Dollar spurs volume increases, price declines: StatsCan

OTTAWA — Both international merchandise imports and exports continue to fluctuate in reaction to Canada’s appreciated dollar.

In constant dollar terms, volumes for imports rose 2.7 percent as prices declined 4.6 percent. Meanwhile, export volumes were up 1.9 percent and prices fell 2.4 percent, reports Stats Canada.

Nevertheless, for the first 10 months of 2007, both imports and exports were higher than for the same period in 2006.

As a result, the trade surplus with the world expanded to $3.3 billion in October, up from a revised $2.8 billion in September, which was the lowest level since February 1999.

The trade surplus with the United States, though, narrowed to $6.2 billion –its lowest level since October 2006 — as exports fell more sharply than imports.

Machinery and Equipment Imports rise Amidst Declines in All Other Sectors:
Imports of energy products plunged 11.5 percent to $2.8 billion, completely reversing their gain in September and falling to their lowest level since February.

Petroleum and coal products accounted for the bulk of the decline, dropping 28.2 percent to $603.4 million. In anticipation of the winter driving season, refineries have switched to winter blend gasoline, which is cheaper to produce. The strong Canadian dollar has also exerted downward pressure on wholesale gasoline prices.

Industrial goods and materials dropped 5.1 percent to $6.8 billion, following declines in all sub-sectors. Organic chemicals registered the largest drop, falling 17.1 percent. This group has fallen 36.4 percent in the last three months after reaching record levels in July.

Other consumer goods declined 2.5 percent to $4.5 billion. Miscellaneous consumer goods, such as televisions, radios and house furnishings, were largely responsible for the drop.

Machinery and equipment was the sole sector to record a rise in imports in October, edging up 0.3 percent to $9.7 billion. Industrial and agricultural machinery recorded its highest level in 11 months as excavating machinery peaked and agricultural machinery rose for the fourth month in a row, reports Stats Canada.

Exports Still Falling:

Exports edged down for the third consecutive month in October, with decreases in agricultural, fishing products and energy products leading the decline.

The agricultural and fishing products sector continued its descent, falling 5.1 percent to $2.7 billion. Canola exports plunged 45.1 percent, with volumes dropping significantly, while wheat also declined (-8.2%). These declines were offset somewhat by a second month of soaring exports of barley to various overseas destinations that prefer it for livestock feed.

Automotive products fell 1.0 percent to $6.2 billion, as exports of motor vehicle parts dropped for the third consecutive month.

Industrial goods and materials slipped 0.6 percent to $8.2 billion, the third monthly decrease after setting a record in July. This reflected weaker exports of metals and alloys as well as chemicals, plastics and fertilizers. Aluminum accounted for the bulk of the decline, followed by organic chemicals.

However, just like imports, machinery and equipment rose slightly by 1.9 percent to $7.7 billion, boosted by exports of aircraft and other transportation equipment, which rebounded 24 percent after hitting its lowest level since January 2000 in September.