Export and import price indices - December 2005

In December, import prices decreased by -0.3% month-on-month and export prices by -0.9%. Year-on-year, import prices increased by +2.9%, while export prices decreased by -2.6%. Terms of trade were negative again: 99.4% m-o-m and 94.7% y-o-y. In the average for the year 2005, import prices increased +0.3%, export prices decreased -1.4% and terms of trade reached the value of 98.3%. The CZSO world price index of raw materials and food increased in January by +8.2% m-o-m and +41.0% y-o-y.
Month-on-month comparison:

- External trade prices were decreasing already the second month. Import prices decreased by -0.3% (-0.8% in November), export prices decreased the same as in November by -0.9%. The main reason for this development was both the appreciation of the Czech koruna against EUR and USD and a decrease in petroleum prices on world markets in previous months. This decrease resulted in a drop of the import and export prices of 'mineral fuels, lubricants and related materials' and the related prices of 'chemicals and related products'.

- Imports: import prices were influenced most by a decline in prices of 'machinery and transport equipment' -0,5% (mainly power-generating machinery and equipment). Prices of 'crude materials, inedible, except fuels' decreased the most markedly by -1.9% (metalliferous ores and metal scrap in particular). In connection with petroleum price development on world markets also prices of 'mineral fuels, lubricants and related materials' decreased by -0.1% and 'chemicals and related products' -1.2% (especially organic chemicals). Among important sections observed, only the prices of 'food and live animals' rose (+1.4%, especially vegetables and fruit).

- Exports: the biggest influence on the decrease in the total m-o-m export price index was due to a drop in prices of 'manufactured goods classified chiefly by material' by -0.9% (especially rubber manufactures). Prices of all sections important as for their weight have decreased. More notable price drop was recorded for 'mineral fuels, lubricants and related materials' -1.9% (petroleum products in particular) and 'chemicals and related products' by -2.7% (especially plastics and organic chemicals). Prices of 'machinery and transport equipment' were cut -0.6% (other transport equipment in particular).

- Terms of trade were below 100% already the tenth successive month. They reached 99.4% in December, i.e. by 0.5 percentage point less than in November. The lowest terms of trade were reported for 'food and live animals' 98.0% and the highest for 'crude materials, inedible, except fuels' 101.1%. Terms of trade for 'machinery and transport equipment' amounted to 99.9%, i.e. the same as in November.

Year-on-year comparison:

- Import prices increased by 2.9% (+1.4% in November), while export prices decreased by 2.6% (-2.9% in November). The development of external trade prices was again influenced by y-o-y appreciation of the Czech koruna against EUR and USD, however, in total less than in November.

- Import prices were most affected by higher prices of 'mineral fuels, lubricants and related materials' +43.1% (mainly gas, petroleum and petroleum products). The prices of 'crude materials, inedible, except fuels' +1.4% (pulp and rubber in particular) and 'food and live animals' +1.5% (mainly coffee and fish) increased, too. On the contrary, prices in the other sections observed decreased; among important sections it applies especially to the prices of 'miscellaneous manufactured articles' -7.8%. The prices of 'machinery and transport equipment' dropped by -1.5% (in particular power-generating machinery and equipment).

- The biggest influence on the decrease of the total y-o-y export price index was due to a fall in the prices of 'manufactured goods classified chiefly by material' by -6.3% (mainly leather, iron and steel). Prices of 'machinery and transport equipment' decreased by -2.1% (‘office machines and automatic data-processing machines’ in particular). Like in imports, among important sections in terms of the weight, especially the prices of 'mineral fuels, lubricants and related materials' increased more markedly by +10.5% (especially petroleum products).

- Terms of trade reached 94.7%, which was by 1.1 percentage points less than in November and at the same time the lowest level since June 2000. The dominant cause was exchange rate development again, because the koruna appreciated against EUR and depreciated against USD. Terms of trade value dropped (or did not grow) in all observed sections in comparison to November. The lowest terms of trade were recorded (already since June) for 'mineral fuels, lubricants and related materials' 77.2%, higher for 'miscellaneous manufactured articles' 106.6%. Terms of trade in ‘machinery and transport equipment’ amounted to 99.4% (i.e. by 0.4 percentage points less than in November).
In the average for the entire year 2005, import prices increased y-o-y by +0.3% (+1.6% in 2004); on the contrary, export prices decreased by -1.4% (+3.7% in 2004). One of the reasons for this development was marked koruna appreciation to EUR, which decreased export prices level in particular. Prices of almost all observed sections decreased, with an important exception of 'mineral fuels, lubricants and related materials' prices (mainly petroleum, petroleum products and gas).

Imports: Y-o-y, in relation to world markets development, prices of 'mineral fuels, lubricants and related materials' increased the most +29.2% (especially gas, petroleum and petroleum products). Among more significant observed sections, only prices of 'crude materials, inedible, except fuels' increased by +1.1% (metalliferous ores and metal scrap in particular). Prices for ‘machinery and transport equipment’ decreased by -4.0% (especially telecommunications and sound-recording and reproducing apparatus and equipment). Among more important sections, the biggest price decline was recorded for 'miscellaneous manufactured articles' section by -7.3% (mainly miscellaneous manufactured articles).

Exports: As in imports, significant y-o-y growth of prices was recorded for ‘mineral fuels, lubricants and related materials’ +16.5% (petroleum products in particular) as well as for 'chemicals and related products' +1.4%. Prices of all other more important observed sections decreased. The most markedly, prices of ‘machinery and transport equipment’ were cut by -4.0% (especially office machines and automatic data-processing machines).

Terms of trade reached in total the negative value of 98.3% y-o-y in 2005, i.e. by 3.8 percentage points less than in 2004.
Month-on-month comparison:

- The world prices of raw materials and food covered by the index speeded up their growth and rose in total by +8.2% in January after an increase in December by +1.9%. The main reason was increase in the petroleum and natural gas prices +8.5% in total (of these petroleum Brent +10.5% and natural gas +6.3%). Prices of rubber and wood rose exceptionally, too. Prices of metals, even despite their slight slowdown of growth, recorded the second highest growth since January 2001 and increased +6.0%. Among the sections observed, only the prices of leather decreased slightly.

Year-on-year comparison:

- In January, the world prices were up by 41.0% in total and thus increased their growth moderately. ‘Mineral fuels, lubricants and related materials’, strictly speaking, kept their high growth – price of petroleum Brent rose +43.3%, natural gas price +46.3%. The price of rubber rose exceptionally, too. The prices of metals speeded up their growth in total from +24.7% in December to +33.0% in January. Only prices of leather and wood dropped.

1) The world prices follow current prices in original currencies in commodity markets and indicate in advance the character of the future development of the Czech import and export prices of industrial raw materials and food.

Analysis - Development of external trade price indices in the fourth quarter of 2005 and 2005

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Note
Contact: Jiří Choun, tel. (+420) 274 052 196, e-mail: jiri.choun@csu.gov.cz
Data source: CZSO survey
End of data collection: Last calendar day of the month
End of data processing: Import and export price indices: 40th calendar day following the end of reference month
CZSO world price indices: 10th calendar day following the end of reference month
Related publications: 7201-05 Import and Export Price Indices in the Czech Republic
7202-05 CZSO World Price Indices of Industrial Raw Materials and Food
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The data released are final.