Large import price rise leads to terms of trade fall

Large import price rise leads to terms of trade fall – Media release

1 December 2015

The merchandise (goods) terms of trade fell 3.7 percent in the September 2015 quarter, due to import prices rising more than export prices, Statistics New Zealand said today. This fall follows a 1.5 percent rise in the June quarter. Terms of trade is a measure of the purchasing power of New Zealand’s exports abroad. A decrease means New Zealand can buy less imports for the same amount of exports.

Prices for imported goods rose 7.3 percent, their largest increase in seven years, with petroleum products up 13 percent. Exported goods prices rose 3.4 percent, with meat prices up 8.1 percent. Both imports and exports had widespread price increases.

"The New Zealand dollar fell 8.4 percent – its largest quarterly fall in nearly seven years," prices senior manager Chris Pike said. "This pushed up both import and export prices."

Despite the quarterly rise in imported petroleum product prices, they were still 25 percent lower than a year earlier. Excluding petroleum, import prices rose 6.5 percent in the latest quarter.

For beef exports, prices (up 10 percent), seasonally adjusted volumes (up 12 percent), and values (up 23 percent to $0.9 billion) all reached new highs. A small drop in dairy prices (down 0.1 percent) had a flattening effect on overall export prices. Dairy volumes rose 11 percent.

We are importing and exporting more than ever before. Seasonally adjusted goods volumes for imports (up 0.7 percent) and exports (up 3.7 percent) both reached new highs in the September 2015 quarter. Import volumes have reached new highs every quarter since the June 2013 quarter.

The price and volume indexes for exports and imports of goods are compiled mainly from information collected initially in New Zealand Customs Service declarations. We will publish Goods and Services Trade by Country: Year ended September 2015 on 2 December 2015, which provides additional information about the value of economic trade with our main trading partners.

Ends

For more information about these statistics:
• Visit Overseas Trade Indexes (Prices and Volumes): September 2015 quarter (provisional)
• Open the attached files
OverseasTradeIndexesPricesAndVolumesSep15qtr.pdf
otipvSep15qtrpricestables.xls
otipvsep15qtrvolumestables.xls

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