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Canadian Exports, Imports Hit Record Highs in September Due to Energy Prices

Canada said Thursday that thanks to Hurricanes Katrina and Rita, the value of Canada's exports and imports both hit record highs in September due to soaring outbound shipments of natural gas and inbound shipments of crude petroleum. Exports jumped 2.8% to a record C$39.8 billion, while imports rose a more moderate 1.4% to C$32.7 billion.

"Hurricanes Katrina and Rita sent natural gas prices soaring, resulting in a big gain in the value of natural gas exports going south of the border," Statistics Canada said Thursday. "In fact, about three-quarters of September's 2.8% increase in exports was due to higher natural gas prices."

As in January 2001, when monthly exports were last in the C$39-billion range, a spike in natural gas prices was the driving force behind the jump in exports in September. Exports of natural gas surged 26.7% in September to C$4.2 billion, just short of the record of C$4.4 billion in January 2001. A 25% jump in natural gas prices in September followed a 14.6% rise in August.

As a result, Statistics Canada said the country's trade surplus with the world hit C$7 billion in September, up from a revised C$6.4 billion in August. The surplus with the United States exceeded C$10.7 billion, the second highest level ever, compared with a revised C$9.4 billion in August. Total exports to the United States surged 3.8% in September, while imports from south of the border edged down 0.6%.

The government agency noted that Canada recorded its highest monthly surplus ever with the United States in January 2001, which also resulted from a spike in natural gas prices.

From the Jan. 2004 to Sept. 2004 period to the Jan. 2005 to Sept. 2005 period, total Canadian energy exports increased 20.8%, while total Canadian energy imports increased by 38.6%.

For the month of September 2005, Canada's trade deficit with countries other than the United States widened to C$3.7 billion from C$3 billion. Exports to non-US destinations shrank slightly, while imports rose 5.6% as a result of increased imports of consumer goods from China and crude petroleum from Saudi Arabia and Russia.

"Exports have now risen for seven consecutive months," Statistics Canada said. "The value of exports in September was C$3.5 billion higher than the total in March. Rising energy exports have accounted for 80% of this climb, increasing C$2.8 billion during this period."

Excluding energy from total exports, September's exports were relatively flat (+0.2%). Exports of non-energy products were 2.4% higher in September than in March while energy exports rose 45.9% during that period.

Exports of petroleum and coal products also increased in September. Petroleum and coal exports rose 7.8% to a record high C$1.4 billion. Petroleum and coal exports have been strong throughout 2005, primarily as a result of rising prices. While exports of petroleum were up, exports of crude petroleum fell to C$2.8 billion. Crude petroleum exports had also edged down in August, following July's all-time high of C$2.9 billion.

As for imports during September, Statistics Canada reported gains in five of the seven import sectors led to September's record high. Imports edged down 1% in the automotive sector, and 0.6% in the machinery and equipment sector.

A rise in crude petroleum led the increase in imports, rising 17.9% to a record high $2.2 billion. The agency noted that crude petroleum imports have been on an upswing since late 2003, with imports nearly doubling since that time. "Although volumes were up in September, the steady climb of crude petroleum import prices accounted for nearly all of the value increase since late 2003," Statistics Canada said.

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