Australia’s Trade Surplus Widens

Australia’s trade surplus unexpectedly widened in February as imports of consumer goods fell and exports of gold surged., Bloomberg 4/2/2009 5:04:31 AM

The trade surplus expanded to A$2.11 billion ($1.47 billion) from a revised A$926 million in January, the Bureau of Statistics said in Sydney today. The median estimate of 18 economists surveyed by Bloomberg News was for A$700 million.

Global demand for resources such as gold, sought by investors seeking to protect their wealth amid a deepening recession, may cushion Australia’s economy even as consumers and businesses cut spending. Central bank Deputy Governor Ric Battellino said this week Australia will remain one of the better-performing economies in the developed world.

Exports rose 4 percent to A$24.9 billion in February, today’s report showed. Gold shipments jumped 55 percent, or by A$784 million. Imports fell 1 percent to A$22.8 billion, led by a 13 percent drop in consumer goods from aboard.

Gold rose to more than $1,000 an ounce in New York in February for the first time in almost a year as investors, spooked by plunging stocks and a global recession, boosted physical demand for the metal.

Gold held in ETF Securities Ltd.’s exchange traded funds rose to 7.32 million ounces, the Jersey, Channel Island’s-based company said on March 30. Zurich-based Zuercher Kantonalbank’s Gold ETF holdings rose to 4.36 million ounces as of March 27, from 4.22 million ounces a week earlier.

The rise in February gold shipments from Australia was almost entirely offset that month by gold imports of A$782 million, HSBC’s Edwards said. Removing the gold transaction, exports were up about 1 percent and imports fell 4 percent.”

There are signs demand for exports may slide in coming months.

Chinese steelmakers, the world’s largest buyers of iron ore, have asked suppliers to temporarily cut prices by 40 percent until an annual contract-price agreement is reached, the China Iron and Steel Association said March 30.

Australia’s Trade Surplus Widens