The official figures showed the balance on goods and services widened sharply to a A$1.915 billion ($1.2 billion) deficit in April from A$1.494 billion in March. Analysts had expected a modest improvement to a A$1.4 billion shortfall.

The outcome by far eclipsed the previous monthly record of A$1.578 billion set in February.

Australia was last year forced to accept heavy price cuts for coal and iron ore contracts with Japan, and the new lower prices came into effect in April.

"Australia has yet to benefit from the recovery in global growth, and in particular the turnaround in Asia," said JP Morgan senior economist John Kyriakopoulos.

"Coal and iron ore, gold,beef, wool and aluminium, those are the commodities that matter for Australia, and those prices haven't improved," he said.

Non-rural exports fell by 11.3 per cent in April, led by declines in metal ores and minerals and metals.

Exports to Japan slumped a record 17 per cent to A$1.1billion, unadjusted, to the lowest level since February 1994.

In April, total exports fell by 5.8 per cent while imports took a breather after recent strong growth, falling 1.1 per cent.

"The trade numbers are in line with what commodity prices have done in the month," said Bankers Trust senior economist Kieran Davies. "If this trend continues, we'll see an increase in the current account deficit as a share of GDP to well above six per cent in the June quarter." The current account deficit is expected to reach 6.2 per cent of GDP or a record dollar figure of A$9.1 billion for the March quarter, with the official figures due out on Tuesday.

The April report may also rattle hitherto sanguine policy makers, who have arguedthat the current account deficit was set to improve from current levels.

Treasurer Peter Costello told parliament the trade gap was to be expected. "At a time when your export prices are at historical lows, you'll get pressure on your trade position," he said.

Most analysts see an improvement in the trade deficit in the second half of the year, as imports slow with consumption growth and exports to Asia begin to pick up.

Separately, inventories figures released by the Bureau of Statistics on Monday suggested there is an upside risk to GDP forecasts for the March quarter, due on Wednesday.

Companies accumulated stocks at a 1.7 per cent pace, unchanged from the increase in the December quarter, implying a neutral contribution to GDP growth where most analysts had expected a small detraction.

"You can just add it to the list of other indicators which show that March quarter GDP growth is likely to be very strong," said Davies.

Preliminary GDP estimates are for a robust 1.0 per cent in the quarter and4.3 per cent compared with a year earlier.

The trade numbers weighed slightly on the Australian dollar, which had weakened ahead of the release as well.

By 0530 GMT, the dollar was trading at $0.6484/89 compared with $0.6491/96 before the data and $0.6531/36 in the early trade.