Australia's first quarter trade surplus to be boosted by soaring export prices

Export prices rose by 29.1% year-on-year in the 1st quarter of 2017

The Dollar Business Bureau

The International Trade Price Index released by Australian Bureau of Statistics for the month of March shows that while import prices remained stable, export prices soared to astonishing highs. Cumulatively, import prices increased by merely 1.2% from the first quarter of the previous year whereas export prices rose by 29.1% over the same period.

As against the October-December quarter (2016), import prices experienced a fall of 0.6% while export prices grew by 9.4%. The reason cited for volatile export price movement is a turn in commodities cycle, propelled by commodity prices like those of iron ore reaching $94 per tonne towards the end of February 2017.

Australia's metal exports in alumina, iron ore and copper showed a price increase of 18.8% during the January-March 2017 period. This was followed by a 12% increase in the previous quarter. Since 2010, this had been the highest price rise, indicating a pickup in commodity prices after a lull caused due to the global financial meltdown.

Mineral fuels, lubricants and related materials rose 9.2% driven by Petroleum, petroleum products and related materials.

The rise in export prices is likely to boost the balance of trade in the first quarter, as Australia’s trade surplus for the month of February was the second highest on record.