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Rural exports drive improvement in trade balance.

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Media release

1 March 2004 - MVT13/2004

Rural Exports Drive Improvement in Trade Balance

The January 2004 International Trade in Goods and Services data show a welcome improvement in exports, driven by rural exports, Trade Minister Mark Vaile said today.

In seasonally adjusted terms, Australia’s exports of goods and services rose by $525 million, a strong five per cent. Rural exports increased by $263 million, a rise of 14 per cent.

Higher wheat exports were one of the main contributors to the rise in rural exports with cereal grains and cereal preparations rising by 21 per cent in seasonally adjusted terms.

“Improved weather conditions are likely to see rural export volumes improve over the course of 2003-04 as grain exports, in particular, recover from the drought,” Mr Vaile said.

According to the February ABARE Crop Report, Australia’s winter crop is forecast to be a record 39.4 million tonnes in 2003-04, up 22.4 million tonnes on last year’s crop. (1 of 2) [3/03/2004 1:59:02 PM]

Rural Exports Drive Improvement in Trade Balance

The improvement in exports in January 2004 resulted in a balance on trade in goods and services of $1,962 million, a significant improvement on last month’s deficit of $2,554 million.

The trend value of total exports rose for the sixth successive month, as did the trend value of rural exports. This has occurred despite the substantial appreciation of the Australian dollar.

“A two per cent rise in services exports in seasonally adjusted terms also helped the export performance in January. Pleasingly, the trend value of services exports reached another record level and has risen for eight consecutive months,” Mr Vaile said.

“Australian exports have been operating in a tough environment over the past year with the drought, the appreciation of the Australian dollar and, until recently, weak global demand.

“It is pleasing that today’s release reflects strengthening signs of a return to growth for our exports.”

The OECD’s most recent Economic Outlook noted that with the global recovery underway and the drought likely to break, Australia’s export volumes are projected to increase by 7.1 per cent in 2004 and 9.1 per cent in 2005.

Media contact: Matthew Doman (Canberra) +612 6277 7420