Crude oil, gold exports help Canada swing to surprise trade surplus in June
By Promit Mukherjee and Ismail Shakil
OTTAWA (Reuters) -Canada recorded a surprise trade surplus of C$638 million ($461 million) in June, data showed on Tuesday, mainly led by a jump in shipments of crude oil from the recently expanded Trans Mountain Pipeline.
A surge in exports of gold also boosted exports and, together with energy products shipments, helped exports overtake imports for the first time in four months, Statistics Canada said.
Analysts polled by Reuters had forecast a C$1.84 billion trade deficit. May’s trade deficit was revised down to C$1.61 billion from a preliminary C$1.93 billion deficit.
Total exports jumped 5.5% in June, led by crude oil and gold exports, while imports were up 1.9%, driven by cars and light trucks, data showed. By volume, exports rose 3.8% in June, while imports increased by 1.3%.
After 12 years and C$34 billion in costs, Canada in May commissioned the Trans Mountain Pipeline expansion project (TMX), which unlocked the Asia-Pacific market for local crude oil producers.
«They are shipping more through the Trans Mountain pipeline into Asia-Pacific, which is really positive,» said Prince Owusu, senior economist with Export Development Canada.
Exports of energy products, which account for over a fifth of all exports from Canada, rose 11.7%. While this was aided by higher prices, Statscan said the increased volume of crude exports was the biggest contributor to the overall increase.
Exports of metal and non-metallic products, which contribute over a 10th of total exports, rose 11.8%, led largely by exports of unwrought gold.
The Bank of Canada lowered its benchmark interest rate for a second straight month in July and indicated its focus was shifting to boosting the economy.
Financial markets have fully priced in a 25-basis-point cut in the central bank’s key policy rate at its September meeting and expect similar cuts at its October and December meetings.
The Canadian dollar pared losses after the data, trading marginally down 0.04% at 1.3829 to the U.S. dollar, or 72.26 U.S. cents.
The rise in total imports was led by motor vehicles and parts as well as consumer goods.
An 8.2% rise to a record C$6.8 billion in imports of passenger cars and light trucks drove the motor vehicles and parts category in June.
Exports to the United States, by far Canada’s largest trading partner, rose for a third consecutive month and outpaced the growth in imports in June, leading to Canada’s trade surplus with its neighbor widening to the highest level since November 2023.
($1 = 1.3840 Canadian dollars)
