The trade shortfall was A$965 million ($927 million) compared with a revised A$12 million surplus in April, the statistics bureau said in Sydney today. The median estimate of 24 economists surveyed by Bloomberg News was for a A$900 million gap.
A return to a trade deficit may drag on Australia's $1 trillion economy, which expanded at the slowest pace in almost two years in the first quarter. Households and businesses are paying more for imported gasoline after crude oil surged to a record $144.44 a barrel earlier today.
The Australian dollar traded at 96.19 U.S. cents at 11:42 a.m. in Sydney from 96.29 cents before the report was released. The two-year government bond yield was little changed at 6.88 percent.
Imports rose 6 percent to A$22.8 billion in May from April, today's report showed. Gasoline jumped 17 percent and imports of transport equipment increased 12 percent.
Exports advanced 1 percent to A$21.9 billion in May from April, today's report showed. Agricultural shipments gained 2 percent and coal surged 13 percent.
Rising global demand for natural resources has driven prices for iron ore, coal and other commodities to a record, boosting profits at mining companies BHP Billiton Ltd. and Rio Tinto Group.
Rio Tinto, the world's third-largest miner, said this week it won a price increase of as much as 97 percent for Western Australian iron ore from Asian steelmaker customers, matching an agreement with Chinese mills.
Prices of the 19 commodities in the Reuters/Jefferies CRB Index jumped 29 percent in the six months through June 30, the most since 1973 and more than any second-half gain in at least five years, data compiled by Bloomberg shows.
Prior to April, Australia's trade balance had been in deficit since March 2002, and widened to a record shortfall of A$3.22 billion in February as exporters battled bottlenecks at mines and congestion at ports and railways. The April 2008 balance was revised in today's report to a surplus after having been previously reported as a deficit of A$957 million.
Rising domestic demand for imported goods also suggests businesses and households are weathering interest-rate increases and record gasoline prices.
Retail sales climbed in May at the fastest pace in six months amid a pickup in spending on food, recreational goods, cosmetics and jewelry, a report published yesterday shows.
The central bank left its benchmark interest rate at 7.25 percent this week, saying the highest borrowing costs in 12 years and gasoline prices will slow the economy.