Jamaica spent the majority or 92 per cent of its income from exports paying for oil imports in the first eleven months of last year, according to the latest trade data from the Statistical Institute of Jamaica.

Oil, whose continuous spiral on the world market has pushed prices as high as US$112 per barrel this week, remains the biggest drain on resources and largest contributor to the negative trade gap between Jamaica and its trading partners, accounting for 30 per cent of total imports.

Jamaica buys oil at cheaper prices, largely from OPEC member Venezuela, but still its fuel bill has climbed higher to $1.79 billion at November 2007, already outstripping spend for the entire calendar year of 2006 by more than US$152 million.

Jamaica's state refinery Petro-jam has said it is constrained by a confidentiality agreement not to publicise the price at which it buys under the PetroCaribe facility.

However, OPEC's reference oil price is currently running about US$101 per barrel.

Total export earnings topped US$1.94 billion in the eleven months to November 2007 but while this was a US$132 million improvement on the similar period in 2006, the inflows were insufficient to narrow the gap with imports.

Alumina and bauxite, which fall under the heading of traditional exports, contributed the largest portion of income from goods traded overseas. Bank of Jamaica's balance of payments data for October 2007, shows alumina/bauxite earnings cresting US$1 billion in the first 10 months of the year.

Imports triple exports

The value of goods procured from overseas also grew by US$660 million in the period to US$5.9 billion, placing the deficit at US$3.96 billion.

Essentially, imports now more than triple exports. At November 2007, for every export dollar earned, Jamaica spent $3.04 on foreign purchases, up from $2.88 per export dollar at November 2006 - representing a 15 per cent widening of the trade gap.

Other big ticket spending items last year were machinery and equipment on which companies spent US$1.16 billion, chemicals US$787 million and manufactured goods US$696 million, all reflecting increases in spend.

Jamaica's food bill also rose by US$91 million or 16 per cent to US$662 million.

business@gleanerjm.com