Import/Export Prices Increase

One problem weighing heavy on our economy is our trade deficit (i.e. the fact that we import significantly more than we export).  That deficit has been widening in recent year due to (among other things) the growth of emerging markets, particularly China.  As of March of 2011, the trade deficit was $48.2 billion.

That’s a big, scary number, to be sure.  But we might ask, are we at least moving in the right direction.  One statistic we might look at to answer this question is the 12-month percent change in the import and export price indexes.

From April 2010 to April 2011, overall import prices advanced 11.1 percent, the largest year-over-year increase since an 11.2-percent gain between April 2009 and April 2010. Export prices rose 9.6 percent over the past year, matching the 12-month advance in March—the largest year-over-year increase since export prices jumped 10.2 percent in July 2008.  So, at the very least, export prices aren’t rising quite as fast as import prices.  While this is nowhere near a solution to our trade deficit, it’s a trend in the right direction.

Much of the increase in exports was in the agriculture sector, where prices increased 35 percent from April 2010 to April 2011.  The increase was led by a 96.3 percent increase in corn prices and a 142.5 percent increase in cotton prices.  These price increases were due at least in part to weather conditions that effected crops, as well as increased demand from emerging markets.