MNI Australia Q2 Terms of Trade May Fall On Import Price Rise

--Import Price Index Rises Faster Than Export Price

     SYDNEY (MNI) -  - Australia's export price index rose in the second quarter

but the import price index rose at a faster pace, pointing to a decline in terms

of trade after two quarters of increase. 

     Data published by the Australian Bureau of Statistics Thursday showed the

export price index rose 1.9% q/q in Q2, rising for the third straight quarter

and beating MNI median forecast which was for a 1.0% decline. With the latest

rise, export price index has risen 6.6% y/y in Q2 after a 1.4% decline in Q1.

     The import price index rose 3.2% q/q, also rising for the third straight

quarter and at a faster pace than MNI median forecast for a 2.0% gain. The 3.2%

rise was the biggest since a similar outcome in Q1 of 2014. On a y/y basis, the

import price index was up 6.0%, again the fastest since Q1 of 2014.

     In the latest quarter, the fall in the Australian dollar contributed to the

rise in both the import and export price indexes.

     The increase in import price index was mainly driven by rise in prices for

petroleum and related products (+13.7%), general industrial machinery (+3.3%)

and electrical machinery and appliances (+1.7%).

     The rise in export price index was mainly driven by increase in gas prices

(+10.8%) and petroleum and related products (+8.5%). This was partly offset by

fall in prices for iron ore which mainly led to a 1.7% decline in metalliferous

ores and metal scrap prices.

     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

                                      Q2                  Q2

Quarter-over-quarter                +3.2                +1.9

MNI median                          +2.0                -1.0

Year-over-year                      +6.0                +6.6

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

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