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Imports & Exports: The Advantages of Utilizing Trade Data

 

Trade analysis will play a key role in strategic decision-making as international tensions increase and tariff activity increases.Import export data analysis can provide key insights into domestic and international markets that will help you make better business decisions.Trade data can show you the dynamics of product supply chains, domestic demand and recent shifts in raw material movement between countries.

Consumption apparent

Import export data analysis can be used to estimate local demand in certain goods and services when there are no estimates for their production.This is called apparent consumption. It takes into consideration the country's production and its exports.


Applicable Consumption = Domestic Production + Exports + Imports

According to the UN Food and Agriculture Organization, Canada produced 8.7 million tonnes of barley in 2016.It also exported 1.2million metric tonnes of barley, and imported less that 0.1 million.Accordingly, Canada's apparent barley consumption can be assumed to be around 7.5 million metric tonnes.

This analysis is sensitive to errors in reporting, both for domestic production via government sources as well as trade data.It can be a useful starting point to estimate the demand for a product in a particular country.

Supply chain insights

Inputs from other countries often go into the final product.Trade analysis is a way to determine the flow of raw materials and inputs across countries and identify the countries that provide the bulk material for production.

Trade analysis, for example, can be used to identify the sources of materials and how they are valued by different countries.There may be a correlation between raw material flow into a country and exports of finished goods or intermediate parts from that country.Data from different regions could provide further insight into the top exporters of certain goods and help to inform future strategies for acquiring raw or intermediate materials.

Sources of data that report both volume and value exports may provide some insight into the general export prices for different countries.According to the US International Trade Commission, 48 million kilograms (or $28 million) of soybean seed were exported by the United States to Canada in 2017.These metrics can be used to estimate a rough export price for soybean seed of $0.60 per kg.These estimates are estimates for the entire measured HS code. Any reporting errors during trade flow will affect estimates. Users who attempt these measures should be aware.

Trends over time

Import Export Data are useful in examining how trade policies affect the regional and global flow of goods, especially in an age of increasing trade tensions.Trade data can reveal how different industries use production inputs.

Changes in production capacity over time could lead to a decrease in exports from the region to the rest of the world.Many industries rely on key components sourced from around the world for their production processes. Trends in trade behavior in these countries may indicate the need to reevaluate the source.

Caveats            

When interpreting and analyzing trade database reports, users should be aware of several possible caveats.For example, it is possible for shipments to be tracked under a single HS code even though they contain multiple products.Because it would include extraneous goods, this would lead to an overestimation of the amount of trade that occurred for the good in question.These extra goods would not be included in trade flows and could lead to underestimating the amount of trade between countries.There are several methods that can be used to detect discrepancies.

  • To identify overestimated flows, compare exports with production data for a country.
  • Primary research with market players to determine the average share of manufactured goods that are traded
  • Use volume and value estimates to approximate export price. Compare with known or suspected average prices for goods

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