International Trade Price Indexes, Australia methodology

This publication contains indexes measuring changes in the prices paid for imports of merchandise that are landed in Australia each quarter, and prices received for exports of merchandise that are shipped from Australia each quarter (including re-exported goods which are imported into Australia then exported without alteration). The Import Price Indexes are in tables 1-6 and the Export Price Indexes are in tables 7-11.

The indexes are calculated on the index reference period 2011-12 = 100.0.

The ITPI are used by the government and private sector for a variety of purposes, including:

• as deflators in the Australian National Accounts and Balance of Payments;
• as a short-term indicator of inflationary trends;
• for indexation in legal contracts in both the public and private sectors;
• to inform business and government policy decisions; and
• by international organisations such as the OECD and the IMF for economic monitoring and comparison.

Price indexes published by the Australian Bureau of Statistics (ABS) provide summary measures of the movements in various categories of prices over time. They are published primarily for use in Government economic analysis. Price indexes are also often used in contracts by businesses and government to adjust payments and/or charges to take account of changes in categories of prices (Indexation Clauses).

Use of Price Indexes in Contracts sets out a range of issues that should be taken into account by parties considering including an Indexation Clause in a contract using an ABS published price index.

The Import Price Index excludes the following items (representing less than 2% of the value of merchandise imported during the weighting period) because of the inherent difficulties in pricing the items to constant quality (see under Price measurement, below):

• live animals (not for food)
• jewellery and other articles of precious metal, n.e.s.
• military equipment
• commodities not classified according to kind
• works of art, collectors' pieces, antiques
• railway vehicles
• ships of various types.
   

The Export Price Index includes re-exports of merchandise (i.e. goods which are imported into Australia and exported at a later date without physical transformation).

Index numbers for selected sections of the Standard International Trade Classification (SITC) are provided in table 1, 3 and 12 (Import Price Index) and table 7 and 9 (Export Price Index). The SITC (Revision 4) used from the September quarter 2008 onwards is the United Nations' updated version, replacing SITC (Revision 3). SITC (Revision 4) retains the overall structure of SITC (Revision 3) and consists of the same number of sections, divisions and groups. Changes to the classification labels and components were made at levels lower than those used in the Import and Export Price Indexes. As a result, there has been no material impact on the indexes, which remain comparable across the changes in classification.

The Import Price Index is also presented by Balance of Payments Broad Economic Categories in tables 4-6, which have been disaggregated into Balance of Payments groupings of Consumption goods, Capital goods and Intermediate and other merchandise goods. From the September quarter 2008 onwards, the previous heading of Classification of Broad Economic Categories (BEC) End Use, has been replaced with Balance of Payments Broad Economic Categories. This is simply a name change, with the series remaining comparable to previously published series.

The Export Price Index is also presented by Balance of Payments Classification of Exports groupings in tables 10 and 11.

The Import Price Index and Export Price Index are annually reweighted chained Lowe indexes. This method of weighting was introduced for the September quarter 2000 and replaced the 'fixed-base' method of weighting in which the weighting patterns were updated infrequently (generally once every 5 or 10 years).

The annual reweighting and chaining process involves a number of steps to implement new weights for the Import and Export Price Indexes. The current weighting basis for the Import Price Index is derived from the value of import items during 2025-26. The weighting basis for the Export Price Index is generally derived using the average value of export items during 2024-25 and 2025-26, to account for volatility in export prices. This method can overstate the weight of products which are decreasing rapidly in export value and are expected to stabilize in the future. Accordingly, the weight for Lithium (SITC 27) in the Export Price Index has been derived from its export value during 2025-26 only. The Import Price Index and Export Price Index weights were then revalued to reflect June quarter 2026 price levels. Indexes using the new weights for the September quarter 2026 were linked to the published June quarter 2026 (link period) levels, which were derived using weights from the previous series. The index reference period for each series continues to be 2011-12 = 100.0.

The commodities directly represented in each index (the index items) have been selected on the basis of the significance of their import and export values in the period 2025-26 for imports and 2024-25 and 2025-26 for exports. All significant commodities have been selected for pricing. The weights for minor commodities which are not directly priced are included with those of comparable directly priced products, where prices are likely to move in a similar way.

