INTERNATIONAL TRADE PRICE INDEXES
IMPORT PRICE INDEX
The import price index measures changes in the prices of imports of merchandise landed in Australia, based on their free-on-board (f.o.b.) prices in the country of origin. The index numbers for each quarter relate to prices of imports landed in Australia during the period.
The main uses of the import price index are as deflators for the production of chain volume estimates, as a guide to future inflationary trends for macro-economic purposes and the indexation of business contracts.
The commodities represented cover about 95% of merchandise imports.
This series has a reference base of 1989-90 = 100.0. From the early-1990s until 2000, the weights were based on the average value of merchandise imports landed in Australia during 1988-89 and 1989-90. In 1999 a review of the index was undertaken with the findings published in Information Paper: Review of the Import Price Index and Export Price Index, Australia, 1999 (6424.0). One of the results of the review was a move to an annually reweighted chain index. Each September quarter the weights of the index are updated to reflect the average value of merchandise imports landed in Australia in the previous financial year. These have been released in the publication International Trade Price Indexes, Australia (6457.0) from the June quarter 2001.
Table 28.17 provides All groups import price index numbers. Import price index numbers based on the Standard International Trade Classification Revision 3 (SITC Rev. 3) are contained in table 30.24 in the International accounts and trade chapter.
EXPORT PRICE INDEX
The index measures changes in the prices of all exports of merchandise from Australia, including re-exports (goods which are imported into Australia then exported without alteration). The index numbers for each quarter relate to the prices of exports actually shipped during that quarter.
This series has a reference base of 1989-90 = 100.0. Commencing with the September quarter 2000, it is reweighted annually and chained. Under the chaining process, new weights are introduced in each September quarter. An average of the export values for the latest two years is used each year to derive the new weights. The indexes have been released in the publication International Trade Price Indexes, Australia (6457.0) from the June quarter 2001.
The commodities represented constitute approximately 95% of the total value of exports from Australia.
In general, prices are obtained from the major exporters of the selected commodities included in the index. The prices used in the index are the prices at which the goods physically leave Australia, that is, the prices are f.o.b. at the main Australian ports of export.
As the prices used in the index are expressed in Australian currency, changes in the relative value of the Australian dollar against overseas currencies (in particular, the major trading currencies such as the US dollar, Japanese yen, British pound sterling and the Euro) can have a direct and significant impact on the price movements of the many commodities that are sold in terms of prices expressed in overseas currencies. Forward exchange cover is excluded from the prices used in the index.
The prices collected and used in compiling the index relate to specified standards, grades, types, etc., of each commodity with the aim of incorporating in the index the price changes for exports of representative goods of constant quality. Wherever possible, prices to specific major export markets are used for each of the goods priced, in order to lessen the impact of price variations attributable solely to changes in market destinations. In most cases, prices are combined using fixed weights between markets. Weights between markets are reviewed from time to time and revised where necessary.
Table 28.17 provides All groups export price index numbers. Export price index numbers based on the Standard International Trade Classification Revision 3 (SITC Rev. 3) are contained in table 30.24 in the International accounts and trade chapter.
28.17 INTERNATIONAL TRADE PRICE INDEXES(a)
Import price index (All groups)
Export price index (All groups)
|(a) Reference base year is 1989-90 = 100.0.
Source: International Trade Price Indexes, Australia (6457.0).