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5368.0 - International Trade in Goods and Services, Australia, Jun 2005  
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Export and Import Invoice Currencies

INTRODUCTION

This article analyses the major invoice currencies used for Australia's international merchandise trade. Compositional changes in the currencies used to invoice goods imported into, and exported from, Australia during the five quarters from March quarter 2004 to March quarter 2005 are identified. The article also examines invoice currencies by selected divisions of the Standard International Trade Classification Revision 3 (SITC Rev3).


Historical comparisons from March quarter 2000 examine invoicing trends over the past five years.


Similar analyses appeared in the March quarter 1998, March quarter 2001 and March quarter 2003 releases of the discontinued publication International Merchandise Trade, Australia (ABS cat no 5422.0). The March quarter 2003 article is available on the ABS web site <www.abs.gov.au> by selecting Themes/Economy/International Trade/Topics of Interest.


All values in this article are reported in Australian dollars. Details about the derivation of invoice currencies are included as an Appendix to this article.



EXCHANGE RATES

Graph 1 shows movements in the value of the Australian dollar against selected other currencies and the movement in the Trade Weighted Index (TWI) from March quarter 2000 to March quarter 2005.


Over this period the Australian dollar appreciated against:

  • the United States dollar (up 23%)
  • the Hong Kong dollar (up 23%)
  • the Japanese yen (up 20%)
  • the Singapore dollar (up 19%)
  • the UK pound sterling (up 5%).

Over this period the Australian dollar depreciated against:
  • the New Zealand dollar (down 14%)
  • the Euro (down 7%).

There has been an overall rise in the TWI of 15% since March quarter 2000.


A feature article released with the December quarter 2004 issue of National Income, Expenditure and Product, Australia (ABS cat no 5206.0) discusses, amongst other things, how exchange rates can influence the terms of trade. The article, The Terms of Trade and the National Accounts, can be accessed by selecting Themes/Economy/National Accounts/Articles & Research Papers/5206.0.

GRAPH 1. MOVEMENTS IN SELECTED EXCHANGE RATES
Graph: MOVEMENTS IN SELECTED EXCHANGE RATES




EXPORT CURRENCIES

Table 2 lists the major invoice currencies used for Australia's merchandise exports for the period between March quarter 2004 and March quarter 2005.


At least 95% of Australia's exports were invoiced in either US or Australian dollars in this period. The US dollar was the predominant currency accounting for 69% of export invoices in 2004, and 72% in March quarter 2005. The Australian dollar accounted for 26% of export invoices across the five quarters.


The Euro and NZ dollar were the only other currencies with a share of more than 1% in each of these quarters. The proportion of merchandise goods exports invoiced to the UK pound sterling declined from 1% in March quarter 2004, to 0.8% in March quarter 2005.

TABLE 1. INVOICE CURRENCIES FOR EXPORTS

Invoice Currency
Mar Qtr 2004
Jun Qtr 2004
Sep Qtr 2004
Dec Qtr 2004
Mar Qtr 2005

CURRENCY ($million)

US dollar
17,715
20,991
21,673
22,041
20,768
Australian dollar
6,594
7,880
8,118
8,234
7,125
Japanese yen
175
203
288
249
165
Euro
437
391
359
341
326
NZ dollar
324
352
344
421
330
UK pound sterling
252
300
309
272
242
Other
20
15
18
111
98
Total
25,517
30,132
31,109
31,669
29,054

CONTRIBUTION (%)

US dollar
69.4
69.7
69.7
69.6
71.5
Australian dollar
25.8
26.2
26.1
26.0
24.5
Japanese yen
0.7
0.7
0.9
0.8
0.6
Euro
1.7
1.3
1.2
1.1
1.1
NZ dollar
1.3
1.2
1.1
1.3
1.1
UK pound sterling
1.0
1.0
1.0
0.9
0.8
Other
0.1
-
0.1
0.4
0.3
Total
100.0
100.0
100.0
100.0
100.0

- nil or rounded to zero (including null cells)



EXPORT COMMODITIES

Table 3 summarises the invoice currencies used for Australia's major exports (by SITC division) between March quarter 2004 and March quarter 2005.


There were marked differences in the invoice currencies used for selected commodity groups. The US dollar was the currency of choice for the resources sector where 99% of export shipments of non-monetary gold (SITC 97), 98% of export shipments of natural and manufactured gas (SITC 34) and 95% of export shipments of coal, coke and briquettes (SITC 32) were invoiced in US dollars.


