COMMODITY PRICE ADJUSTMENT
The balance of payments goods series are primarily based on international merchandise trade exports data (on a recorded trade basis) which are sourced from information provided by exporters to the Australian Customs and Border Protection Service (Customs and Border Protection). At the time of initial reporting to Customs and Border Protection the final prices may not be known for some commodities. New contract prices that have been recently negotiated, or are still being negotiated, for commodities like iron ore and coal may not be fully reflected in the Customs and Border Protection source data. Final prices are updated progressively in recorded trade data as exporters revise the information provided to Customs and Border Protection. It is not yet known how the recent move from annual to quarterly contracts for some exporters will impact on the reporting of information.
Balance of payments data have been adjusted for June quarter 2010 to take into account additional information on the unit price of iron ore and coal exports. The respective adjustments are $218m for metal ores and minerals and $345m for coal, coke and briquettes. As revisions to the recorded trade prices are provided to the ABS they will be incorporated into the balance of payments series and the adjustments reduced accordingly.
Recent commodity price increases, and the industry shift from annual to quarterly negotiated contracts introduced this quarter, are likely to result in a permanent change in the level of the series. As a result, an estimated trend break correction of $3,700m has been applied to metal ores and minerals, and $3,100m has been applied to coal, coke and briquettes and related aggregates in the June quarter 2010. As a minimum of three quarters are required for a trend break correction to be accurately estimated, the size of the trend break may be revised. Users should interpret the trend estimates for the most recent quarters with caution.