MNI Australia Q1 Terms of Trade May Rise For 2nd Straight Qtr

--Export Prices Rise in Q1 On Iron Ore, Coal, LNG

     SYDNEY (MNI) -  - Australia's export price index rose faster in the first

quarter than the import price index, pointing to a rise in terms of trade for

the second straight quarter. 

     Data published by the Australian Bureau of Statistics Thursday showed the

import price index rose 2.1% q/q in Q1, higher than MNI median forecast for a

1.2% rise. The export price index rose 4.8% q/q and was in line with MNI median

forecast. A likely rise in terms of trade may be slightly better, though not

much different to the Reserve Bank of Australia's forecast in the February

Statement on Monetary Policy.

     In the latest quarter, the rise in export price index was driven mainly by

rise in iron ore prices due to demand from China. Demand from China as well as

local supply disruptions also led to rise in coal prices. Gas prices rose 13.8%

q/q in response to strong demand for liquefied natural gas in northern Asia for

heating. Export contract prices for LNG are also influenced by the international

crude oil prices with a two to four month lag, ABS said.

     Import price index rose mainly due to 1.5% q/q rise in road vehicles which

was in turn because of rise in price of raw materials, and 8.7% q/q rise in

petroleum and petroleum products.

     International trade price indexes for the first quarter released by the

Australian Bureau of Statistics on Thursday.

                      Import Price Index  Export Price Index

------------------------------------------------------------

                                % Change            % Change

                                      Q1                  Q1

Quarter-over-quarter                +2.1                +4.9

MNI median                          +1.2                +4.8

Year-over-year                      +2.3                -1.4

--MNI Sydney Bureau; tel: +61 2-9716-5467; email: sophia.rodrigues@marketnews.com

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