Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search


NZ terms of trade fall to 3-year low

NZ terms of trade fall to 3-year low as strong kiwi slices into dairy returns

Dec. 3 (BusinessDesk) - New Zealand's terms of trade fell to a three-year low in the September quarter as the country's strong currency ate into returns from an increasing volume of dairy exports.

The terms of trade, which measures how much imports can be bought with a fixed quantity of exports, fell 3.2 percent in the three months ended Sept. 30, according to Statistics New Zealand. That's more than the 1.8 percent forecast in a Reuters survey of economists. Export prices sank 6.3 percent, ahead of the 3.6 percent expected, while import prices declined 3.3 percent versus an anticipated 2 percent fall.

The falling prices came even as export volumes beat expectations, rising 9.7 percent in the quarter, while import volumes advanced 0.7 percent.

Dairy, which accounts for about a quarter of New Zealand's exports, was the biggest contributor to the falling export prices and rising volumes, with volumes surging 32 percent in the quarter, even as prices sank 13 percent.

"Dairy export volumes are at record levels, after adjusting for seasonal effects," prices manager Chris Pike said in a statement. "Dairy values remain at high levels, even though export prices have fallen for five consecutive quarters."

The New Zealand dollar held back export prices, rising 2 percent on a trade-weighted basis in the quarter, Statistics NZ said. The kiwi recently traded at 82.02 US cents and was at 73.41 on a trade-weighted basis.

Today's figures are the latest in a string of official releases showing New Zealand's economic recovery may have slowed in the second half of the year, and come ahead of the Reserve Bank's monetary policy review on Thursday. Governor Graeme Wheeler is expected to keep the official cash rate at 2.5 percent in what is a benign inflation environment.

The terms of trade in the services sector was unchanged in the quarter, with export and import prices both falling 0.7 percent. The fall in export services was driven by lower prices for air transport, while the decline in imports was influenced by cheaper sea transport.

Import prices for petrol and related products shrank 13 percent in the quarter, the sharpest decline across the industries.


© Scoop Media

Business Headlines | Sci-Tech Headlines


Welcome Home: Record High Migration Stokes 41-Year High Population Growth

New Zealand annual net migration hit a new high in October as more people arrived from than departed for Australia for the first time in more than 20 years. More>>


Citizens' Advice Bureau: Report Shows Desperate Housing Situation Throughout NZ

CAB's in-depth analysis of over 2000 client enquiries about emergency accommodation shows vulnerable families, pregnant women and children living in cars and garages, even after seeking assistance from the Ministry of Social Development and Housing New Zealand. More>>


Speaking For The Bees: Greens Call For Neonicotinoid Pesticide Ban

The National Government should ban the use of controversial pesticides called neonicotinoids after evidence has revealed that even at low doses they cause harm to bee populations, the Green Party said today. More>>


Science Awards: NZAS Celebrate NZ Scientific Achievements

The Marsden Medal is awarded for a lifetime of outstanding service to the cause or profession of science, in recognition of service rendered to the cause or profession of science in the widest connotation of the phrase. This year’s medal is awarded to Dr Mike Andrews. More>>


Court Rules: Affco 'Unlawfully' Locked Out Meat Workers

The note says the full court found for the plaintiffs, "that is that the defendant locked out the second plaintiffs unlawfully and that it breached s 32 of the Act by acting otherwise than in good faith towards the plaintiffs while collective bargaining was still going on." More>>


Get More From Scoop

Search Scoop  
Powered by Vodafone
NZ independent news