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


NZ terms of trade reaches new 40-year high in 4th quarter

NZ terms of trade reaches new 40-year high in 4th-qtr as import prices fall

March 3 (BusinessDesk) - New Zealand’s terms of trade rose to a 40-year high for the second straight quarter in the final three months of 2013 as import prices fell more than export prices. On a volume measure, dairy products led exports higher while imports were unchanged.

Terms of trade, which measures the quantity of imports the country can buy with a set amount of exports, gained 2.3 percent in the fourth quarter to the highest level since December 1973, according to Statistics New Zealand. It would need to climb another 3.5 percent to match the all-time high recorded in the June quarter of 1973.

The kiwi dollar recently traded at 83.73 US cents, up from 83.58 cents immediately before the figures were released at 10:45am. The gain in terms of trade exceeded the 2 percent forecast in a Reuters survey.

Export prices fell 0.5 percent, against expectations of a 1 percent gain, while import prices declined 2.8 percent versus a forecast 1 percent decline. That follows an 8.9 percent gain in export prices in the third quarter, led by a surge in milk powder and butter, and gains for forestry and meat.

Dairy export prices fell 1.1 percent in the fourth quarter, the only decline recorded in 2013, while forestry dropped 2.1 percent. Wool prices rose 8.7 percent and meat was up 0.2 percent.

Export volumes rose 9.7 percent, led by a 23 percent gain in dairy products, helping lift the actual value of dairy exports by 27 percent even as prices fell. Meat volumes climbed 5.5 percent, while petroleum products fell 24 percent and forestry volumes were down 0.5 percent. Import volume were unchanged as a 7.8 percent decline for capital goods was offset by a 75 percent jump in petrol and avgas volumes, a 2.1 percent gain for intermediate goods and consumption goods, and a 6.2 percent increase in cars.

The decline in import prices was led by a 3.8 percent drop in mechanical machinery, a 3.7 percent fall for chemicals and a 5.2 percent decline for electrical machinery, with some of the drop attributable to a strong New Zealand dollar, the government statistician said.

“The sky-high terms of trade will provide a key pillar of support to stronger growth in the New Zealand economy this year,” said Anne Boniface, senior economist at Westpac Banking Corp.

“While we don't think the terms of trade can continue to head north forever, we do suspect a good chunk of the recent strength in the terms of trade reflects structural changes in the drivers of New Zealand's key exports - in particular, increased demand for New Zealand's commodity exports from China and other emerging economies,” she said in a note.

The terms of trade for services such as tourism rose 1.5 percent, with a 0.2 percent gain in services export prices and a 1.3 percent decline for imports.


© Scoop Media

Business Headlines | Sci-Tech Headlines


Trade: NZ Trade Deficit Widens To A Record In September

Oct. 27 (BusinessDesk) - New Zealand's monthly trade deficit widened to a record in September as meat exports dropped to their lowest level in more than three years. More>>


Animal Welfare: Cruel Practices Condemned By DairyNZ Chief

DairyNZ chief executive Tim Mackle says cruel and illegal practices are not in any way condoned or accepted by the industry as part of dairy farming.

Tim says the video released today by Farmwatch shows some footage of transport companies and their workers, as well as some unacceptable behaviour by farmers of dragging calves. More>>


Postnatal Depression: 'The Thief That Steals Motherhood' - Alison McCulloch

Post-natal depression is a sly and cruel illness, described by one expert as ‘the thief that steals motherhood’, it creeps up on its victims, hiding behind the stress and exhaustion of being a new parent, catching many women unaware and unprepared. More>>


DIY: Kiwi Ingenuity And Masking Tape Saves Chick

Kiwi ingenuity and masking tape has saved a Kiwi chick after its egg was badly damaged endangering the chick's life. The egg was delivered to Kiwi Encounter at Rainbow Springs in Rotorua 14 days ago by a DOC worker with a large hole in its shell and against all odds has just successfully hatched. More>>


International Trade: Key To Lead Mission To India; ASEAN FTA Review Announced

Prime Minister John Key will lead a trade delegation to India next week, saying the pursuit of a free trade agreement with the protectionist giant is "the primary reason we're going" but playing down the likelihood of early progress. More>>



MYOB: Digital Signatures Go Live

From today, Inland Revenue will begin accepting “digital signatures”, saving businesses and their accountants a huge amount of administration time and further reducing the need for pen and paper in the workplace. More>>

Oil Searches: Norway's Statoil Quits Reinga Basin

Statoil, the Norwegian state-owned oil company, has given up oil and gas exploration in Northland's Reinga Basin, saying the probably of a find was 'too low'. More>>


Modern Living: Auckland Development Blowouts Reminiscent Of Run Up To GFC

The collapse of property developments in Auckland is "almost groundhog day" to the run-up of the global financial crisis in 2007/2008 as banks refuse to fund projects due to blowouts in construction and labour costs, says John Kensington, the author of KPMG's Financial Institutions Performance Survey. More>>


Get More From Scoop

Search Scoop  
Powered by Vodafone
NZ independent news