Commodity Prices YoY

Commodity Prices YoY is the over-the-year % change in the Index of Commodity Prices (ICP) from the Reserve Bank of Australia (RBA), Australia's central bank. It measures export prices received by Australian exporters across about 20 rural, base-metal and bulk commodities weighted by export values. Iron ore, coal, LNG, gold, wheat and beef are examples, and it covers prices received only, not consumer prices, import prices, volumes or production. YoY compares the index level with the same month a year earlier, reported in SDR terms with Australian-dollar and US-dollar versions.

It is published monthly on the first business day after the reference month, at 4.30 pm on the RBA schedule, with prices as monthly averages. Bulk commodities and LNG use preliminary market-based estimates, each release revises the prior month, and year-end timing can shift earlier for holidays. Each release reports the month-on-month change in SDR terms with rural, non-rural and base-metals sub-indices, plus Australian-dollar and US-dollar versions. It also reports the over-the-year change in SDR terms with leaders named, while weights and price sources update each April with rebasing and minimal revisions.

Export-value weights move the index, so heavy bulk and energy items dominate.

• Iron ore, 28.8%: the heaviest weight in the index.
• LNG, 17.8%: gas energy export prices.
• Metallurgical (coking) coal, 12.8%: steel-making coal prices with early market estimates.
• Thermal coal, 11.4%: power-generation coal prices.
• Gold, 6.3%: gold export prices as a store of value.
• Other commodities, including lithium spodumene, 3.3%: oil, alumina, wheat, beef and London Metal Exchange metals such as aluminium, copper, lead and zinc.

The April 2023 release, published May 1, 2023, showed a 5.2% monthly fall in SDR terms after a revised 2.5% fall in March. The rural sub-index rose over the month while the non-rural and base-metals sub-indices fell. It fell 4.3% in Australian-dollar terms and 19.2% over the year in SDR terms, led by lower coking coal, iron ore, LNG and rural prices. The lesson is that a rising rural part cannot lift the index when heavy bulk weights point down.

1. Laspeyres price index: a fixed-weight method that holds base-period export quantities constant and tracks price moves. It divides base-period quantities at current prices by their value at base-period prices.
2. Weights: each weight is its share of commodity export values, using an average of the two most recent financial years. Weights update each April, and commodities join when their share turns material, as with lithium spodumene.
3. Rebasing and splicing: after reweighting the index is rebased so the new base-year average equals 100. The new series is spliced to the old at the reweighting month, keeping a continuous series back to July 1982.
4. Currency presentation: aggregation is in SDR terms, with Australian-dollar and US-dollar versions, using spot prices on a monthly-average basis. The SDR rests on the US dollar, euro, renminbi, yen and pound, with no seasonal adjustment described.
5. Illustrative example: base exports of 100 units of iron ore at 50 and 100 units of wheat at 200 give a base total of 25,000. If iron ore rises to 60, up 20%, and wheat falls to 180, down 10%, the numerator is 24,000. The index is 96.0, down 4.0% as wheat carried the heavier weight.