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5422.0 - International Merchandise Trade, Australia, Mar 1998  
Previous ISSUE Released at 11:30 AM (CANBERRA TIME) 21/05/1998   
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Feature Article - Export and import currencies


(This article was published in the March quarter 1998 issue of International Merchandise Trade, Australia (ABS Catalogue Number 5422.0))




INTRODUCTION

The recent Asian economic crisis and the significant depreciation of some Asian currencies have stimulated interest in the currencies used in invoices for Australia's exports and imports. This article provides an analysis of the major invoice currencies used for Australia's merchandise trade for the four quarters of calendar year 1997 and March quarter 1998. These five quarters are compared for both exports and imports to identify any changes in the composition of the currencies in which goods are invoiced, particularly any movements which may be associated with the Asian economic crisis. The invoice currencies of major commodities exported from and imported into Australia, classified according to the Standard International Trade Classification Revision 3 (SITC Rev3), are also examined.

Information on the currencies used in import and export transactions is collected by the Australian Customs Service (ACS) and is included with the other international trade information passed to the Australian Bureau of Statistics (ABS). This information, while not included in a printed publication, is available as a special data service and may be obtained by contacting ABS ontact Client Services in your local ABS Office.


DATA COLLECTION PROCEDURES

For imports, the value of goods is reported to the ACS in the invoice currency of the transaction. The Customs system automatically converts the value to Australian dollars using exchange rates prevailing on the reported date of departure of the goods from the overseas country. The ABS receives details of the reported invoice currency, together with the value of the import transaction in Australian dollars.

For exports, goods invoiced in US dollars, Japanese yen, pounds sterling, New Zealand dollars or Deutsche marks, are reported in those foreign currencies. Amounts invoiced in other currencies are converted to Australian dollars by the exporter and this value is reported on the Customs entry. The invoice currency is also reported on the Customs entry. The ABS receives the exports data as reported to the ACS and converts values reported in one of the five major foreign currencies to Australian dollars using the exchange rate prevailing on the date of departure of the goods from Australia.

Readers should note that while currencies are converted to Australian dollars at exchange rates applicable on the day of shipment, the Australian importer or exporter may undertake the conversion for actual receipt or payment using a different exchange rate, or one applying on a different day. As well, it should be noted that many importers and exporters hedge the payments and the actual exchange rate achieved may differ from that applicable on shipment date.


ANALYSIS OF THE MAJOR INVOICE CURRENCIES OF AUSTRALIA'S MERCHANDISE TRADE

Tables A and B show the major invoice currencies of Australia's exports and imports respectively for the five quarters from March 1997 to March 1998. For both exports and imports, the predominant invoice currency is the US dollar, accounting for 63.6% of total Australian exports for the five quarters and 51.9% of total imports for the same period. The other significant currency for both exports and imports is the Australian dollar. Almost one third of Australia's exports and about one quarter of Australia's imports were invoiced in Australian dollars during the period.

The proportion of trade denominated in currencies other than US and Australian dollars is relatively insignificant. The third largest invoice currency used for both exports and imports is the Japanese yen, accounting for 0.8% of total exports and 6.0% of imports. Exports and imports invoiced in the currencies of China, Hong Kong, Indonesia, the Republic of Korea, Malaysia, the Philippines, Singapore, Taiwan and Thailand (described as ‘Other Asian currencies’ in the Tables), comprised only a small proportion of total Australian exports and imports. As can be seen from Tables A and B, only 0.2% of total exports from Australia and 1.7% of total imports to Australia were denominated in 'Other Asian currencies'.

An analysis of invoice currency over the four quarters of 1997 and March quarter of 1998 did not show any significant movements between currencies that could be attributed to the Asian currency crisis. Given the forward contracting arrangements of traders, changes in invoice currency may not have had time to show up. The value of trade across the five major invoice currencies, and the 'Other Asian currencies' component, rose steadily throughout 1997 with a slight fall in March quarter 1998. The proportion of trade denominated in each of the currencies also remained fairly constant throughout 1997 and March quarter 1998. There appears to have been little immediate change in the composition of invoice currencies used for Australia's imports and exports in response to the Asian economic crisis.


