The rising value of the Australian dollar has had a dramatic impact on the value of our imports and exports in the three months to September and over the previous 12 months.
Today, the Australian Bureau of Statistics revealed a 9.6% fall in the Export Price Index for the September quarter and a 20.7% drop for the year to September.
The Import price index fell 3.0% for the September quarter and 2.3% for the year to September, indicating most of the decline was concentrated in the three months ending September 30.
In fact, helped by a combination of sharply lower contract prices for coal and iron ore, plus the impact of the rising Australian dollar, the 20.7% plunge in the export index in the year top September was the largest recorded since the Bureau of Statistics started measuring it in 1974.
The dollar, which is up 62% or since the lows of early February so this year against the US dollar and up more than 30% on a trade weighted index, has already starting hurting exporters, such as mining companies, rural shippers and manufacturers. It was trading around 92.80 US cents just before midday.
But importers, such as car companies and retailers and wholesalers, are seeing benefits with prices starting to edge down in shops.
The stronger dollar has clipped the rise in the price of oil internationally and its impact on our petrol prices as well.
Get Crikey FREE to your inbox every weekday morning with the Crikey Worm.
These figures show that import price pressures won’t have a big impact in the quarterly producer price indexes out next Tuesday, nor the Consumer price Index numbers for the September quarter, out the next day on Wednesday.
But should the dollar continue at current levels into 2010, it is going to make a mess of Australian export income, especially from the resources sector.
Tourism figures show a steady rise in the number of Australians travelling overseas this year, and an easing in tourist numbers arriving because the dollar is starting to make Australia an expensive place to visit compared with London and the US. Some are clearly opting to stay at home.
The ABS said the fall in import prices “was driven mainly by the appreciation of the Australian dollar against all major trading currencies, as well as lower prices paid for general industrial machinery and equipment, and machine parts, -7.4%.
“These falls were partly offset by rises in prices paid for petroleum, petroleum products and related materials (+15.1%).
The fall in the export price index “was driven mainly by falls in prices received for coal, coke and briquettes (-34.2%) and metalliferous ores and metal scrap (-12.1%), as well as the appreciation of the Australian dollar against all major trading currencies.”
The ABS said the 20.7% fall in the Export Price Index was “the largest annual decrease since the current series began in September quarter 1974.”