India's iron ore export to China falls, decreases bilateral trade
Benefiting from the production crunch of iron ore in India, South Africa has replaced China's neighbour as the third biggest supplier of the mineral after Australia and Brazil, latest statistics revealed on Monday.
South Africa provided 40.6 million tonnes in 2012, up by 12% compared to 2011, while Indian imports declined 54.74% to 33 million tonnes last year.
This also contributed to the decrease in overall trade between India and China, putting a question mark on whether bilateral trade will hit the coveted $100 billion mark by 2015.
China, the largest consumer of iron ore in the world, imported a record of 743.6 million tonnes of iron ore in 2012, up 8.4% in the year.
Trade between the India and China declined by 10.1% to $66.47 billion last year.
According to the figures released by the Chinese customs and commerce ministry, India's trade deficit mounted to $28.87 billion due to steady decline of export of iron ore, agency reports said.
The deficit grew by $1.79 billion compared to 2011, it showed. The bilateral trade touched $61.74 billion in 2010 posting a high growth at 42.66% followed by 19.71% in 2011 with $73.9 billion.
This is the first time in recent years the bilateral trade registered negative growth, which according to officials was in consistent with the decline in global trade.
Indian exports to China declined by 19.6% to $18.8 billion last year compared $23.41 billion in 2011 and $20.86 billion in 2010.
China's exports to India also declined by 5.7% to $47.67, the data showed.
China's exports touched $50.49 billion in 2011 from 40.88 billion in 2010.
In the iron ore sector, supplies from India amounted to 10.6% of China's total imports in 2011, but were already disrupted by a mining ban in Karnataka, India's biggest iron ore producing state, Reuters reported.
India's share of total imports of the mineral to China has been in steady decline for several years, falling from 23% in 2006 to just 4.4% last year.
The biggest beneficiary of the Indian supply crunch has been Australia, China's top supplier of iron ore by far. It delivered 351.5 million tonnes, or 47% of China's total imports over the year, up from 43% in 2011.
India's ranking has plunged throughout the second half of the year, with monthly shipments eventually falling behind the likes of Mauritania, North Korea and Finland to come in at 20th place in December.
"I think India can recover to some extent -- they are going through a process of cleaning up illegal operations and eventually it will get back on line, but it will be at severely reduced volumes relative to where they were historically," Graeme Train, commodities analyst with Macquarie in Shanghai told Reuters.