🎈 Up Big Today: Find today's biggest gainers (some over 50%!) with our free screenerTry Stock Screener

Canada posts higher-than-expected trade deficit in September on lower prices

Published 06/11/2024, 01:20 am
Updated 06/11/2024, 02:14 am
© Reuters. FILE PHOTO: A shipping container is unloaded in the Port of Montreal in Montreal, Quebec, Canada, May 17, 2021.  REUTERS/Christinne Muschi/File Photo
TTEF
-
CAD/USD
-
CL
-

By Promit Mukherjee and Fergal Smith

OTTAWA (Reuters) -Canada posted a higher than expected trade deficit of C$1.26 billion ($908 million) in September mainly on account of lower prices which pulled down the value of exports but overall volumes of outbound shipments rose, data showed on Tuesday.

The September data was its seventh straight monthly trade deficit, primarily led by a fall in value of lower exports to major trading countries other than its biggest trading partner the United States, Statistics Canada said.

Most of the decline in exports was due to lower prices of crude oil and other commodities which cumulatively dropped by 1.5%. In volume terms exports were up 1.4%.

Economists said the data showed exports were strong in September and that should give momentum to trade in the fourth quarter.

Due to an ongoing digital transition at Canada Border Services Agency Assessment and Revenue Management, from where Statscan gets most of its trade data, results for September include greater use of estimation.

Analysts polled by Reuters had predicted a deficit of C$800 million and Statscan revised sharply the August trade deficit to C$1.47 billion from C$1.1 billion.

The biggest hit to exports, which fell by 0.1%, came from a 5.4% drop in shipments of metal and non-metallic mineral products, led by a 15.4% slump in the unwrought gold category.

Total (EPA:TTEF) exported goods prices dropped 1.5%, Statscan said.

"So these were really pricing stories both when you look at metals and energy," Stuart Bergman, chief economist at Export Development Canada.

"There is some cause for optimism in some of those details," he said.

Inbound shipments declined 0.4% in September but were largely flat in volume terms. Imports of metal and non-metallic mineral products decreased 12.7% and contributed the most to the overall decline.

The drop in imports largely reflect Canada's weak demand environment and sluggish growth prospects which have taken a hit under the impact of high interest rates which the Bank of Canada started reducing from June.

Since then, the BoC has cut its key policy rate to 3.75%.

Economists are hoping further cuts in interest rates will help reinvigorate local demand in the coming quarters.

The BoC will announce its next monetary policy decision on Dec. 11 with money markets bets inching close to 50% for a 50-basis point cut.

The Canadian dollar firmed by 0.18% to 1.3876 to the U.S. dollar by 1333 GMT, or 72.07 U.S. cents. Yields on two-year government bonds were up 2.89 bps at 3.134%.

Total exports were at C$63.88 billion while imports were at C$65.14 billion.

© Reuters. FILE PHOTO: A shipping container is unloaded in the Port of Montreal in Montreal, Quebec, Canada, May 17, 2021.  REUTERS/Christinne Muschi/File Photo

Canada's trade surplus with the United States, which accounts for over three-quarters of its total exports, increased to C$8.29 billion in September from C$7.82 billion a month ago. Imports from the United States, which is 60% of all Canadian imports, rose 0.8% month-on-month.

($1 = 1.3882 Canadian dollars)

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.