Exports fell by four per cent in February, seasonally adjusted, which coupled with a flat month for imports pushed the monthly trade deficit beyond $3 billion for the first time, according to the Australian Bureau of Statistics (ABS).
Following the release of the figures, the Australian Institute of Export has called for an urgent review of the federal government’s decision to cut the export market development grants.
"The announcement yesterday that Australia has just recorded its worst trade deficit in history, despite the biggest minerals boom in 50 years, is tragic," the institute’s Lisa McAuley said.
"It begs the question, why would the Government restrict export incentives like the Export Market Development Grant scheme when stimulation is exactly what’s needed? This year alone the scheme will fall $28 million behind and next year we predict will be worse.
"Despite the government’s announcement of a further $50 million two years out, this will not be enough. Surely this needs a ‘call to action’ now, not in six months time when the Governments review of export policies and programs is completed."
The February balance of goods and services was above the median market forecast of $2.5 billion. Exports of metal ores and minerals fell by $624 million, or 18 per cent, in February, seasonally adjusted, while exports of coal, coke and briquettes dropped by $281 million, or 15.9 per cent.
Floods in north Queensland and a tropical cyclone off the Western Australian coast halted the production and exports of coal and iron ore.
Rio Tinto Ltd, the world’s third largest mining company, stopped work at its Hail Creek coal mine west of Mackay in central Queensland due to the torrential rain. The company also suspended shipments of iron ore at its Dampier and Cape Lambert ports in north-west Western Australia because of the category two tropical cyclone Cyclone Nicholas.
Cyclone Nicholas also caused oil and gas production facilities off the coast of Western Australia to be closed.
Weaker demand from China has added to the squeeze on exports as contract price negotiations take place.
On the agricultural front, recent rain has resulted in a one per cent increase in the exports of rural goods.
Imports were flat, seasonally adjusted, despite falling in 14 of the 29 categories measured by the ABS.