The Australian dollar was the predominant invoice currency for several commodity groups, where 77% of export shipments of medicinal and pharmaceutical products (SITC 54), 59% of export shipments of beverages (SITC 11) and 62% of miscellaneous manufactured articles n.e.s. exports (SITC 89) were invoiced in Australian dollars.


For a small number of commodity groups, other currencies were used for a significant proportion of exports, with 11% of road vehicle exports (SITC 78) invoiced in NZ dollars and 19% of beverages (SITC 11) invoiced in the UK pound sterling. This reflects significant export destinations for these commodity groups.

TABLE 2. EXPORT INVOICE CURRENCIES FOR SELECTED SITC DIVISIONS, Percentage Contributions - March quarter 2004 to March quarter 2005

SITC code Description
Value ($m)
$US
$AUS
Euro
$NZ
Yen
UK pound sterling
All other

01 Meat and meat preparations
8,068
58.0
37.5
0.8
0.4
1.6
1.4
0.3
02 Dairy products and birds' eggs
2,931
64.9
33.2
0.7
0.4
0.5
0.3
-
04 Cereals and cereal preparations(a)
7,511
89.1
7.8
2.3
0.1
0.5
0.1
0.1
11 Beverages
3,455
16.3
59.0
2.8
1.6
0.2
18.6
1.5
26 Textile fibres and their wastes
4,186
62.2
32.2
5.0
-
0.1
0.4
0.1
28 Metalliferous ores and metal scrap(a)
20,633
91.2
8.7
0.1
-
-
-
-
32 Coal, coke and briquettes
17,342
94.7
5.1
-
-
0.1
-
0.1
33 Petroleum, petroleum products and related materials
8,961
78.1
21.9
-
-
-
-
-
34 Gas, natural and manufactured
4,257
98.0
2.0
-
-
-
-
-
54 Medicinal and pharmaceutical products
3,249
11.0
77.4
2.0
4.1
0.7
4.1
0.7
68 Non-ferrous metals
9,441
94.3
5.4
-
0.2
-
-
0.1
78 Road vehicles (incl air-cushion vehicles)
4,755
60.1
27.1
0.4
10.7
0.8
0.9
-
89 Miscellaneous manufactured articles n.e.s.
2,366
23.8
62.1
1.0
7.0
0.4
5.0
0.7
97 Gold, non-monetary (excl gold ores and concentrates)
6,990
99.2
0.8
-
-
-
-
-
Other
43,336
46.8
45.6
2.7
2.0
1.9
0.7
0.3
Total
147,481
70.0
25.7
1.3
1.2
0.7
0.9
0.2

- nil or rounded to zero (including null cells)
(a) Excludes export commodities subject to a confidentiality restriction. These are classsified to SITC98 and reported in "other".



IMPORT CURRENCIES

Table 4 shows the major invoice currencies used for Australia's merchandise imports for the period between March quarter 2004 and March quarter 2005.


The US dollar was again the predominant currency, although less so than for exports, with 50% of imports invoices written in US dollars. The Australian dollar was the second most significant invoice currency over the period, accounting for 32% of imports invoices, on average. The Euro (9%), Japanese yen (3%) and UK pound sterling (2%) were the next most significant invoice currencies.


Of the imports shipments received between March quarter 2004 and March quarter 2005, 98% were invoiced to one of the eight currencies listed in Table 4.

TABLE 3. INVOICE CURRENCIES FOR IMPORTS

Invoice Currency
Mar Qtr 2004
Jun Qtr 2004
Sep Qtr 2004
Dec Qtr 2004
Mar Qtr 2005

CURRENCY ($ million)

US dollar
15,009
17,550
19,468
20,226
17,447
Australian dollar
10,331
11,243
11,869
11,909
11,465
Japanese yen
932
912
1,017
1,053
936
Euro
2,875
3,069
3,337
3,612
3,406
UK pound sterling
656
625
707
720
612
New Zealand dollar
383
417
460
508
434
Hong Kong dollar
140
149
188
169
141
Singapore dollar
272
257
194
118
94
Other
622
657
687
790
655
Total
31,220
34,880
37,928
39,105
35,190

CONTRIBUTION (%)

