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International Economics
Evaluation of Exports
Croke, Joey
8/31/2015

Australia’s economy heavily relies on exports which is responsible for 70% of Australia’s total gross
domestic product
...
With supply and demand in certain
products constantly fluctuating, as iron ore falls, other exports such as wheat and wool will have to
significantly rise in order to compensate and ensure that the exporting industry does not collapse
...
With the Australian dollar currently
sitting at 74 US cents, exports have less value, giving foreign nations more buying power and
allowing them to import more products for a lower price
...
As these sectors drop, the
circular flow between nations trading with Australia will be affected as profits will appreciate for
foreign nations and depreciate for Australia
...
86% of total exports and generating an annual
export value of $54
...
Iron ore prices have
decreased dramatically over the years, due to demand from nations such as China decreasing and
supply from Australia increasing despite this, creating a surplus of iron ore
...
Demand in China has decreased due to the output of steel being drastically
reduced as the Chinese economy experiences its slowest growth rate in years
...
Australia’s total gross domestic product is largely
affected by iron ore exports as it accounts for almost a third of Australia’s total exports
...
The decrease in prices and demand for iron ore
means a decrease in GDP as fewer exports means less cash flow
...

Wheat is a growing export product in Australia, making up 2
...
Exports of wheat are
increasing due to reasons including a fall in iron ore demand and growing demand in the Asian
market
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This industry has minimal risk of collapsing as
populations grow; the demand for food grows which will ensure a constant need for wheat
...
The wheat export industry is steadily increasing,
with slight constant falls as seen in figure 3
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The $47 billion gap between the two exports will severely reduce Australia’s
GDP and weaken the economy in the short term; however with the growing wheat industry,
Australia’s economy can bounce back and potentially grow in the long term
...
The exchange rate between Australia and China sits
at 4
...
This is good for Australian exports as wheat would
be worth more despite its current low currency value of 73 US cents per one Australian dollar (XE,
2015)
...
Main competitors of wheat exports are France, The United States and Canada (Business
Insider, 2011)
...
Demand is growing due to tax cuts, growing populations and accessibility
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1% of total exports amounting to $2
...
China imports 65% of Australia’s wool exports
(Wool Producers, 2015)
...
As the iron ore industry falls, there will be a lot of pressure on
industries such as wool, which must grow dramatically to compensate for the decrease in iron ore
...
As
Australia’s dollar currently at such a low value, China can import more wool as their currency will
have more buying power compared to previous years
...
69
Yuan to one Australian dollar is still not very beneficial for the Chinese economy, it is both good and
bad for the Australian economy as wool can be sold for more than usual; however, this gives less
incentive for China to buy more wool (XE, 2015)
...
73% of the world’s wool (World Knowing, 2015)
...
The growth of the wool export industry plays
a vital role in the Australian economy and is set to grow throughout the future
...

This is due to the falling demand of iron ore in China, the decrease of total iron ore available and the
growing demand for wheat and wool products
...
This is
an important issue as Australia’s exports account for a large proportion of Australia’s GDP, which
means Australia’s economy heavily relies on its exports and one fault could have a trickling effect,
causing a downturn in the economy
...


Croke, Joey

3

APPENDIX
Figure 1 - Total Australian Exports rising
...


Figure 4 – Iron Ore exports decreasing significantly
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Iron Ore
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australianminesatlas
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au/education/fact_sheets/iron
...
2015]
...
Wheat Stocks and Exports, Australia, Sep 2012
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abs
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au/ausstats/abs@
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0main+features3Sep%202012
[Accessed 25 Aug
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Australia's coal and iron ore exports 2001 to 2011
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1st ed
...
gov
...
pdf [Accessed 17 Aug
...

Business Insider, (2011)
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[online] Available at:
https://www
...
com
...
businessinsider
...
au%2Fthe-worlds-biggest-wheat-exporting-countries-2011-4&ei=jWbWVerxDfFmAWwibQg&usg=AFQjCNGMpb9kyZL7G6AKoecIftwUgVDdxw [Accessed 20 Aug
...

Department of Foreign Affairs and Trade, (2015)
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[online] Available at:
http://dfat
...
au/trade/resources/Documents/chin
...
2015]
...
and Weiser, L
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Glossary of economic terms and conepts
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Available at: http://www
...
org/guide/glossary
...

2015]
...
Australia
...
media
...
edu/en/profile/country/aus/ [Accessed 17 Aug
...

Oresome Resources, (2015)
...
[online] Available at:
http://www
...
com/media_centre_view/section/media/parent//category/environ
ment_videos/resource/image_australia_top_10_exports [Accessed 17 Aug
...

Sydney Morning Herald, (2015)
...
[online] Available at: http://www
...
com
...
html [Accessed 20 Aug
...

Trading Economics, (2015)
...
[online] Available at:
http://www
...
com/australia/exports-of-iron-ore-concentrates [Accessed 22 Aug
...

Tradingeconomics
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Australia Exports | 1971-2015 | Data | Chart | Calendar | Forecast |
News
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tradingeconomics
...

2015]
...
Falling back to earth - our terms of trade collapse
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whocrashedtheeconomy
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au/blog/category/china-housing/ [Accessed

Croke, Joey

6

16 Aug
...

Wool Producers, (2015)
...
[online] Available at:
http://www
...
com
...
2015]
...
Top 10 largest Wool Producing Countries in the World
...
com/top-10-largest-wool-producing-countries-in-the-world/ [Accessed 25 Aug
...

XE, (2015)
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[online] Available at:
http://www
...
com/currencycharts/?from=AUD&to=CNY [Accessed 20 Aug
...


Croke, Joey

7



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