As per the ABS (Australian Bureau of Statistics), export prices in Australia recorded a rise of 13.5% in Q2 2008, as reported by news.com.au. The export prices increased 13.3% in Q2 2008 - the highest quarterly increase since September 1974. This is due to a rise of 54.2% in prices paid for briquettes, coke and coal, as well as a 27% increase in metal scrap and metalliferous ores. The prices of petroleum products and related materials also rose 18.3%. Meanwhile, the import price index increased by 1.4% in Q2 2008 compared to 2.7% rise during January-March 2008.

Soaring demand for coal and iron ore, particularly in China, is the primary reason for increase in the Australian export prices. Rising prices of iron ore and coal shoot up the cost of goods shipped to the other countries. Moreover, limited supply of coal worldwide from the major suppliers pushed coal prices to more than double, contributing a major share to the overall export revenue in Australia, the largest coal exporter in the world.

Moreover, surging inflation in the country is another key contributor to the rise in export prices. Due to low consumer spending in the domestic market, the Australian manufacturers are forced to export more products abroad. The robust export prices in Australia are also strengthening the country’s terms of trade, leading to growth in its national income and creating more problems for the central bank, which increased the interest rate four times in 2007 in order to control inflation.

Further, high export prices in Australia are safeguarding from rising demand in the country as energy exporters have already agreed to raise prices with their clients in emerging economies.

Surging export prices in Australia are fuelling the economic growth as increased export prices are bringing huge amount of foreign exchange and boosting tax receipts, profits and dividends in the country. However, rise in export prices can lead to a fall in demand for the Australian products, as the importers have to bear extra cost.

Related Market Research Reports:
China Aluminium Market Analysis
UAE Steel Industry Analysis