Record collapse for car, petrol imports

Car and petrol imports collapsed, while booming iron ore exports were not enough to prevent another drop in Australia’s exports in May.

Cars wait on the bitumen at the Port of Brisbane. Photo: Claudia Baxter

The COVID-19 crisis triggered a record collapse in the imports of cars and petroleum in May, while still booming iron ore exports were not enough to prevent another monthly drop in the value of exported goods.

The latest, preliminary international merchandise trade figures from the Australian Bureau of Statistics, showed there was a 40 per cent monthly plunge in the value of imported motor vehicles in May to $1.6bn – only half of May 2019 levels and the lowest figure since April 2011. Car imports dropped 10 per cent in April.

Imports of petroleum plunged by a third in the month to $1.2bn – the lowest in 15 years – to be 64 per cent lower than a year before. Imports of crude petroleum and aircraft fuel were the hardest hit by the decline in demand due to COVID-19 restrictions and lower oil prices, the ABS said.

The falls in petroleum and vehicles drove the overall $2.2bn, or 9 per cent, fall in imports from April’s downwardly revised figure of $21.9bn. The value of imported goods in May was $4.8bn, or 18 per cent, lower than a year earlier.

“Articles of apparel (clothing) also declined substantially as many retailers remained closed due to COVID-19,” the ABS said.

Exports also declined further in May, dropping $1.3bn or 4 per cent to $29.7bn from the revised April’s revised $31.1bn. Year-on-year, the May 2020 figures declined $4.3bn or 13 per cent.

The drop in international good sales was due to “significant” declines in exports of non-monetary gold, coal, and gas, the ABS said.

“The declines in the exports of coal and gas are off the back of reduced demand from some of Australia’s key trading partners.”

But iron ore sales remained strong in May, the ABS said, as supply issues, particularly in Brazil, boosted the price of the commodity above $US100 a tonne. Chinese demand has also remained strong as authorities race to make up for the three months lost to COVID at the start of the year.

“Exports of iron ore account for around a quarter of the value of all Australian exports and the ongoing strength in this commodity continues to prop up Australian exports,” the ABS said.

All figures were not adjusted for inflation or seasonal factors. The official monthly estimate for May will be published on 2 July 2020 in the international goods and services trade numbers.