Commodity price index lifts in July

The RBA has released its commodity price index for July, which rose 0.9% in SDR (currency weighted) terms – the key determinant of the terms-of-trade – but slumped by 12% over the year:

Preliminary estimates for July indicate that the index increased by 0.9 per cent (on a monthly average basis) in SDR terms, after decreasing by 0.2 per cent in June (revised). The non-rural and base metals sub-indices increased in the month, while the rural sub-index decreased. In Australian dollar terms, the index decreased by 0.2 per cent in July.

Over the past year, the index has decreased by 12 per cent in SDR terms, led by lower coal, iron ore, LNG and oil prices. The index has decreased by 12.1 per cent in Australian dollar terms.

In Australian dollar terms, commodity prices declined by 12.1% over the past year.

The RBA commodity price index reported a 0.3% rise in commodity prices over the June quarter, which given past correlations, suggests minimal change in the terms-of-trade when the national accounts are released early next month:

Leith van Onselen
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