TIRANA, March 29 – Albania’s exports continued suffering even last February as international oil and base metal prices stood at record low.
Data published by the country’s exports of “minerals, fuel and electricity” hit a seven-year low of 4.4 million lek (€31 mln) in the first two months of this year as international oil prices hit a 12-year low of below $30 a barrel. Heavy rains also allowed the country’s state-run power corporation to resume electricity exports and collect about €1.4 million last February.
Prospects appear more optimistic as international oil prices have currently recovered to about $40 a barrel compared to a 12-year low of $27 last January and around $110 a barrel from 2010 until mid-2014 when they embarked on a downward trend.
Both oil and base metal prices at record lows have considerably affected exports, domestic production and government revenue, also leaving hundreds of oil and mining workers jobless.
The slump in oil prices has also affected major oil producers with Canada-based Bankers Petroleum signing a preliminary deal with China’s Geo-Jade Petroleum Corporation to sell its major Albania assets and a newly acquired minor oil block in Hungary for a reported C$575 million (€392 mln).
The situation has been reflected in a drastic cut in chromium exports to China and iron exports to Turkey after the country’s largest steelmaker, Turkey’s Kurum, recently initiated bankruptcy proceedings.
Exports of garment and footwear products are compensating for the drastic cut in oil and metal exports. Exports of this group, whose overwhelming majority of 90 percent go to top trading partner Italy, grew by an annual 19 percent to 17.3 billion lek (€123 million) in the first couple of months. The garment and footwear industry employs about 100,000 people in Albania, being one of the top private sector employers, and mainly relies on cheap labor costs and raw material imported mainly from Italy.
Albania’s trade gap widened to 42.4 billion lek (€301 mln) in the first two months of this year as exports dropped by 6.1 percent and imports rose by 3 percent.
Albania is a net importer with exports covering only about half of imports.
The poor diversification of Albania’s exports heavily relying on oil and base metals whose prices are currently at a record low is expected to have another negative impact on the country’s exports which dropped by 5 percent in 2015, returning to negative growth rates after a contraction in 2009 soon after the onset of the global financial crisis.
