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Singapore is no doubt one of the world leaders in international trade. The trading power can be seen clearly from the enormous value of what Singapore exports.
Many developed countries consider Singapore as a potential trading partner, including Australia. In this article, One IBC® will also provide a brief look at the relationship with Australia through the product that Australia imports from Singapore.
In 2020, although Covid-19 had hit the economy hard, Singapore still shipped US$374.2 billion worth of products worldwide. This is a remarkable number in such a turbulence period. If we take into account Singapore’s population of 5.77 million people, each person on this island has exported $64,900 that year. It is interesting to see a country that has a per capita income that high just from exporting alone. Undoubtedly, Singapore’s economy depends heavily upon international commerce.
Asia is the main destination for Singapore exportation
Latest data by countries shows that Singapore’s exported goods were bought by importers from China (13.8% of the global total), Hong Kong (12.4%), United States (10.7%), Malaysia (8.9%), Indonesia (5.7%), Taiwan (4.9%), Japan (4.8%), South Korea (4.5%), Thailand (3.8%), Vietnam (3.3%), Netherlands (2.7%) and India (2.5%).
From the data above, we can see that Asia is the main destination for Singapore exportation with 71.0% total value. North America meanwhile only accounted for 11.4%. Europe received another 10.6% of goods from Singapore. The rest (less than 10%) went to Oceania with Australia in the lead, South America and Africa.
Singapore is the main shipping hub of the Asia region. This is due to its well-developed infrastructure with Singapore’s port being one of the largest in the world. By having top quality services, this port attracts around 140 thousand ships annually to its 67 container harbours. Singapore sea port in 2019 handled 36.9 millions TEU of cargo. It can ship goods to 600 ports in 123 countries. The country’s infrastructure has made it a strong base of operations to conduct business with the entire world.
Singapore has signed FTAs with Australia, Japan, New Zealand, and the U.S. and is negotiating with Canada, Chile, China, India, South Korea, Jordan, and Sri Lanka. A recently signed agreement with the EU is an enormous milestone for Singapore exports. Singapore is also planning to join the Pacific Alliance (Colombia, Chile, Mexico, and Peru). This country is also a member of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). Singapore exports do not face any trade barriers in several markets due to these FTAs.
Singapore is one of the strong foundations of the world’s marine trading and a key player in the regional sea routes, especially the one between China and Central Asia, Australia and Europe. However, the Northern Sea Route initiative may threaten Singapore's power in international commerce since many countries consider this as a good alternative and the arctic shipping route is in fact 13-15 days shorter.
In 2020, these were among the top categories of product in export of Singapore:
The top 5 categories alone account for most of what Singapore exports. Gems and precious metals were the fastest in terms of growth, up by 14.5% from 2019 to 2020. This is due to a push from higher international revenues of gold. In second place, miscellaneous food preparations had an 11.5% increase in sales. Singapore’s pharmaceuticals were the third-fastest gain in value among these ten export categories, up by 10%. Overall, Singapore exportation recorded a $45.1 billion trade surplus in 2020; grew 43.8% compared to the previous year. This is an impressive achievement in such a troubled time for trading.
The Singapore-Australia Free Trade Agreement (SAFTA) is the main pillar supporting the economic relationship between Singapore and Australia. Singapore is Australia's strategic trade and investment partner in South-East Asia.
Australia mainly imports Mineral products, Chemicals, Foods and Instruments from Singapore. In 2019, imports from Singapore were valued at $8.06 billions. Among that, mineral products alone took up more than half of what Australia imported from Singapore (57.3%). The other products were:
Overall, for the top categories, what Australia imports from Singapore is relatively similar with what Singapore exports worldwide.09