Record trade surplus for 2016-17 despite Cyclone Debbie
Queensland’s trade surplus on goods and services narrowed to $6.6 billion in the June quarter based on the latest Balance of Payments data released by the ABS. The trade surplus hit a record high of $9.5 billion in December 2016 but has since declined 30 per cent during the first half of 2017.
Export performance has been hampered during 2017 by the destruction caused by Cyclone Debbie. Along with the impact to agricultural production and tourism arrivals, the cyclone left significant damage to the Central Queensland coal network and hampered efforts to move mine output to the ports. Aurizon, which owns the Central Queensland Coal Network, estimated 16 million tonnes (mt) of coal volumes were lost during FY17 due to the cyclone.
Overall, the value of goods and services exported during June fell 7.7 per cent over the previous quarter to $20.6 billion. The decline in the value of exports could have been more severe were it not for the sale of coal stockpiles held at the ports, the steep rise in coal prices and increased LNG production coming out of Gladstone.
While the value of exports fell by 7.7 per cent during the quarter, the volume of goods and services exported only declined by a more modest 1.2 per cent. This indicates that the continued ramp up of output by the LNG industry helped offset some of the losses in coal exports. Services exports on the other hand rebounded during this latest quarter following declines during the December and March quarters. It appears international education is a big factor here with international student enrollments expanding 13 per cent during the first half of 2017 (compared to the corresponding period the year prior).
Overall, the trade surplus was $29.6 billion during the 2016/17 period, more than double the previous year’s figure of $12.5 billion. With further growth in LNG exports to come and short-term coking coal prices defying long-term expectations of a return back towards the low US$100/t range, the government’s budget should receive a nice little boost from minerals royalty receipts.