REVISIONS TO COAL AND IRON ORE PRICES
REVISIONS TO COAL AND IRON ORE PRICES
Goods exports data presented in this publication are primarily based on information provided by exporters to the Australian Customs Service. At the time of export, the final valuation details are not known for some commodities and exporters have six months to finalise their Customs entries. The late finalisation of recent contract price negotiations for coal and iron ore meant that more entries than usual for these commodities were lodged without the final valuation being certain.
As a result the recorded trade series for coal and iron ore from April 2008 have not fully reflected the expected final unit prices. However, adjustments have been included in the respective balance of payments series for the April to July 2008 months to account for the delay in finalising the Customs entries. The adjustments are reviewed each month as revised Customs entries are lodged and as other information (e.g. company statements) become available.
The adjustments for both coal and iron ore reflect the expected contract price increases based on the pattern of revisions that have occurred in past years where contracted prices have been backdated.
In this issue, the April to June 2008 adjustments for coal and iron ore prices have been reduced for the revisions in Customs entries where new contract prices have replaced old prices and for updated expectations of the level and timing of further revisions. The remaining adjustments included in this issue for coal are $200m for both April and May and $100m for June. For iron ore the remaining adjustment for April, May and June is $300m for each month with a $100m adjustment for July.
Revising the adjustments for updated expectations of the level and timing of further revisions to Customs entries has reduced goods credits for the June quarter 2008 by about $600m.
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