US dollar
48.1
50.3
51.3
51.7
49.6
Australian dollar
33.1
32.2
31.3
30.5
32.6
Japanese yen
3.0
2.6
2.7
2.7
2.7
Euro
9.2
8.8
8.8
9.2
9.7
UK pound sterling
2.1
1.8
1.9
1.8
1.7
New Zealand dollar
1.2
1.2
1.2
1.3
1.2
Hong Kong dollar
0.4
0.4
0.5
0.4
0.4
Singapore dollar
0.9
0.8
0.5
0.3
0.3
Other
2.0
1.9
1.8
2.0
1.9
Total
100.0
100.0
100.0
100.0
100.0



IMPORT COMMODITIES

Table 5 summarises the invoice currencies used for Australia's major imports (by SITC division) between March quarter 2004 and March quarter 2005.


A small number of commodity groups were dominated by invoices in US dollars, with almost 100% of imports shipments of petroleum, petroleum products and related materials (SITC 33), 79% of imports of transport equipment (excluding road vehicles) (SITC 79), 75% of office machines and automatic data processing machines (SITC 75) and 64% of imports of iron and steel (SITC 67) invoiced in US dollars.


The Australian dollar was the predominant invoice currency for several commodity groups, with 82% of import shipments of medicinal and pharmaceutical products (SITC 54), 71% of road vehicle imports (SITC 78) and 52% of imports of paper, paperboard and articles thereof (SITC 64) were invoiced in Australian dollars.


The Euro was the third most significant invoice currency accounting for 27% of machinery specialised for particular industries (SITC 72) and 22% of general industrial machinery and equipment n.e.s imports (SITC 74). The Japanese yen was the invoice currency for 9% of machinery specialised for particular industries (SITC 72), and 7% of road vehicles (SITC 78). Singapore dollars accounted for 14% of invoices for non-monetary gold (SITC 97), and 7% of invoices for imports of articles of apparel and clothing accessories (SITC 84).

TABLE 4. IMPORT INVOICE CURRENCIES FOR SELECTED SITC DIVISIONS, Percentage Contributions - March quarter 2004 to March quarter 2005

SITC
code Description
Value ($m)
$US
$AUS
Euro
$NZ
Yen
UK pound sterling
$Sing
$HK
All other

33 Petroleum, petroleum products and related
materials
16,118
99.7
0.2
0.1
-
-
-
-
-
-
51 Organic chemicals
3,313
54.1
39.7
3.6
0.1
0.6
1.4
0.1
-
0.4
54 Medicinal and pharmaceutical products
8,276
11.9
81.8
3.7
0.5
0.1
0.1
0.1
0.1
1.7
64 Paper, paperboard, and articles thereof
3,124
33.3
51.9
9.5
1.6
0.8
0.6
0.7
0.5
1.1
65 Textile yarn, fabrics, made-up articles n.e.s.
and related products
3,039
62.0
18.0
11.4
2.7
1.5
1.7
0.1
2.1
0.5
67 Iron and steel(a)
3,334
63.8
19.7
6.9
1.0
2.0
1.1
0.5
-
5.0
69 Manufactures of metals, n.e.s(a)
4,368
51.3
24.3
14.3
1.8
1.6
2.8
0.3
0.7
2.9
71 Power generating mechinery and equipment
3,975
43.8
29.3
13.6
1.0
4.2
3.0
0.2
-
4.9
72 Machinery specialised for particular
industries
6,954
36.4
18.5
27.0
1.1
9.1
3.8
0.2
-
3.9
74 General industrial machinery and equipment,
n.e.s. and machine parts, n.e.s.
9,592
41.8
23.9
21.7
1.4
5.1
2.6
0.5
0.3
2.7
75 Office machines and automatic data
processing machines
10,098
75.0
19.7
1.2
0.4
2.3
0.5
0.3
-
0.6
76 Telecommunications and sound recording
and reproducing apparatus and equipment
10,233
42.7
47.0
4.1
0.2
3.5
1.7
0.2
-
0.6
77 Electrical machinery, apparatus, appliances,
and related parts(a)
9,345
51.0
25.2
16.0
1.0
1.9
2.6
0.3
0.2
1.8
78 Road vehicles (incl air-cushion vehicles
23,175
13.6
70.6
7.5
0.3
6.9
0.6
-
-
0.5
79 Transport equipment (excl road vehicles)
5,292
78.6
11.0
4.9
0.6
0.5
2.4
0.5
0.1
1.4
84 Article of apparel and clothing accessories
4,691
54.1
18.0
4.1
2.4
0.1
0.7
6.9
0.1
13.6
87 Professional, scientific and controlling
instruments and apparatus n.e.s.
4,327
47.4
24.7
15.1
1.0
2.6
5.4
0.6
0.1
3.1
89 Miscellaneous manufactured articles n.e.s.
9,221
50.2
26.6
9.2
1.8
1.5
6.0
0.4
1.5
2.8
97 Gold, non-monetary (excl gold ores and
concentrates)
3,006
50.2
0.7
0.2
9.1
-
-
14.2
-
25.6
Other
34,759
53.1
27.6
11.9
2.3
1.9
2.1
0.5
0.4
0.2
Total
178,323
50.3
31.9
9.1
1.2
2.7
1.9
0.5
0.4
1.9