ANALYSIS OF MAJOR EXPORT AND IMPORT COMMODITIES BY INVOICE CURRENCY

Tables C and D show Australia's top ten export and import commodity groups, expressed in terms of Divisions of the Standard International Trade Classification (SITC) Revision 3, and the major currencies in which they were invoiced for the five quarters, March 1997 to March 1998 inclusive. Consistent with the invoice currency composition of total Australian exports and imports, US and Australian dollars are the dominant invoice currencies for most of Australia's major export and import commodity Divisions. Other currencies are barely represented in the top ten export commodity groups. In the case of imports, the spread of currencies is wider, but in all cases more than 50% of total trade in the top ten Divisions is denominated in US dollars and/or Australian dollars.

The major invoice currencies for exports of Metalliferous ores (SITC 28), Australia's largest export commodity Division, were the US dollar with 83.0% and the Australian dollar with 17.0%. The US dollar was also the major invoice currency for the other nine major export commodity Divisions. In particular, in 1997 and the March quarter of 1998, the US dollar comprised 94.7% of the invoice value of Coal, coke and briquettes (SITC 32) and 92.4% of Non-monetary gold exports (SITC 97). For Cereal and cereal preparation exports (SITC 04), 89.7% were invoiced in US dollars and 8.7% in Australian dollars, with ‘Other Asian currencies’ comprising the third largest invoice currency within this Division, accounting for 0.8% of the exports. The Australian dollar was almost as significant as the US dollar in exports of Textile fibres (including wool) (SITC 26), accounting for 46.0% as against 48.8% invoiced in US dollars.

Road vehicles (SITC 78) was Australia's largest import commodity Division for the period from March quarter 1997 to March quarter 1998. It was also one of only two of the top ten imports Divisions invoiced predominantly in Australian dollars, the other being Medicinal and pharmaceutical products (SITC 54). For Road vehicles, the Australian dollar represented 43.0%, the Japanese yen 24.3%, the US dollar 23.1%, and Deutsche marks 6.8%. In 1997 and the March quarter of 1998, the US dollar comprised 83.7% of Petroleum, petroleum products and related materials imports (SITC 33) and 75.5% of Office machines and automatic data processing machines (SITC 75). For both of these commodity Divisions, the Australian dollar ranked as the second most important invoice currency accounting for just over 16% of imports. For imports of Electrical machinery (SITC 77), the US dollar and Australian dollar together accounted for only 75.9% of the import value (representing 57.7% and 18.2% of the value respectively). Deutsche marks, pounds sterling, Japanese yen and ‘Other Asian currencies’ contributed a further 14.7% to the invoice value of commodities in this Division. Likewise, for imports of General industrial machinery (SITC 74) the US dollar (42.5%) and Australian dollar (16.1%) together comprised only 58.6% of the value of imports in this commodity Division with a further 25.7% invoiced in the other major currencies (including 'Other Asian currencies'). A significant 14.4% of imports for this commodity Division were invoiced in a range of other currencies.


ANALYSIS OF EXPORTS AND IMPORTS BY OTHER INVOICE CURRENCY

Over the five quarters studied, goods invoiced in 'Other Asian currencies' and 'Other currencies' represented 0.2% and 0.8% respectively of exports, and 1.7% and 7.7% respectively of imports. For exports, the Divisions with the largest percentage of trade invoiced in 'Other Asian currencies' and 'Other currencies' were, respectively, Travel goods, handbags and similar containers (SITC 83) with 5.5% and Organic chemicals (SITC 51) with 5.7%. For imports, the Divisions with the largest percentage of trade invoiced in 'Other Asian currencies' and 'Other currencies' were, respectively, Gold coin, and other coin being legal tender (SITC 95) with 26.6% and Live animals, other than fish (SITC 00) with 64.8%. In the case of Live animals, other than fish, most imports were invoiced in NZ dollars (63.7%).




