Exploring economics: the secret life of t-shirts
Exploring economics: the secret life of t-shirts

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Exploring economics: the secret life of t-shirts

2.1.2 International trade figures

Another reliable source of data is trade data, which is available from the World Trade Organisation, the World Cotton Map Report, the Trade Map and the MIT Atlas websites. Trade data is often shown in nominal terms, that is, in terms of amount of money spent on the tradeable goods, and not in volume as agricultural sources. This data may be used to see which countries export the most cotton rather than those who produce the most. Often the country currency used in international websites with trade data is the US dollar ($).

Table 1 World cotton exports in 2017 $2Bn

China 15.1
United States 7.6
India 4.7
Pakistan 3.5
Vietnam 2.6
Turkey 1.7
Australia 1.6
Hong Kong 1.6
Brazil 1.5
Italy 1.4
(Source: Workman, 2019a)

In Table 1 you have observed which countries export the majority of cotton in the world in 2017. Now you are going to play with the figures, and apply some of the calculations economists use. The next box will use the proportions.

Activity 7

Table 1 shows the top ten cotton exporting countries in 2017. Use Table 1 to answer the following question: which countries are the main exporters of cotton in nominal terms?

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Discussion

China, United States and India are the top three exporters of cotton when their exports are measured in terms of US dollars made from the sale.

In the next three boxes you will have the opportunity to refresh some of the basics of how to use percentages, rounding numbers and decimals.

Maths skill 2: percentages

How can we calculate the percentage of world cotton exports that come from the United States? To do this the value of cotton exports for the US needs to be expressed as a percentage of total world cotton export which were $53.7bn in 2017 (Workman, 2019a).

From Table 1 the US cotton exports have a value of $7.6bn. The percentage of world exports produced by the USA is calculated as follows, with the answer given to one decimal place.

multiline equation row 1 US cotton exports in dollar bn postfix times divided by World cotton exports in dollar bn multiplication 100 equation left hand side equals right hand side 7.6 divided by 53.7 multiplication 100 row 2 equals 14.2 percent

Note that this percentage was calculated with both US and world exports measured in the same units, billions of dollars. If they were provided in different currencies, we would need to convert them to the same units.

Maths skill 3: rounding

Earlier you looked at decimals. Consider the following numbers:

8.1

8.13

8.13345877

Depending on how we use the numbers or the audience for which they are intended, numerical values may be expressed with more or fewer decimal places. 8.13345877 is a more precise number than 8.13. If we have a number such as 8.13345877 we may want to present something smaller. This is the issue of rounding.

When calculating the percentages in Activity 9 your calculations may result in many numbers after the decimal point. It would be useful to write these numbers more concisely, reporting to fewer decimal places. In this example we will give the percentages to 1 decimal place. The first step is to count 1 place after the decimal point then look at the next digit. If this is 5 or above the preceding digit will be rounded up, if it is below 5 the preceding number will remain the same. For example: 5.41 becomes 5.4, 1.67 is rounded to 1.7 while 10.05 is rounded to 10.0

Activity 8

The following table is an extract from a data source showing the percentages of world exports accounted for by the top 10 cotton exporting countries. Using the figures in Table 1 and a total value of world exports of $53.7bn complete the table by calculating the percentages that are missing.

China 28.2%
United States 14.2%
India
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Pakistan
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Vietnam 4.9%
Turkey
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Australia 3.0%
Hong Kong 3.0%
Brazil
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Italy 2.7%
Words: 0
(Source: Workman, 2019a)
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Discussion

India’s exports are $4.7bn. As a share of world exports:

4.7 divided by 53.7 multiplication 100 equals 8.8 percent

Pakistan’s exports are $3.5bn:

3.5 divided by 53.7 multiplication 100 equals 6.5 percent

Brazil’s cotton exports are 1.5$bn:

1.5 divided by 53.7 multiplication 100 equals 2.8 percent

Turkey’s exports are 1.7$bn

1.7 divided by 53.7 multiplication 100 equals 3.2 percent

Table 2

China 28.2%
United States 14.2%
India 8.8%
Pakistan 6.5%
Vietnam 4.9%
Turkey 3.2%
Australia 3.0%
Hong Kong 3.0%
Brazil 2.8%
Italy 2.7%
(Source: Workman, 2019a)

Notes on the table:

Care should be taken when reading figures from a table. Sometimes figures do not always piece together as they should due to rounding. For example if you were to calculate the percentage of world cotton exports accounted for by China:

15.1 divided by 53.7 multiplication 100 equals 28.1 percent

This answer differs from the 28.2% shown in the table. This discrepancy is likely to have arisen due to rounding. The figures used in the calculation in the original data source may have had more decimal places. For example:

15.12 divided by 53.71 multiplication 100 equals 28.15 percent

Which we can round up to 28.2%. It is for this reason that sometimes in a table of percentages you will notice that all the figures may not add exactly up to 100.

Maths skill 4: decimals

Every day we deal with whole numbers or ‘integers’ such as 274 without thinking about the number in detail or what it means. How is this number made up? 274 is formed of three components.

200 + 70 + 4.

That is, there are 2 hundreds, 7 tens and 4 single units.

We can go on to consider bigger numbers such as 4274 where the 4 refers to four thousands.

In addition to integers or whole numbers we can also use parts of I unit. To show this we use a decimal point. To the right of the decimal point the numbers are a fraction of a whole number.

The first place to the right of the decimal point shows how many tenths the number has. So for example, 274.6 is the whole number 274 plus 6 tenths or 6/10.

As we move further to the right of the decimal point the numbers represent smaller parts of a whole number, measuring in hundredths, thousandths and so on.

For example:

274.68 would be 274 plus 6 tenths and 8 hundredths.

Activity 9

Write the following as decimals:

2 and 1 tenth

222 and 5/10

1465 and 7 tenths

364 plus 3/10 plus 7/100

98 plus 6/10 plus 2/100 plus 9 thousandths.

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Answer

2.1

222.5

1465.7

364.37

98.629

Break down the following numbers into integers, tens, hundredths and thousands:

3.987

6.405

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Answer

3.987 = 3 + 9 tenths + 8 hundredths and 7 thousandths.

6.405= 6 + 4 tenths + 0 hundredths and 7 thousandths.

Note that even though there are no hundredths in the number we still need to include 0 to note its place.

Maths skill 5: adding decimals

Step 1: line the numbers under each other so that the decimal points are aligned.

Step 2: carry out addition in the normal way by adding up each column.

Step 3: put the decimal point in the answer in the same position as the numbers above.

For example: Italy produces 2.7% of world exports and Turkey 3.2%. Together they export 5.9% of world exports.

multiline equation line 1 2.7 line 2 plus 3.2 ̲ line 3 5.9

Starting from the right: 2 and 7 are 9, 3 and 2 are 5. Answer = 5.9.

Activity 10

Using Table 2 and without using a calculator answer the following questions:

What is the percentage of world cotton exports provided by Pakistan and Turkey?

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Answer

6.5 percent prefix plus of 3.2 percent equals 9.7 percent

What percentage of world cotton exports from China, US and India account for all together?

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Answer

The percentage of world exports accounted for by each country are China 28.2 %, United States 14.2% and India 8.8%. Therefore together their cotton exports constitute 51.2% of global cotton exports, i.e., the top three cotton exporting countries supply more than 50% of total world cotton exports.

What percentage of total world cotton exports come from Hong Kong, Brazil and Italy?

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Answer

The percentage share of world cotton exports for Hong Kong, Brazil and Italy are 3.0%, 2.8% and 2.7% respectively which adds up to a total of 8.5%.

Note that it is important to include the zero as in 3.0% for Brazil so that all numbers are expressed to the same number of decimal places. This keeps the decimal point in the right place when carrying out addition.

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