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


NZ import prices outpace exports on weak kiwi

NZ import prices rise more than exports as kiwi dollar weakens

March 11 – Prices for New Zealand imports rose by more than export prices, reflecting a weakening New Zealand dollar.

Import prices rose 3.4% in the three months ended Dec. 31, from the third quarter, according to Statistics New Zealand. Export prices unexpectedly rose 2.5%, resulting in a 0.9% decline in the nation’s terms of trade. That’s well below the 2% drop in a Reuters survey.

The New Zealand dollar has tumbled 23% against the U.S. dollar in the past six months, driving up the cost of imports such as machinery and computers. At the same time, a weak currency has swelled the value of exports such as dairy products, meat and timber. The currency may extend its decline with Reserve Bank Governor Alan Bollard expected to cut the official cash rate by 50 basis points to 3% tomorrow.

“The smaller-than-anticipated deterioration in the terms of trade means that this channel of influence from the rest of the world is holding up better than expected, so far,” said Robin Clements, economist at UBS New Zealand.

“In the absence of a sharp collapse, the fall in the exchange rate more than compensates, meaning that the real exchange rate relative to the terms of trade is now a pro-growth factor looking ahead,” he said.

Food and beverage export prices rose 6.5% in the fourth quarter, led by a 5.8% gain in milk products and a 4.9% rise in meat. Prices for forest products rose 11.2%.

Petroleum products contributed the biggest decline to export prices, falling 32%.

Mechanical machinery import prices jumped 18% in the latest quarter, on computers and machinery parts, while crude oil import prices dropped 29%, reflecting declining world prices for crude oil.

Export volumes declined 1.8%, led by crude oil and logs while import volumes fell 4.8% on vehicles, machinery and consumer goods.


© Scoop Media

Business Headlines | Sci-Tech Headlines


Reserve Bank: Official Cash Rate Unchanged At 1 Percent

The Monetary Policy Committee has decided to keep the Official Cash Rate (OCR) at 1.0 percent. Employment remains around its maximum sustainable level while inflation remains below the 2 percent target mid-point but within our target range... More>>


Food Prices: Avocados At Lowest Price In Almost Three Years

Avocados are at their cheapest average price since February 2017, with tomato, lettuce, and cucumber prices also falling, Stats NZ said today. More>>

Auckland Port Move: Cabinet Ministers Deliberate On Report

Cabinet ministers now have a copy of a report urging the government to move the Auckland port up north, but say no final decisions have been made. More>>


Toxicology Tests Planned: Dead Rats Washed Up On Beaches

As many as 600 rats washed up on Westport's North Beach over the weekend to the horror of locals. DOC said they may have been killed by a recent 1080 poison drop 140km away and washed down the Buller River after heavy rain battered the coast. More>>