Terms of trade (ToT)represents the ratio between a country’s export prices and its import prices. Ratio is calculated by dividing the price of the exports by the price of the imports, usually in percentage terms.
What ToT does not reflect however, is the level of economic activities. For example, if the price of Crude oil (Nigeria’s main export commodity) increased and the prices of Nigeria’s import remains same or did not increase at same rate as price of Crude oil, then Nigeria’s Terms of trade will be positive despite the absence of increased economic activities and vice versa.
Highlights of Commodity Price Indices and Terms of Trade as at end of March 2019 as released by the National Bureau of Statistics (NBS).
- All commodity group import index decreased by -0.46% due to the fall in prices of live animals; animal products, products of chemical and Allied industries, and wood and articles of wood, wood charcoal
- Commodity group export price index rose by 1.85% due to increases in the prices of Animal and vegetable fats and oils.
- The All products terms of trade (TOT) index increased by 2.30% due to increases in prices of Animal and vegetable fats and oils and other cleavage products
- All region group export index rose by 1.85% due to rise in export prices to Asia and America.
- The All region group import index fell by -0.46% due to declines in import prices across all Regions.
- And The All region terms of trade increased by 2.30% due to increased export prices to and Asia and America.
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