TABLE A: INVOICE CURRENCIES FOR EXPORTS, March Quarter 1997 to March Quarter 1998
Mar qtr 1997.......
Jun qtr 1997.......
Sept qtr 1997......
Dec qtr 1997.......
Mar qtr 1998.......
Total................................
    Currency
$A m
%
$A m
%
$A m
%
$A m
%
$A m
%
$A m
%

    US Dollars
12,371
64.8
13,169
62.4
13,213
61.4
14,647
63.5
13,394
66.0
66,793
63.6
    Australian Dollars
6,145
32.2
7,307
34.6
7,568
35.2
7,686
33.3
6,251
30.8
34,957
33.3
    Japanese Yen
111
0.6
122
0.6
228
1.1
207
0.9
129
0.6
797
0.8
    Pounds Sterling
117
0.6
152
0.7
170
0.8
177
0.8
159
0.8
776
0.7
    NZ Dollars
123
0.6
128
0.6
143
0.7
146
0.6
141
0.7
681
0.6
    Other Asian currencies(a)
35
0.2
45
0.2
49
0.2
48
0.2
38
0.2
215
0.2
    Other
177
0.9
182
0.9
151
0.7
160
0.7
179
0.9
850
0.8
    Total
19,078
21,106
21,521
23,072
20,291
105,068

(a) Other Asian currencies include currencies for the following countries: China, Hong Kong, Indonesia, Republic of Korea, Malaysia, Philippines, Singapore, Taiwan and Thailand.



TABLE B: INVOICE CURRENCIES FOR IMPORTS, March Quarter 1997 to March Quarter 1998
Mar qtr 1997.......
Jun qtr 1997.......
Sept qtr 1997......
Dec qtr 1997.......
Mar qtr 1998.......
Total...............................
    Currency
$A m
%
$A m
%
$A m
%
$A m
%
$A m
%
$A m
%

    US Dollars
9,429
51.0
10,599
52.8
11,201
51.3
11 ,880
51.5
11,691
52.5
54,799
51.9
    Australian Dollars
4,599
24.9
4,864
24.2
5,501
25.2
5,809
25.2
5,420
24.3
26,192
24.8
    Japanese Yen
1,145
6.2
1,151
5.7
1,404
6.4
1,330
5.8
1,335
6.0
6,366
6.0
    Deutsche Marks
830
4.5
881
4.4
939
4.3
996
4.3
968
4.3
4,614
4.4
    Pounds Sterling
679
3.7
738
3.7
773
3.5
807
3.5
761
3.4
3,758
3.6
    Other Asian currencies(a)
280
1.5
303
1.5
380
1.7
446
1.9
362
1.6
1,770
1.7
    Other
1,519
8.2
1,538
7.7
1,624
7.4
1,781
7.7
1,725
7.8
8,187
7.7
    Total
18,482
20,073
21,821
23,049
22,261
105,686


(a) Other Asian currencies include currencies for the following countries: China, Hong Kong, Indonesia, Republic of Korea, Malaysia, Philippines, Singapore, Taiwan and Thailand.


