Canada’s merchandise trade surplus with the world widened from $4.8 billion in May to $ 5.0 billion in June.
Exports rose 2.0 percent (month-on-month) in June, while imports rose 1.7 percent, according to the latest numbers from the Conference Board of Canada.
Total exports rose for the sixth consecutive month to $69.9 billion in June. Exports of energy products were up 3.2 percent to $21.0 billion in June, representing 30 percent of total exports. While energy products were crucial to the gain in total exports, non-energy exports also increased by 1.4 percent.
Total imports increased by 1.7 percent to $64.9 billion, recording a fifth monthly gain. Imports of energy products (up 22.3 percent) contributed the highest to the increase in total imports. Refined petroleum products led the way, rising 32.5 percent to a record high of 1.9 billion – not just on price growth but on volume as well.
Exports to the United States continued to rise, increasing 1.2 percent in June, principally driven by higher crude oil exports. Imports from the United States edged up 2.6 percent. As a result, Canada’s trade surplus with the United States narrowed from its historic high of $13.6 billion in May to $13.2 billion in June.
Conference Board research associate Momanyi Mokaya suggested in a release that with the first ship carrying Ukrainian grain (corn) having successfully left Odesa, global grain prices are forecast to ease after a 40 percent spike to a record high in March. With 16 more full ships departing from Ukraine carrying wheat, sunflower seeds, corn, and sunflower oil, prices will continue to settle, but will remain above normal. It will take come time for food prices to reflect the reductions, Mokaya said.
Reduction in US consumer spending will have a dampening effect on Canadian non-energy exports, he added. As seen in the June numbers, consumers are spending less on big-ticket items as a result of higher inflation and interest rates.
Slowing demand in the construction sector has also reduced lumber prices. This is likely to spill over to other sectors such as exports of motor vehicles and parts as American households tighten their purse strings and cut back on spending.