Terms of trade highest since 1973

Terms of trade highest since 1973 – Media release

2 December 2013

New Zealand's merchandise terms of trade rose 7.5 percent in the September 2013 quarter, Statistics New Zealand said today. The latest increase was due to export prices for goods rising more than import prices.

“Dairy export prices helped lift the terms of trade to their highest level since 1973," prices manager Chris Pike said. "Both the terms of trade and export prices have been on the rise since the start of this year, reflecting higher dairy prices.”

Terms of trade is a measure of the purchasing power of New Zealand’s exports abroad. An increase means New Zealand can buy more imports for the same amount of exports.

In the latest quarter, the price of exported goods rose 8.9 percent, while seasonally adjusted export volumes fell 2.1 percent. Both price and volume movements were strongly influenced by dairy products.

In the September 2013 quarter, dairy export prices rose 24 percent to their highest level since 2008, and are now 46 percent higher than a year ago. Seasonally adjusted dairy export volumes fell 2.7 percent, which is the fourth consecutive quarterly fall. Seasonally adjusted dairy product values rose 20 percent, following a 4.7 percent fall in the June 2013 quarter.

Prices for imported goods rose 1.2 percent in the September 2013 quarter, after four consecutive falls. Petroleum and petroleum products (up 3.1 percent) contributed the most to the overall increase in import prices due to higher prices for crude oil.

The price and volume indexes for exports and imports of goods are compiled mainly from overseas merchandise trade data.

Visit Overseas Trade Indexes (Prices): September 2013 quarter (provisional)

OverseasTradeIndexesPricesSep13qtrHOTP.pdf

otipsep13qtrpricestables.xls

ENDS

© Scoop Media