In general, prices of individual shipments are obtained from major importers and exporters of the selected items and relate to the quarter in which the imported goods physically arrive in Australia and the exported goods physically leave Australia.

Imports are priced on a 'free on board' (f.o.b.), country of origin basis. Therefore freight and insurance charges involved in shipping goods from foreign to Australian ports are excluded from the prices used in the index, as are Australian import duties and taxes. Similarly, exports are priced on a f.o.b. basis at the main Australian ports of export. Exports are exempt from taxes on products.

The Import Price Index and Export Price Index employ the use of exchange rates where the contractual currencies of transactions are recorded in currencies other than Australian dollars. While a proportion of Australia’s international trade is conducted in Australian dollars, those that are traded in foreign currencies require conversion to Australian dollars. Hence changes in the relative value of the Australian dollar against overseas currencies (in particular, the major trading currencies such as the United States dollar, Japanese yen, Pound sterling and Euro) has a direct impact on the price of products purchased or sold in foreign currencies. That is, when the Australian dollar appreciates, it buys more foreign currency, and the Australian dollar commodity price falls. Conversely, when the Australian Dollar depreciates, it buys less foreign currency and the Australian dollar price of the commodity rises. As noted, imports are priced on a country of origin basis. Therefore the exchange rates applied are impacted by the differences between the date of transaction (ownership change) and the shipping time from the country of origin to Australia.

The main pricing methodology used is specification pricing, under which a manageable sample of precisely specified products is selected, in consultation with each reporting business, for repeat pricing. In specifying the products, care is taken to ensure that they are fully defined in terms of all the characteristics which influence their transaction prices. As such, all the relevant technical characteristics need to be described (e.g. make, model, features) along with the unit of sale, type of packaging, conditions of sale (e.g. delivered, payment within 30 days), etc. The goods are also specified by country and market in order to lessen the impact of price variations attributable solely to changes over time in the mix of countries, or markets.

When the quality or specifications of an item being priced change over time, adjustments are made to the reported prices so that the index captures only pure price change. That is, any element of price change attributable to a change in quality is removed. If there is an increase (decrease) in the quality of an item, then the price index is adjusted downwards (upwards) to reflect the 'worth' of the quality change. This technique is known as pricing to constant quality.

Wherever possible, prices from volume selling products being traded with predominant countries, or markets, are obtained to ensure specifications have a good chance of being re-priced over time and index series are representative of overall price movements. Individual product weights and weights between markets and countries are regularly reviewed to keep the indexes up to date. The ABS has access to a rich source of international merchandise trade data and selectively uses average unit values in the Export Price Index, and to a limited extent in the Import Price Index, to augment specification pricing. Imported commodities are typically more stable in price but non-homogenous in character, and generally do not lend themselves to measurement by average unit value.

Since December quarter 2024, a number of International Trade Price indexes have utilised the multilateral method in conjunction with specification pricing to calculate quarterly price movements. The multilateral method uses the customs declarations submitted by exporters and importers or their agents to the Department of Home Affairs (Home Affairs). This trade data contains numerous attributes for every product imported and exported. This allows a product to be assigned a unique ID based on commodity classification, respondent name, country of origin/destination, unit of quantity and description of goods, for the purpose of measuring each individual traded product’s price change over a certain window. These product attributes ensure price changes are based on constant quality over time. If the description of the product changes, the product will be assigned a new unique ID and therefore be dissociated from the other product.

Each ID is grouped within an Expenditure Aggregate (EA) by the reported commodity code, with the unit value for each ID calculated by dividing the total value by the total quantity for each month of reporting. This data is then used as an input to the multilateral method of index calculation known as Fixed Effects Window Splicing (FEWS). The FEWS index calculates the price change for each item, compared to itself over a 27-month time frame (window).  For a product to contribute to the index, it must have at least two price observations in each window.  The current quarter coefficient will join, or splice, on to the previous index to give a movement for the current quarter.

