Australian trade goes boom as China shoots its own foot

Via the ABS:

Key statistics

•    Exports of goods in December 2020 increased $4,901m (16%) to $34,927m
•    Imports of goods in December 2020 decreased $2,521m (-9%) to $25,971m
•    For December there is a goods trade surplus of $8,956m (original, current price, merchandise trade basis)

This publication presents preliminary data on Australia’s international trade in goods on an original, current price, merchandise trade basis. These data are subject to revision as more complete and accurate information becomes available. See Methodology for more details.

Exports

International trade in goods – exports summary (a)
Oct 2019 Nov 2019 Dec 2019 Oct 2020 Nov 2020 Dec 2020 Nov 2020 – Dec 2020
$m $m $m $m $m $m $m % $m YoY % YoY
Total goods 31,444 31,800 34,067 30,102 30,026 34,927 4,901 16 860 3
Rural goods 3,882 3,963 4,345 3,177 3,241 4,482 1,241 38 137 3
Non-Rural (b) 25,536 25,935 27,555 24,939 23,909 27,647 3,738 16 92 0
Non-monetary gold (c ) 2,026 1,902 2,167 1,987 2,876 2,799 -77 -3 632 29

– nil or rounded to zero (including null cells)
a. Caution should be used when interpreting preliminary estimates as they may be different to the final published estimates, and are subject to revision.
b. For all time periods, confidentialised export items are included in Non-rural goods, whether or not this reflects their true nature.
c. Includes Gold coin.

Exports key movements

Exports of goods in December 2020 increased from the revised November 2020 estimate of $30,026m by $4,901m (16%) to $34,927m.

In December 2020:

•    metalliferous ores increased $2,752m (22%)
•    cereals increased $815m (216%)
•    coal increased $762m (26%)
•    gas increased $173m (6%)

Iron ore has driven the increase in metalliferous ores, it accounted for 82% of the total value and was up $2,165m to $12,510m. The increase in iron ore has been a result of both quantity, up 11% in December on November and strong prices, which has resulted in record values in December for iron ore and consequentially metalliferous ores.

December exports of cereals was the largest on record. The increase in cereals was driven by wheat, up $604m (423%) and barley, up $182m (254%) with 42% of December’s barley export headed for Saudi Arabia ($106m). Favourable growing conditions in Australia, coupled with less favourable conditions in other wheat growing regions such as Russia (the world’s largest wheat exporter), has driven demand for Australian wheat to record highs.

Australia’s three largest export destinations for coal all recorded large increases in December including: Japan, up $236m (27%), India, up $272m (38%), and South Korea, up $148m (48%).

Year-on-year

December 2020 exports are $860m (3%) higher than December 2019, driven by:

•    metalliferous ores, up $3,603m (31%)
•    cereals, up $689m (137%)
•    non-monetary gold (excluding gold coin), up $612m (30%)

Offsetting the year-on-year increases were gas, down $1,519m (-35%) and coal, down $1,126m (-23%).

Exports for the 2020 calendar year were 7% lower overall than 2019.

Top five export destinations

Key country movements:

•    China increased $2,312m (21%)
•    Japan increased $864m (24%)
•    United States of America increased $678m (58%)
•    India increased $339m (35%)
•    South Korea decreased $317m (-14%)

Increased exports to Japan were led by metalliferous ores up $298m (44%), predominantly iron ore, and coal up $236m (27%). The increase to coal exports were driven by thermal coal, up $130m (25%), and hard coking coal up, $108m (54%).

The United States of America and India displaced the United Kingdom and Singapore from the top five export destinations. Non-monetary gold drove the increase to the USA, up $646m (306%) and the increase to India was driven by coal, up $272m (38%) which was predominantly hard coking coal, up $268m (62%).

Exports to China

Driving the increase to Australia’s largest trading partner, China:
•    metalliferous ores, up $2,094m (25%)
•    cereals, up $248m (681%)

The increase in metalliferous ores to China was driven by iron ore, up $1,951m (25%) to $9,865m, accounting for 79% of Australian iron ore exports in December. The increase is driven by a rebound in quantity from November (up 15%) and strong prices. On average, China paid 9% more per tonne in December for Australian iron ore than in November.

Exports of wheat to China reached $250m, after nil exports since August 2020. This represented one third of the total wheat exported from Australia in December and 88% of the total cereal exports to China and is the largest monthly wheat export on record to any single destination country.

Imports

International trade in goods – imports summary (a)
Oct 2019 Nov 2019 Dec 2019 Oct 2020 Nov 2020 Dec 2020 Nov – Dec 2020
$m $m $m $m $m $m $m % $m YoY % YoY
Total goods 28,680 25,940 26,008 25,543 28,492 25,971 -2,521 -9 -37 -0
Capital goods (b) 7,008 6,524 7,136 6,411 8,623 6,984 -1,639 -19 -152 -2
Consumption goods 9,657 8,538 7,864 9,623 9,823 9,384 -439 -4 1,520 19
Intermediate & other goods 11,545 10,398 10,630 9,034 9,520 9,023 -497 -5 -1,607 -15
Non-monetary gold 469 480 378 475 526 580 54 10 202 53

– nil or rounded to zero (including null cells)
a. Caution should be used when interpreting preliminary estimates as they may be different to the final published estimates, and are subject to revision.
b. For all time periods, confidentialised import items are included in Capital goods, whether or not this reflects their true nature

Nearly all of those export gains are related to China’s suicidal trade war on its own commodity supply chain. Even those to other Asian nations, which have seen price rises in the same commodities for the same reasons.

That’s what happens when sensible policy process is displaced by the prejudices of the dictator.

David Llewellyn-Smith
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Comments

  1. Did the ABS really state
    `Nearly all of those export gains are related to China’s suicidal trade war on its own commodity supply chain. Even those to other Asian nations, which have seen price rises in the same commodities for the same reasons.`
    at the end of their report?

    I thought all gov publications were supposed to be dry and devoid of that type of commentary.