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New Saudi bid to turn around sliding non-oil trade

A credit insurance deal with an affiliate of petrochemicals company Tasnee could boost Saudi non-oil exports Tasnee
A credit insurance deal with an affiliate of petrochemicals company Tasnee could boost Saudi non-oil exports

Saudi Arabian non-oil trade exports, which have declined in the wake of oil production cuts, could get a boost via a credit insurance deal agreed this week with an affiliate of petrochemicals company National Industrialization Co (Tasnee). 

The initiative, provided by the Saudi Export-Import Bank (Saudi EXIM Bank) through Evonik Tasnee Marketing, protects against the risk of non-payment by international buyers, an issue which has held some Saudi exporters back. 

Evonik Tasnee Marketing is a subsidiary of Tasnee, Saudi Arabia’s second largest industrial company and one of 30 Saudi-listed companies included in the MSCI emerging markets index.

Saudi EXIM CEO Saad Alkhalb said the deal will help “drive the growth of Saudi non-oil exports across world markets”, according to the Saudi Press Agency. 

The government established the bank in 2019 to help with its Vision 2030 policy of diversification away from oil income.

Non-oil exports in June, including re-exports, amounted to SAR16.9 billion ($4.5 billion), a year-on-year decline of 45 percent and their lowest monthly level in a year, according to the latest data published by the General Authority for Statistics.  

Total exports were down 39 percent on the year at SAR88.8 billion, mainly as a result of a 38 percent fall of the value of oil exports to SAR71.9 billion, though the share of oil exports rose year on year from 79 percent to 81 percent. 

In June, Opec+ – the Organization of the Petroleum Exporting Countries plus allies led by Russia – agreed to limit supply into next year, while Saudi Arabia said this week it is likely to continue its voluntary production cut for a third month into October. 

China continues to be Saudi Arabia’s top export market, at 15 percent of total exports, worth SAR13.7 billion, followed by South Korea, India, Japan, the US, UAE, Egypt, Malaysia, France and Singapore.

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