Export prices drop as global energy demand falls

The Export Price Index fell 8.5 per cent in the June quarter 2023, and 11.2 per cent annually, according to data released today by the Australian Bureau of Statistics (ABS).

Michelle Marquardt, ABS head of prices statistics, said: “The 8.5 per cent fall in the Export Price Index is the largest quarterly fall since the September quarter 2009, largely due to a strong drop in global energy demand.”

Energy commodities were the main driver of the price fall this quarter. Export prices for Coal, coke and briquettes fell 20.6 per cent while Gas, natural and manufactured fell 20.9 per cent.

“Energy prices are falling from the highs seen in 2022, as global economic activity slows and supply pressures ease. Higher coal and gas inventories in Europe following a warmer than usual Northern Hemisphere winter, along with ongoing implementation of policies to reduce carbon emissions, have reduced world-wide demand for these commodities. Reductions in supply issues related to the war in Ukraine and improved weather conditions have also contributed to the fall in prices for coal and gas seen this quarter.” Ms Marquardt said.

Weaker energy prices also resulted in a 0.8 per cent fall in the Import Price Index in June quarter 2023. Prices for Petroleum and petroleum products were down 7.0 per cent for the quarter.

Falling energy prices resulted in price reductions for other intermediate imported goods where production is energy intensive. These include Fertilisers, which fell 16.4 per cent, and Chemical materials and products, down 8.2 per cent.

Somewhat offsetting the falls in energy prices, various imported consumption and capital goods are still being affected by rising price pressures. These include consumption goods ranging from food and beverages to household electrical items, and capital goods including machinery and industrial equipment.

“There is evidence that some international exporters are still passing on cost pressures from 2022. This, combined with a weaker Australian dollar, pushed prices upward for imported consumption and capital goods.” Ms Marquardt said.