- nil or rounded to zero (including null cells)
(a) Excludes import commodities subject to a confidentiality restriction. These are classsified to SITC 98 and reported in "other".



HISTORICAL COMPARISON

Table 6 shows the proportion of exports and imports invoiced in the major currencies for the last five calendar years. Over this period, trends in the data are more readily apparent.


The proportion of merchandise exports invoiced in US dollars remained relatively unchanged over this period, increasing from 68% in 2000 to 69% in 2004. The proportion of merchandise exports invoiced in Australian dollars fell slightly from 29% in 2000 to 26% in 2004.


The proportion of merchandise imports invoiced in Euro grew from 2% in 2000 to 9% in 2004. This reflects the move from national European currencies to the Euro. Although the proportion of exports invoices written in Japanese yen remained constant, the imports invoice share fell from 5% in 2000 to 3% in 2004.

TABLE 5. EXPORTS AND IMPORTS BY INVOICE CURRENCIES

2000
2001
2002
2003
2004
Invoice Currency
%
%
%
%
%

EXPORTS

US dollar
68
68.8
67.9
67.5
69.4
Australian dollar
28.6
27.7
27.6
27.8
26.2
Japanese yen
0.8
0.9
1.0
0.9
0.8
Euro
0.3
0.5
1.4
1.4
1.3
New Zealand dollar
0.7
0.8
1.1
1.4
1.3
UK pound sterling
0.9
0.9
0.8
0.9
0.9
Other
0.3
0.4
0.2
0.1
0.1
Total
100.0
100.0
100.0
100.0
100.0
Total exports ($m)
110,686
123,063
119,478
108,318
118,427

IMPORTS

US dollar
51.4
49.5
50.1
47.9
49.8
Australian dollar
28.3
30.7
30.6
32.6
32.1
Japanese yen
5.2
4.4
4.0
3.6
2.8
Euro
2.3
4.8
8.7
9.4
9.1
New Zealand dollar
1.3
1.3
1.3
1.3
1.3
UK pound sterling
3.1
2.4
2.1
1.9
1.9
Hong Kong dollar
0.7
0.6
0.6
0.5
0.5
Singapore dollar
0.4
0.6
0.5
0.8
0.6
Other
7.3
5.7
2.1
2.0
1.9
Total
100.0
100.0
100.0
100.0
100.0
Total imports ($m)
118,789
119,702
129,468
131,656
143,133



APPENDIX

MEASUREMENT of INVOICE CURRENCIES

Information on the invoice currencies used in export and import transactions is collected by the Australian Customs Service (Customs) and passed to the ABS with other merchandise trade information.


The ABS receives the exports data (including invoice currencies) as reported to Customs and converts values reported in foreign currencies to Australian dollars using the exchange rate prevailing on the date of departure of the goods from Australia.


For exports prior to October 2004, Customs permitted goods invoiced in US dollars, Japanese yen, UK pound sterling, Euro and NZ dollars to be reported in those currencies. In October 2004 the range of currencies able to be reported on export clearance documents rose to twenty eight. As transactions invoiced in the non-permitted currencies are converted to Australian dollars by the exporter, the increase in the number of permitted currencies may reduce the proportion of export invoices reported in Australian dollars for December quarter 2004 and future periods.


For imports, the value of the goods is reported to Customs 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.


While the statistics in this article are based on currencies converted to Australian dollars at exchange rates applicable on the day of shipment, the Australian exporter or importer may undertake the conversion for the actual receipt or payment using a different exchange rate, or one applying on a different day. Some exporters and importers hedge exchange rates meaning that the effective exchange rate applied to a transaction may differ from the prevailing exchange rate.


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