Canada exports fall, reversing months of trade surplus

OTTAWA  -Canada recorded its biggest trade deficit since October 2020 in May, government data showed Thursday, surprising analysts with a drop in exports of grains and energy products while imports trended up behind automobiles.

The deficit stood at Can$3.4 billion (US$2.5 billion), after two months of surpluses, the statistics institute reported on Thursday.

In April, the country had recorded a trade surplus of Can$894 million. Exports fell by 3.8 percent, two-thirds of which was attributable to energy and farm and food products.

Exports of agricultural and fishing products (-13.4 percent) fell the most in May.

According to Statistics Canada, demand for Canadian grains has slowed in recent months due to an improvement in global supply, particularly for wheat and canola.

The energy sector, one of the main drivers of the Canadian economy, saw its exports fall by 7.3 percent in May due to lower prices.

On the import side, most sectors saw an increase, for a total rise of 3.0 percent, or almost Can$2 billion.

Imports of unwrought gold, silver and platinum group metals and their alloys (+42.8 percent) rose sharply, due to large shipments of silver from the United Kingdom.

Statistics Canada attributes this rise to economic uncertainty, which tends to increase demand for precious metals. Imports of motor vehicles and parts also rose by 4.5 percent.

The trade surplus with the United States, the country with which Canada does the vast majority of its trade, narrowed to Can$6.7 billion.

READ: Canada exports edge up in April on seafood and motor vehicles