The multilateral index method captures prices for a broader range of products and a greater proportion of Australia’s trade than is possible via specification pricing. Multilateral indexes also incorporate transactions across all three months of the quarter, capturing volatility, and improving the quality of the indexes while also reducing the burden on businesses that provide data for the survey.  

Index numbers for financial years are simple averages of the relevant quarterly index numbers.

Any discrepancies between totals and sums of components in this publication are due to rounding.

Movements in indexes from one period to another can be expressed either as changes in index points or as percentage changes. Percentage changes are calculated to illustrate three different kinds of movements in index numbers:

• movements between consecutive financial years (where the index numbers for financial years are simple averages of the quarterly index numbers);
• movements between corresponding quarters of consecutive years; and
• movements between consecutive quarters.
   

Care should be exercised when interpreting quarter-to-quarter movements in the indexes, as short-term movements do not necessarily indicate changes in trends.

The following example illustrates the method of calculating index points changes and percentage changes between any two periods:

Export Price Index, All groups index number:
September quarter 2026 162.5 (see table 7)
less June quarter 2026 160.3 (see table 7)
Change in index points 2.2
Percentage change 2.2/160.3 x 100 = 1.4%

Tables 2 and 8 provide analyses of the contribution which SITC sections and divisions make to the All groups Import Price Index and Export Price Index, respectively.

The ITPI is released by the ABS within a broader set of macroeconomic statistics. There are differences between the Export Price Index and Import Price Index presented in this publication, and the export and import of goods Implicit Price Deflator (IPD) presented in Australian National Accounts: National Income, Expenditure and Product and Balance of Payments and International Investment Position, Australia. These differences are mainly due to the index methodology. The ITPI are annually weighted indexes whereas IPDs are quarterly weighted indexes, which include price change and compositional change from period to period. These differences can result in significant divergences between the measures when prices of commodities are volatile.

The ITPI are released each quarter (three months ending March, June, September and December). The data are released no later than 33 days after the end of the reference quarter.

The Import Price Index, Australia and Export Price Index, Australia are important economic statistics with each measure having a considerable history. The first index of import prices produced by the ABS was introduced in May 1983 and an index of export prices, of one form or another, has been published by the ABS since 1901.

The Import and Export Price Indexes were published separately until March quarter 2001. Starting from June quarter 2001, the publications were integrated and the key series published in International Trade Price Indexes, Australia. 

Further information on recent price index developments in the ABS is presented in the following publications:

September 2025, expansion of the use of multilateral index methods

• International Trade Price Indexes, September 2025

December 2024, introduction of multilateral index methods on a small number of indexes

• International Trade Price Indexes, December 2024

Detailed information, including a range of time series spreadsheets, can be found in the 'Data downloads' section of the International Trade Price Indexes, Australia webpage. For links to data and publications relating to the Producer Price Indexes and other price indexes, please see Price Indexes and Inflation.

For further information on price indexes in the ABS refer to the following publications:

• Producer and International Trade Price Indexes: Concepts, Sources and Methods
• Information Paper: Changes to Time Series Spreadsheets for Producer Price Indexes, Australia
• Update on ANZSIC 2006 Implementation for Producer and International Trade Price Indexes
• Information Paper: Review of the Producer and International Trade Price Indexes
• Information Paper: Outcome of the Review of the Producer and International Trade Price Indexes
• Implementation of the Review of the Producer and International Trade Price Indexes
• Information Paper: An Analytical Framework for Price Indexes in Australia
• Information Paper: Producer Price Index Developments
• Information Paper: Review of the Import Price Index and Export Price Index, Australia
• Information Paper: Price Indexes and The New Tax System

Users may also wish to refer to the following related publications, which are available from the ABS website:

• Australian National Accounts: Input-Output Tables
• Balance of Payments and International Investment Position, Australia
   

Current publications and other products released by the ABS are listed on the ABS website. The ABS also has a Release Calendar on the website which details future releases Monthly calendar | Australian Bureau of Statistics. 

The ABS Privacy Policy outlines how the ABS will handle any personal information that you provide to us.