UPDATE 1-Canada January trade deficit dwindles as exports rise

Thu Mar 7, 2013 8:33am EST
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* Canada exports up by 2.1 pct, imports rise by 1.9 pct

* Deficit shrinks to just C$237 million

OTTAWA, March 7 (Reuters) - Canada's trade deficit in January dwindled to just C$237 million ($230 million) as exports grew at a faster rate than imports, Statistics Canada said on Thursday.

The deficit - less than the C$600 million predicted by market operators - represented the best performance since the C$21 million surplus recorded in March 2012. Statscan revised December's deficit to C$332 million from an initial $901 million.

January exports rose by 2.1 percent - the greatest month-on-month increase since the 4.3 percent jump seen in December 2011 - thanks to higher prices and volumes for crude oil and crude bitumen as well as precious metals.

Imports increased by 1.9 percent on higher volumes, mainly due to higher shipments of energy products. Imports of metal ores and industrial machinery also grew.

Exports to the United States - which took 74.2 percent of all Canadian exports in January - grew by 2.6 percent while imports grew by 2.1 percent. As a result, Canada's trade surplus with the United States increased to C$4.25 billion from C$4.03 billion in December.