HONG KONG'S traders say the potential boost to exports from a weak dollar is being eroded by the higher cost of imported raw materials. Louis Wong, chairman of the Hong Kong Exporters' Association, said the bill for some raw materials, such as plastic, had increased between 40 and 50 per cent. The cost of other raw materials essential for export trade ranging from cotton to paper rose between 30 and 40 per cent. Mr Wong said: 'Any windfall for exporters from the dollar has been short-term. Gains made on the currency will have to go out on the higher cost of imports.' He estimated costs across-the-board could rise between five and 10 per cent. Re-exports and imports increased substantially last month, the Government said yesterday. The value of total exports rose $17.5 billion, or 20 per cent, to $105 billion compared with March last year while re-exports swelled to $87 billion, an increase of 22 per cent, or $16 billion, year-on-year. But these increases were overshadowed by a $36 billion trade deficit blow-out in the first quarter. Edward Leung, chief economist for the Trade Development Council, said the soaring value of the yen had pushed up the deficit. Imports from Japan last year accounted for about 13 per cent of the territory's total trade and a quarter of its retained imports. Graham Neilson, an economist with Asia Equity, added: 'A trade deficit was forecast. But the reason it is such an extraordinary widening is the weakness of the dollar.' Last month, total exports rose 20 per cent from a year earlier to $105 billion. The value of imports grew 26 per cent to $122 billion. The visible trade figures do not reflect Hong Kong's lucrative trade in services. But some experts are questioning whether the anticipated surplus in services will be high enough to offset the deficit in the territory's trade in merchandise.