Export and import price indices - December 2006

In December 2006, import prices decreased by 0.8% and export prices by 0.6% month-on-month. Year-on-year, import prices were down by 2.0%; on the contrary, export prices rose by 0.8%. The terms of trade figures reached 100.2% m-o-m and 102.9% y-o-y. In the average for the year 2006, import prices increased +0.8%, export prices decreased -0.8% and terms of trade reached the value of 98.4%.
Month-on-month comparison:

- Imports: import prices decreased by -0.8% and thus have been falling already for five months. The biggest influence on the decrease of the total m-o-m import price index was due to the decline in prices of 'machinery and transport equipment' by -0.8% (mainly electrical machinery, apparatus and appliances). Prices of 'mineral fuels, lubricants and related materials' decreased the most by -1.8% (gas in particular). All sections important in terms of weight decreased as well, particularly due to a stronger exchange rate of the Czech Crown.

- Exports : export prices decreased by -0.6%. Like in import, the biggest influence on the decrease of the total m-o-m export price index was due to the drop in prices of 'machinery and transport equipment' by -0.8% (mainly power-generating machinery and equipment). However, the biggest drop was recorded for 'chemicals and related products' by -1.3% (especially plastics). Among sections important in terms of weight, prices of 'mineral fuels, lubricants and related materials' increased the most (+0.9%, mainly electric current).

- Terms of trade reached a positive figure of 100.2%. The highest terms of trade value was reached in 'mineral fuels, lubricants and related materials' 102.7%. Negative value of terms of trade was only in sections of 'crude materials, inedible, except fuels' 99.6%, 'chemicals and related products' 99.7%, and 'manufactured goods classified chiefly by material' 99.8%.

Year-on-year comparison:

- Imports: import prices decreased by -2.0% (in November -1.5%) and thus decreased already the third month. Their drop was influenced the most by price decrease in 'mineral fuels, lubricants and related materials' (-7.9%, mainly gas). 'Machinery and transport equipment' prices decreased (-3.2%, telecommunications and sound-recording and reproducing apparatus and equipment in particular). Among sections important in terms of weight only 'manufactured goods classified chiefly by material' prices rose (+5.2%, mainly non-ferrous metals).

- Exports: the biggest influence on the increase of export prices by +0.8% (+0.5% in November) was due to the growth in prices of 'manufactured goods classified chiefly by material' (+2.7%, non-ferrous metals in particular). Marked price increase by +11.7% was also in prices of 'crude materials, inedible, except fuels' (predominantly metalliferous ores). The decline was mainly among prices of 'mineral fuels, lubricants and related materials' (-1.1%, especially gas). Prices of 'machinery and transport equipment' decreased (-1.0%, mainly metalworking machinery).

- The terms of trade reached the figure of 102.9% (in November 102.0%) and rose since March 2006 and thus were positive already for the fourth time in a row this year and at the same time the highest since June 2002. The increasing terms of trade were influenced both by petroleum price development on world markets and the Czech Crown development to foreign currencies. Terms of trade value were high especially in the sections 'crude materials, inedible, except fuels' (115.6%) and 'mineral fuels, lubricants and related materials' (107.4%). The terms of trade value in 'machinery and transport equipment' increased to 102.3%. On the contrary, the lowest figure among sections important in terms of weight was for 'manufactured goods classified chiefly by material' (97.6%).
In the average for the entire year 2006, import prices increased y-o-y by +0.8% (+0.3% in 2005); on the contrary, export prices decreased by -0.8% (-1.4% in 2005). The following two influences have affected the external trade development in 2006: while Czech Crown appreciation to EUR and USD decreased the indices, growth of prices of energies (petroleum and gas in particular) in context with development on world markets increased the indices.

Imports: Y-o-y, prices of 'mineral fuels, lubricants and related materials' increased the most +12.8% (especially gas, petroleum and petroleum products). Among other sections, only prices of 'manufactured goods classified chiefly by material' increased by +3.6% (non-ferrous metals in particular). Prices for ‘machinery and transport equipment’ decreased by -2.0% (especially telecommunications and sound-recording and reproducing apparatus and equipment). Among more important observed sections, the biggest price decline was recorded for 'miscellaneous manufactured articles' by -5.6% (mainly articles of apparel and clothing accessories).

Exports: The most marked y-o-y growth of prices was recorded for 'crude materials, inedible, except fuels' +8.5% (metalliferous ores and metal scrap in particular). Among more important observed sections, only prices of 'chemicals and related products' rose by 2.1%. Prices of all other observed sections declined, the most prices of 'manufactured goods classified chiefly by material' (leather manufactures in particular). Prices of ‘machinery and transport equipment’ decreased by -1.5% (especially road vehicles).

Terms of trade reached in total the negative value of 98.4% y-o-y in 2006 (in the year 2005 98.3%). However, their level during the year 2006 gradually increased - in Q1 95.2%, in Q4 already 102.1%.
Since January 2007, world price indices have been calculated on import structure of selected commodities of industrial raw materials and food for the year 2005.
Month-on-month comparison:

- The world prices of industrial raw materials and food covered by the index decreased by -6.7% in total in January. The main reason was a steep price drop of Brent petroleum by -12.6% and at the same time price drop of gas (the most significant since May 2002) and metals. Only prices of rubber, textile raw materials, leather and slightly also food and wood prices increased.

Year-on-year comparison:

- In January, the world prices were down by -0.3% in total and that was their first drop since September 2002. The main cause was (like in the m-on-m comparison) a marked drop of Brent petroleum by -14.5%. That was the first year-on-year price decline of this commodity since May 2005 and at the same time the most significant since February 2005. Also prices of wood decreased. Prices of all other aggregated sections remained higher, especially metal prices, which rose by +41.2%.

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 2006 and in the year 2006

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Note

Contact: Jiří Choun, phone (+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: 7201-06 Import and Export Price Indices in the Czech Republic
7202-06 CZSO World Price Indices of Industrial Raw Materials and Food
The data released are final.