KEY POINTS
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The monthly balance of goods and services was a deficit of $1.56 billion in July 2009 (current prices)—this follows a (revised) trade deficit of $538 million in June 2009.
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Japan is Australia's largest export market, accounting for $52.6 billion in 2008–09 (free on board value terms). This is followed by China ($39.3 billion), the Republic of Korea ($19.2 billion), India ($15.4 billion) and the United States of America ($11.6 billion).
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The Australian Bureau of Agriculture and Resource Economics (ABARE) forecasts that earnings from Australia’s commodity exports will fall by 20 per cent to $158 billion in 2009–10, following an estimated rise of 32 per cent to $197 billion in 2008–09. For energy and minerals, export earnings are forecast to fall by 23 per cent to $123 billion in 2009–10, mainly as a result of lower contract prices for bulk commodities, including coal and iron ore. ABARE also expects the value of farm exports to fall by 2.5 per cent to $31.1 billion in 2009–10, following a significant rise of 16 per cent to $31.9 billion in 2008–09.
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The Australian dollar, as measured by the RBA's trade weighted index has appreciated steadily in recent months. The appreciation of the currency has coincided with a fall in commodity prices.
FACTS AND FIGURES
The monthly trade surplus (current prices)—as reported in the ABS international trade in goods and services publication—totalled $1.6 billion in July 2009, an increase of $1.0 billion on a revised deficit in June 2009.
Total exports declined by 1.4 per cent in July 2009 in value terms to $20.0 billion—this is 13.9 per cent lower than the same month of the previous year. This monthly decline was driven by non-rural and other goods exports which fell by 1.2 per cent and rural goods exports which fell by 3.6 per cent in July. Services exports fell by 0.9 per cent in the month.
Total imports rose by 3.5 per cent in July to $21.6 billion—this is 11.3 per cent lower than the corresponding month a year ago.
Exports by industry
Total industry exports (current prices) totalled $285.5 billion over 2008–09—this is 150.0 per cent higher than the total for 1998–99.
- Agricultural exports accounted for 4.1 per cent of total exports in 2008–09, down from 8.8 per cent in 1998–99.
- Mining exports accounted for 41.5 per cent of total exports in 2008–09, well above the 17.7 per cent in 1998–99.
- Manufacturing exports accounted for 29.7 per cent of total exports in 2008–09, down from 45.6 per cent in 1998–99.
- Services exports accounted for 18.9 per cent of total exports in 2008–09, down from 24.8 per cent in 1998–99.
- Exports not specifically classified to an industry (due to not readily being classified and/or confidential) account for the remainder.
Export volumes and values
Export volumes—as reported in the ABS balance of payments—rose by 1.0 per cent in the June quarter 2009 to be $57.9 billion but remain 0.2 per cent lower through the year, while export values fell by 14.9 per cent to $61.5 billion in the June quarter and remain 8.3 per cent lower through the year. Over the 10 years to the June quarter 2009, export volumes have increased considerably by 137.8 per cent, while export values have dramatically increased by 223.5 per cent (see chart 1).
The Australian dollar, as measured by the RBA's trade weighted index has appreciated steadily in recent months. This has coincided with a fall in commodity prices.
The terms of trade have recently fallen following years of strong growth.
Australia's export destinations
Japan is Australia's largest export market, accounting for $52.6 billion in 2008–09 (free on board value terms). This is followed by China ($39.3 billion), the Republic of Korea ($19.2 billion), India ($15.4 billion) and the United States of America ($11.6 billion). China is Australia's largest two-way trading partner (imports and exports), followed by Japan, the United States and the Republic of Korea.
Australia's export destinations
Japan is Australia's largest export market, accounting for $50.6 billion in 2008 (free on board value terms). This is followed by China ($32.5 billion), Republic of Korea ($18.5 billion) and India ($13.5 billion). China is Australia's largest two-way trading partner (imports and exports), followed by Japan, the United States and the Republic of Korea.
Agricultural and resource export forecasts
In its Australian commodities report, September quarter 2009, the Australian Bureau of Agricultural and Resource Economics (ABARE) forecasts that Australia's commodity export earnings will fall by 20 per cent in 2009–10 to $158 billion.
Source: ABS Cat.No. 5302.0
ABARE believes export earnings for Australian mineral and energy commodities will decrease by 23 per cent to $123 billion in 2009–10, compared with their previous estimate of $161 billion in 2008–09. The main contributing factors to this forecast are sharply lower contract prices for bulk commodities, such as coal and iron ore, and the assumed higher average value of the Australian dollar.
ABARE forecasts that export earnings for farm commodities will be around $31.1 billion in 2009-10 (a decline of 2.5 per cent from 2008–09) as a result of less favourable spring seasonal conditions and the higher average value of the Australian exchange rate.