FXStreet (Mumbai) - Data released by the Australian Bureau of Statistics today showed Australia's trade balance in the red with a deficit of $3.3 billion in October, worse than the $2.4 billion deficit estimated by economists. It also stayed way above the $2.4 billion deficit recorded in September. The primary factor that led to the widening of trade balance was a sharp decline in mining export volumes. Exports rose three per cent in the month, while imports were flat. Australia's other key export categories- rural goods and services also failed to pull exports up. The balance on goods and services in trend terms showed a deficit of $2,684 million in October 2015, a decline of 4 per cent on the deficit in September 2015; while in seasonally adjusted terms, the balance on goods and services recorded a deficit of $3,305 million in October, which is an increase of 38 per cent from the deficit in September. Iron-ore shipments fell JP Morgan economist Tom Kennedy said he was taken aback by the fall in export shipments. He noted that Australia’s essential export commodities like iron ore “fell commensurate with the headline figure, and was the main catalyst behind today's disappointment”. Exports, particularly in mining and resources, have been crucial for economic growth in 2015. A large fall in mining export volumes was the key factor that caused the economy to grow at a dis-satisfactory 0.3 per cent pace in the second quarter. In the following three months, net exports bounced back and contributed 1.5 percentage points to September quarter economic growth, which came in a 0.8 per cent. The widening trade deficit was mainly due to fall in iron ore export volumes, as evident in declining iron ore shipments in Port Hedland. NAB economist Tapas Strickland feels that even if iron ore exports pick up with the Roy Hill mine commencing exports soon, the low prices of iron ore will continue to impact the value of iron ore exports in the quarters ahead. However there seems to be some optimism that trade deficit will shrink in 2016 as liquefied natural gas (LNG) exports increase significantly. For more information, read our latest forex news.