Trade Price Forecast - Export Prices Resume Falling

Flexport’s Trade Price Forecast (TPF) forecast covers import and export prices. The current TPF projects export prices to fall by 0.3% month-on-month for the next six months and be down 4.1% year-on-year in January 2024, the end of the current forecast period. Import prices look to change little after rising 0.3% in August and should be down just 0.4% year-on-year in January.

The Methodology: In the course of calculating real and nominal forecasts for trade and consumption, it is necessary to predict price trends at a disaggregate level from the Bureau of Labor Statistics data.

Update: September 18, 2023

During the pandemic, import scarcity was blamed for fueling inflation. Export prices rose at a steeper rate, but import prices trailed not far behind. They then peaked around June 2022 and fell through the second half of the year.

We have been looking at the changing volumes of U.S. imports in other Flexport data releases, as well as U.S. exports. With the Trade Price Forecast, we look at overall prices for both imports and exports and at the level of key sectors. Besides being one input for inflation calculations, price movements are of interest to anyone engaged in trade in general or in these specific sectors.

Fig. 1 - Export Prices Continue Declining After a July Jump

Figure 1 shows real prices for both imports and exports, dating back to January 2019.

Overall, prices for both had been declining since early 2023, continuing a downward trend that began in July 2022, when both peaked. Over the next six months, the current forecast period, we forecast import prices to see a slight rise before leveling off, although they will still be down year-on-year; by January, they could be 0.4% lower. Export prices are forecast to resume declining after a slight jump in June. By January, they could be 4.1% lower than in January 2023.

Fig. 2 - Import Prices for Industrial Supplies to Remain Level

Figure 2 tells a more detailed story. Again, we forecast very little movement. Industrial supplies import prices have come down from their highs and appear to keep to the bottom we forecast last month; they move 0.1% or less month-on-month over all six months of the current period. Food import prices will see the most movement, trending upward and be up between 2.0 - 5.1% year-on-year depending on the month.

Fig. 3 - Consumer Goods Export Prices to Rise Slightly

Figure 3 conducts the same exercise for export prices.

As with import prices, the most volatile category in the export prices of goods since the start of the pandemic has been industrial supplies. They will see small rebounds in the early months of the forecast period before flattening. That still means they will be down significantly year-on-year: down 16.1% in August, 11.8% in November and 5.5% in January.

Prices for consumer goods and automotive exports will continue rising, nearly in tandem. Both will be up between 2.0 - 4.0% year-on-year in each month of the forecast period, with the exception of January automotive export prices, which could be up only 0.9% by this measure.

The next update for the Flexport TPF will be on October 17, 2023. Please direct questions about the Flexport Trade Price Index to economics@flexport.com.

Disclaimer: The contents of this report are made available for informational purposes only and should not be relied upon for any legal, business, or financial decisions. Flexport does not guarantee, represent, or warrant any of the contents of this report because they are based on our current beliefs, expectations, and assumptions, about which there can be no assurance due to various anticipated and unanticipated events that may occur. This report has been prepared to the best of our knowledge and research; however, the information presented herein may not reflect the most current regulatory or industry developments. Neither Flexport nor its advisors or affiliates shall be liable for any losses that arise in any way due to the reliance on the contents contained in this report.

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