TABLE C: SELECTED EXPORT COMMODITIES BY INVOICE CURRENCIES,
March Quarter 1997 to March Quarter 1998
    Description and SITC Division code
Total exports included in SITC Division
(%)
US
Dollars

(%)
Australian Dollars

(%)
Japanese
Yen


(%)
Pounds
Sterling


(%)
NZ
Dollars

(%)
Other Asian
currencies

(a)
(%)
All
other
currencies
(%)

    Metalliferous ores and metal scrap (28)
12.0
83.0
17.0
0.0
0.0
0.1
0.0
0.0
    Coal, coke and briquettes (32)
10.6
94.7
5.3
0.0
0.0
0.0
0.0
0.0
    Cereals and cereal preparations (04)
7.0
89.7
8.7
0.1
0.0
0.3
0.8
0.3
    Gold, non-monetary (excl. gold ores and concentrates) (97)
6.2
92.4
5.7
0.0
0.0
0.0
0.0
1.9
    Non-ferrous metals (68)
5.9
82.3
17.0
0.0
0.2
0.4
0.0
0.0
    Textile fibres and their wastes (not manufactured into yarn or fabric) (26)
5.8
48.8
46.0
0.7
0.7
0.0
0.0
3.8
    Petroleum, petroleum products and related materials (33)
4.7
68.9
31.1
0.0
0.0
0.0
0.0
0.0
    Meat and meat preparations (01)
4.1
59.4
32.4
1.8
2.3
0.3
1.0
2.9
    Gas, natural and manufactured (34)
2.4
98.8
1.2
0.0
0.0
0.0
0.0
0.0
    Dairy products and birds’ eggs (02)
2.2
68.7
29.4
0.2
0.8
0.0
0.5
0.3
    Organic chemicals (51)
0.2
45.9
47.8
0.1
0.1
0.5
0.0
5.7
    Travel goods, handbags and similar containers (83)
0.0
7.7
82.3
0.1
0.0
3.9
5.5
0.3


(a) Other Asian currencies include currencies for the following countries: China, Hong Kong, Indonesia, Republic of Korea, Malaysia, Philippines, Singapore, Taiwan and Thailand.



TABLE D: SELECTED IMPORT COMMODITIES BY INVOICE CURRENCIES,
March Quarter 1997 to March Quarter 1998
    Description and SITC Division code
Total imports included in SITC Division
(%)
US
Dollars

(%)
Australian Dollars

(%)
Japanese
Yen


(%)
Deutsche
Marks

(%)
Pounds
Sterling

(%)
Other Asian
currencies

(a)
(%)
All
other
currencies
(%)

    Road vehicles (incl. air-cushion vehicles) (78)
11.7
23.1
43.0
24.3
6.8
0.9
0.2
1.7
    Office machines and automatic data processing machines (75)
7.7
75.5
16.6
4.1
0.4
1.4
0.6
1.4
    Electrical machinery, apparatus, appliances, parts (incl. non-electric counterparts of electrical domestic equipment) (77)
6.0
57.7
18.2
4.2
5.8
4.7
1.1
8.3
    General industrial machinery, equipment, and parts thereof not elsewhere specified (74)
6.0
42.5
16.1
9.4
10.5
5.8
1.5
14.4
    Miscellaneous manufactured articles nes (89)
5.8
53.9
21.3
2.3
2.5
8.4
4.2
7.4
    Petroleum, petroleum products and related materials (33)
5.8
83.7
16.1
0.0
0.1
0.1
0.0
0.1
    Machinery specialised for particular industries (72)
4.8
43.6
14.6
9.8
11.9
5.4
0.5
14.2
    Telecommunications and sound recording and reproducing apparatus and equipment (76)
4.4
49.4
33.0
4.6
2.3
5.6
0.4
4.6
    Textile yarn, fabrics, made-up articles, nes, and related products (65)
2.8
63.9
17.1
2.9
2.3
3.0
2.5
8.3
    Medicinal and pharmaceutical products (54)
2.7
27.3
49.6
0.5
7.3
3.7
0.3
11.4
    Gold coin (95)
0.2
47.1
1.6
0.0
10.2
9.2
26.6
5.3
    Live animals other than fish (00)
0.0
3.0
31.5
0.0
0.0
0.6
0.0
64.8


(a) Other Asian currencies include currencies for the following countries: China, Hong Kong, Indonesia, Republic of Korea, Malaysia, Philippines, Singapore, Taiwan and Thailand.


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