Export prices rose faster than import prices in the second quarter of 2026, but the country’s terms of trade weakened marginally, underscoring continued pressure on its external trade position.
According to the National Statistics Bureau’s (NSB) Export and Import Price Index, export prices rose 5.48 percent year-on-year, compared with a 4.19 percent increase in import prices. However, the terms of trade edged down to 94.45 from 94.57 in the previous quarter, highlighting that stronger export prices have yet to translate into an improvement in Bhutan’s trading position.
Export prices increase 5.48 percent
The overall Export Price Index recorded a 5.48 percent year-on-year increase in the second quarter. The strongest increase was recorded in the mineral products, cement and electricity category, where export prices rose by 11.65 percent compared with the same quarter last year.
Prices of wood, pulp and paper products increased by 3.91 percent, while food and beverages recorded a 3.73 percent increase. However, not all export categories recorded price increases. Likewise, prices of chemicals, plastics, textiles and apparel declined sharply by 16.74 percent, while base metals and other manufactured goods fell by 1.06 percent.
On a quarter-on-quarter basis, export prices increased by 3.38 percent in the second quarter. The main driver of the quarterly increase was the mineral products, cement and electricity category, which recorded a 6.43 percent increase.
Food and beverage prices, however, declined by 2.06 percent, while wood, pulp and paper prices fell by 7.73 percent during the quarter.
The upward movement in export prices, particularly for mineral products, cement and electricity, is significant for Bhutan given the importance of electricity and resource-based products in the country’s export earnings.
Import prices also rise
The Import Price Index increased by 4.19 percent year-on-year in the second quarter of 2026. Several major import categories recorded substantial price increases. Prices of metals and metal articles increased by 21.87 percent, followed by wood, pulp and paper which rose by 19.63 percent.
Prices of chemicals, plastics, textiles and apparel increased by 14.70 percent, while machinery, appliances and other manufactured goods rose by 1.16 percent.
Food and beverage import prices were the only major category to record a significant decline, falling by 17.05 percent compared with the second quarter of 2025. On a quarterly basis, import prices increased by 3.51 percent.
The largest quarter-on-quarter increase was recorded in metals and metal articles, at 5.81 percent. Food and beverages rose by 4.03 percent, transport equipment by 2.85 percent, mineral products, cement and electricity by 2.82 percent, and machinery, appliances and other manufactured goods by 2.24 percent.
Terms of trade remain under pressure
Despite export prices increasing by more than import prices on a year-on-year basis, Bhutan’s terms of trade declined marginally during the second quarter. The index fell from 94.57 in the first quarter to 94.45, a decline of 0.12 points.
The terms of trade measures the relative prices of a country’s exports compared with the prices it pays for imports. A higher terms-of-trade position generally means a country can obtain more imports for a given quantity of exports, while a decline indicates that the purchasing power of exports against imports has weakened.
The NSB data show that Bhutan’s terms of trade stood at 93.04 in June 2024, rising to 94.57 by March 2026 before edging down to 94.45 in June 2026.
Despite the quarterly decline, the index remained 1.51 percent higher than in the first quarter of 2025.
Trade pressures remain significant
The latest price index comes amid continued pressure on Bhutan’s external trade position. While higher export prices can support export earnings, the simultaneous rise in import prices means businesses and consumers continue to face higher costs for goods sourced from abroad.
This is particularly relevant for an economy where imports include machinery, equipment, metals, manufactured goods and other inputs required for investment and production.
The data also show that the movement in Bhutan’s export and import prices remains uneven across product categories. Stronger prices for mineral products, cement and electricity supported the export price index, while significant increases in import prices for metals, wood products and chemicals contributed to higher import costs.
For Bhutan, the key challenge will be to strengthen the value and competitiveness of its exports while reducing excessive dependence on imported goods and production inputs.
The second-quarter figures therefore present a mixed external trade picture: export prices are rising, but import costs are also increasing, leaving Bhutan’s terms of trade broadly stable but slightly weaker than in the previous quarter.
Tashi Namgyal, Thimphu
