively small by comparison, exports to Jamaica jumped significantly relative to the same month in 2012. Meanwhile, Canada is far-and-away the largest source of softwood lumber imports into the United States. Imports from Sweden also increased substantially in January relative to a year earlier.

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One-half of U.S. softwood lumber exports left the country through West Coast (especially Seattle, WA) customs districts in January. At the same time, however, Great Lakes customs districts (especially Duluth, MN) have handled most of the softwood lumber imports coming into the United States.

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Douglas-fir made up nearly one-quarter of all softwood lumber exports in January, followed by southern yellow pine.

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On a global scale, data compiled by the Netherlands Bureau for Economic Policy Analysis showed that world trade volume decreased by 0.5 percent in December while prices rose by 0.8 percent.

The foregoing comments represent the general economic views and analysis of Delphi Advisors, and are provided solely for the purpose of information, instruction and discourse. They do not constitute a solicitation or recommendation regarding any investment.