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

 


NZ terms of trade edges closer to all-time high

NZ terms of trade edges closer to all-time high

By Jonathan Underhill

June 3 (BusinessDesk) - New Zealand’s terms of trade edged closer to an all-time high in the first quarter as dairy products led a gain in export prices and petroleum products led import prices lower.

Terms of trade, which measures the quantity of imports the country can buy with a set amount of exports, gained 1.8 percent in the fourth quarter to the highest level since September 1973, according to Statistics New Zealand. It is now just 1.7 percent below its all-time high in the June 1973 quarter. The quarterly gain matched expectations in a Reuters survey.

The terms of trade may be close to peaking, as prices of dairy products have tumbled 23 percent on the GlobalDairyTrade platform in the past four months. Dairy prices rose 2.3 percent in the first quarter and have gained 42 percent in the year to be within 4.7 percent of a record level reached in the fourth quarter of 2008, today's figures showed. Dairy led a 4 percent drop in the ANZ Commodity Price Index in April, to an eight-month low, and data for May, due out tomorrow, is expected to show prices fell further.

"There will be some correction" in the terms of trade, said Robin Clements, senior economist at UBS New Zealand. "They will still remain very high compared to historical trends" but "the momentum of growth, the contribution to nominal GDP, will be down."

Export prices overall rose 0.8 percent in the first quarter. Among other gainers, meat advanced 2.1 percent and was up 6.6 percent in the year, to be 9.7 percent below its June 2011 peak. Forestry prices gained 1.6 percent in the quarter and 10 percent in the year.

Import prices declined 1 percent, led by a 3.5 percent drop in petroleum products, which were also down 3.5 percent in the year. Electrical machinery import prices fell 1.8 percent in the quarter and 12 percent in the year. Prices of fertiliser jumped 17 percent in the first quarter to be down 14 percent in the year.

Export volumes rose 1.6 percent in the first quarter, led by meat while import volumes gained 2.3 percent.

The trade-weighted index was recently at 78.98, down from 79.19 immediately before the data was released. The TWI rose 1.8 percent in the first quarter, which has a downward influence on both export and import prices.

(BusinessDesk)

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Housing: Affordability Drops 14%, Driven By Auckland Prices

Housing affordability across New Zealand fell 14 percent in the year ending November 2014, with Auckland’s lack of affordability set to reach levels it hit during the height of the global financial crisis, according to the latest Massey University Home Affordability Report More>>

ALSO:

The Dry: Fonterra Drops Forecast Milk Volumes By 3.3 Percent

Fonterra Cooperative Group, the worlds largest dairy exporter, reduced its milk volume forecast for the 2014-2015 season by 3.3 per cent due to the impact of dry weather on production in recent weeks. More>>

ALSO:

Strike: Lyttelton Port Workers Vote To Escalate Dispute

Members of the Rail and Maritime Transport Union (RMTU) at Lyttelton Port today voted to escalate their industrial action. Around 200 RMTU members have been operating an overtime ban since 17 December and today they endorsed a series of full withdrawals of labour at the port. More>>

ALSO:

Scoop Business: NZ Dollar Falls To 3-Year Low As Investors Favour Greenback

The New Zealand dollar fell to its lowest in more than three years as investors sold euro and bought US dollars, weakening other currencies against the greenback. More>>

ALSO:

Scoop Business: NZ Govt Operating Deficit Smaller Than Expected

The New Zealand’s government’s operating deficit was smaller than expected in the first five months of the financial year as a clampdown on expenditure managed to offset a shortfall in the tax-take from last month’s forecast. More>>

ALSO:

0.8 Percent Annually:
NZ Inflation Falls Below RBNZ's Target

New Zealand's annual pace of inflation slowed to below the Reserve Bank's target band in the final three months of the year, giving governor Graeme Wheeler more room to keep the benchmark interest rate lower for longer.More>>

ALSO:

Get More From Scoop

 
 
Standards New Zealand

Standards New Zealand
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news