Development of external trade price indices - 1. quarter of 2005
Product Code: e-7232-05
Development of external trade price indices in the first quarter of 2005
Month-on-month evaluation:
In the first quarter of 2005, the development of external trade prices was determined especially by the following influences that were contrary to each other: firstly, increasing prices of 'mineral fuels, lubricants and related materials' (petroleum in particular) on world markets, which caused increasing of external trade prices and, secondly, appreciation of Czech crown to main foreign currencies that, on the contrary, resulted in decreasing of external trade prices.
Import prices in total did not change month-on-month in average in the first quarter of 2005 (decrease by –1.0% in the fourth quarter of 2004). The biggest increase occurred in prices of 'mineral fuels, lubricants and related materials' (+2.9%, especially petroleum, petroleum products and related materials in relation to the price development on world markets). In comparison with the previous quarter, the growth was +5.6 percentage points. More expensive metals on world markets resulted in an increase of prices of 'crude materials, inedible, except fuels' (+1.5%, metalliferous ores in particular). In comparison with the previous quarter it was an increase by +4.0 percentage points. On the contrary, prices decreased slightly in 'machinery and transport equipment' (already fourth consecutive quarter, this time by –0.5%) and slightly bigger decrease was observed for prices of 'miscellaneous manufactured articles' (-1.5%, i.e. by +0.8 percentage points more than in the previous quarter). In both cases, however, the main reason for lower prices was stronger Czech crown in comparison to main foreign currencies.
Export prices in total decreased month-on-month in average by –0.2% in the first quarter of 2005, i.e. by -0.3 percentage points less than in the previous quarter. Similarly as for import prices, the biggest price increase was in 'mineral fuels, lubricants and related materials' (+2.7%, i.e. by +4.5 percentage points more than in the previous quarter, mainly coal and petroleum products). Prices of 'machinery and transport equipment' decreased by –0.4% (especially office machines and automatic data-processing machines), which was by -0.3 percentage points less than in the previous quarter. Prices of 'manufactured goods classified chiefly by material' decreased by –0.5% after stagnation in the fourth quarter of 2004; prices of 'miscellaneous manufactured articles' decreased in the first quarter of 2005 by –0.4%, i.e. the same as in the previous quarter.
Terms of trade reached the negative value of 99.8% in the first quarter of 2005, i.e. by -0.7 percentage points less than in the fourth quarter of 2004. Terms of trade decreased in the first quarter of 2005 when compared to the fourth quarter of 2004 especially in the following sections: 'crude materials, inedible, except fuels' (98.3%, i.e. –3.6 percentage points), 'manufactured goods classified chiefly by material' (99.5%, i.e. –1.1 percentage point), 'mineral fuels, lubricants and related materials' (99.8%, i.e. also –1.1 percentage point). Terms of trade remained positive in 'machinery and transport equipment' (100.1%, which is, however, a decrease by –0.1 percentage point) and 'miscellaneous manufactured articles' (101.1%, i.e. an increase by +0.8 percentage points).
Year-on-year evaluation:
In the first quarter, year-on-year external trade price development (similarly as the month-on-month) was under several prevailing influences: strengthening of CZK to main foreign currencies on one hand and increasing prices of 'mineral fuels, lubricants and related materials' and metals on world markets on the other. With regards to a longer time horizon, however, these influences were more distinctive in the y-o-y development. The y-o-y appreciation of CZK to EUR was 9.5% in the first quarter of 2005, while as for CZK to USD it was even 14.9%. Marked price growth of petroleum and natural gas on world markets was reflected in significant external trade price growth in 'mineral fuels, lubricants and related materials' (about +20%) and thus influenced secondarily also prices of chemicals. An increase of world prices of metals was then reflected primarily in the price growth of 'crude materials, inedible, except fuels' and 'manufactured goods classified chiefly by material'.
Import prices in total decreased by –1.2% in the first quarter of 2005. Thus, it was the first y-o-y quarterly decrease of import prices since the second quarter of 2003 and at the same time the biggest decrease since the first quarter of 2003. Import prices decreased not only for the first quarter of 2005 in total, but also in each of the three months and, moreover, with a fastening pace. The main reason for this development was all the time stronger CZK to EUR and USD. This influence was obvious especially in sections with the most marked quarterly y-o-y price fall: 'machinery and transport equipment' (-5.8%, telecommunications and sound-recording and reproducing apparatus and equipment) and 'miscellaneous manufactured articles' (-5.7%, mainly photographic apparatus, equipment and supplies and optical goods).
In other sections measured, the exchange rate influence was naturally observable, too; however, it was often eliminated or overcame by the price development as such, especially by the price growth of 'mineral fuels, lubricants and related materials' and metals on world markets.
Distinctive price growth of 'mineral fuels, lubricants and related materials' on world markets (Brent petroleum in March 2005 for more than 53 USD for a barrel and a y-o-y increase of this commodity in the first quarter of 2005 by +53.4% and natural gas +41.6%) resulted in an increase of import price growth of 'mineral fuels, lubricants and related materials' (+18.6%, petroleum, petroleum products and natural gas in particular). Import prices of 'chemicals and related products' decreased –2.0%; however, prices of plastics and organic chemicals (i.e. products based on petroleum) have increased.
Price growth of metals on world markets was reflected most of all in an increase of import prices of 'crude materials, inedible, except fuels' (+3.0%, metalliferous ores in particular) and 'manufactured goods classified chiefly by material' (+0.4% at marked price growth of iron and steel).
Influences that affected import prices development can be found also for export prices . They increased in the first quarter of 2005 only by +0.1% (i.e. by -3.8 percentage points less than in the previous quarter) and thus it was the lowest y-o-y quarterly increase of export prices since the first quarter of 2003. The same as for import prices, stronger CZK virtually eliminated the inflation influence of growing prices of raw materials on world markets.
Accelerating prices of petroleum and natural gas also there resulted in a marked growth of export prices of 'mineral fuels, lubricants and related materials' (+20.9%, coal and petroleum products in particular) and 'chemicals and related products' (+6.0%, mainly plastics and organic chemicals).
World price growth of metals resulted in an increase of export prices of 'manufactured goods classified chiefly by material' (+6.9%, especially iron, steel and manufactures of metals). Prices of 'crude materials, inedible, except fuels' decreased (-2.6%; however, prices of metalliferous ores markedly increased).
Similarly, strong CZK had a decisive influence on y-o-y quarterly decrease of export prices in 'machinery and transport equipment' (-5.6%, mainly power-generating machinery and equipment), 'miscellaneous manufactured articles' (-3.7%, especially articles of apparel) but also 'food and live animals' (-4.0%, feeding stuff for animals in particular).
Terms of trade reached positive value of 101.3% y-o-y in the first quarter of 2005. However, it is a value by –0.8 percentage points lower than in the previous quarter and at the same time the lowest value since the third quarter of 2003. Thus, terms of trade values were affected by different influences of world prices growth as well as appreciation of CZK both in import and export prices. In significant sections in terms of weight terms of trade were the highest in 'chemicals and related products' (108.2%) and 'manufactured goods classified chiefly by material' (106.5%). However, in both sections terms of trade decreased in comparison with the previous quarter (-3.6 and –0.5 percentage points, respectively). In 'machinery and transport equipment' terms of trade were positive (100.2%); however, in comparison with the previous quarter it was again a decrease (-0.3 percentage points). On the contrary, the lowest terms of trade were in 'crude materials, inedible, except fuels' (94.6%) and 'food and live animals' (96.5%).
Elaborated by: Jiří Choun, Prices Statistics Department
Director: Jiří Mrázek, phone number (+420) 27405 2533