Commodity highs boost surplus to $41.4bn

WESTERN Australia had a trade surplus of $41.4 billion for the 2007-08 financial year, with total exports up 12.6 per cent compared with the previous financial year.

Minerals and petroleum exports continue to dominate, contributing 83 per cent ($56.6 billion) toward total WA merchandise exports for the year.

According to the Department of Industry and Resources, high world commodity prices played an important role in pushing up the value of WA mineral and petroleum sales.

Iron ore and petroleum exports accounted for more than two-thirds of the state's total resources exports.

Iron ore sales from WA increased in value by 30 per cent, with 290 million tonnes exported at a value of $20.5 billion, making the industry the largest resource sector in the state.

High oil prices fueled the growth of the state's petroleum industry, with exports up by almost 19 per cent to $19.4 billion.

Together, crude oil, gas and LNG represents one-third of the total value of WA's resource industry, with the state's petroleum industry now accounting for 70 per cent of national oil and gas production.

China, Japan, South Korea and India were WA's four largest export markets for the year.

Exports to China have grown, on average, by 32.7 per cent a year for the past five years, and have increased almost 10-fold in the past decade.

Record high prices were reached for oil, iron ore and gold during the year, while nickel and zinc dropped 32 per cent and 36 per cent respectively (in Australian dollar terms), retreating from previous record highs.

The Department of Industry and Resources said the result was even more remarkable considering the strengthening of the Australian dollar against the US currency by about 13 per cent, which is estimated to have reduced mineral and petroleum export revenue by around $9 billion.

Another major export contributor, wheat, increased its value by 7 per cent to $1.8 billion.

The local wine industry staged a recovery, with WA wine exports up 4.7 per cent to $53 million, after a 5 per cent drop the previous year.

Looking ahead, the Chamber of Commerce and Industry believes imports into WA are expected to remain at a high level, rising by 11 per cent in 2008-09.

It also expects the long-awaited pick up in exports to more than offset that growth in imports, with the external sector is expected to be the key driver of the WA economy as a result.