Export and Import Prices Fall

Export and Import Prices Fall

The merchandise terms of trade was relatively flat, down 0.3 percent in the September 2003 quarter, according to the latest Overseas Trade Index figures released by Statistics New Zealand. The fall in the merchandise terms of trade is due to export prices falling more than import prices in the latest quarter. The decrease in the terms of trade means that less imports can be funded by a fixed quantity of exports.

Merchandise export prices decreased by 1.8 percent in the September 2003 quarter while import prices fell 1.5 percent. Both export and import prices have fallen since the March 2002 quarter. A significant contributor to the price falls in the September 2003 quarter was a 2.2 percent rise in the value of the New Zealand dollar as measured by the trade weighted index.

Price falls for pastoral and dairy products (down 2.8 percent) were the major contributor to the fall in export prices in the September 2003 quarter. Price falls for meat (down 3.8 percent) and dairy products (down 1.5 percent) contributed to the overall fall in pastoral and dairy product prices. Non-food manufactures also fell in the September 2003 quarter, down 2.0 percent, driven by falls in the prices of casein and methanol.

Falls in mechanical machinery (down 3.2 percent), electrical machinery (down 4.0 percent) and petroleum and petroleum products (down 3.5 percent) were the main contributors to the fall in merchandise import prices in the latest quarter.

Seasonally adjusted merchandise export volumes rose 0.9 percent in the September 2003 quarter following a 3.2 percent fall in the June 2003 quarter. Most of the major indexes rose in the quarter with the meat, wool and by-product index being the major contributor to the rise. The other index to rise significantly was the non-food manufactures index. Partly offsetting the rises were falls in the indexes for non-fuel crude materials, forestry products and fish and fish preparations.

Seasonally adjusted merchandise import volumes rose 1.2 percent in the September 2003 quarter, the eighth consecutive quarterly rise. Record volumes of imports were recorded in each of the latest four quarters, with goods volumes increasing by 10.0 percent over this period. Increases in the current quarter were recorded for capital goods, consumption goods and motor spirit, while intermediate goods and passenger motor cars recorded a fall.

The terms of trade for services rose 0.8 percent in the September 2003 quarter due to import prices for services falling (down 0.9 percent) while export prices were flat (down 0.1 percent). This is the eighth consecutive quarterly rise in the terms of trade for services. Following a review of the overseas merchandise trade price and volume indexes, a number of changes have been made to the way that the indexes are compiled. For more information, refer to the published information paper, available on the Statistics New Zealand website.

Brian Pink Government Statistician END

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