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

 

NZ terms of trade sets new 40-year high in 2nd quarter

NZ terms of trade sets new 40-year high as cheaper imports offset falling exports

By Suze Metherell

Sept. 1 (BusinessDesk) - New Zealand's terms of trade held at a 40-year high in the second quarter, as a high New Zealand dollar pushed down the price of imports, offsetting a decline in exports.

Terms of trade, which measures the quantity of imports the country can buy with a set amount of exports, edged up 0.3 percent in the three months ended June 30, from a previous quarterly gain of 1.8 percent in the first quarter of this year, according to Statistics New Zealand. The measure is at its highest level since September 1973. The quarterly gain compares with a forecast 2.3 percent drop in a Reuters survey.

The terms of trade was largely expected to have peaked in the first quarter, with economists expecting a correction as prices for dairy products, New Zealand's largest export, have tumbled some 40 percent at the GlobalDairyTrade auction since the start of the year. Last week New Zealand posted its first monthly trade deficit for the month of July, meaning more was coming into the country than going out, as the price of logs, the third largest export, dropped some 16 percent in the year. The series is now just 1.3 percent below its all-time high in the June 1973 quarter.

"For a change weak import prices, drove the terms of trade improvement, rather than improving export prices that we have seen in previous quarters," said Nathan Penny, economist at ASB Bank. "However, that record-high is set to live another day as we expect the terms of trade to fall from next quarter. The export price falls this quarter give just a taste of what is to follow."

In the second quarter New Zealand's trade weighted index, the Reserve Bank's preferred measure of the dollar against a basket of export partners' currencies, rose 1.9 percent. A rising dollar pushes down the price of both exports and imports, Statistics NZ said. The TWI was recently at 78.93, slightly higher than 78.88 immediately before the data was released.

Export prices overall dropped 2 percent in the quarter, while excluding dairy it fell 1.2 percent. Dairy prices declined 4.3 percent in the quarter, and was up 20 percent from the same quarter a year earlier. Forestry product prices declined 6.5 percent in the quarter, and slipped 0.3 percent in the year. Meat prices rose 0.1 percent on a quarterly basis, and advanced 8.3 percent in the year.

Import prices fell 2.3 percent in the quarter, with declines across all measures led by 3.9 percent quarterly drop in petroleum products, while it declined 4.3 percent from the same quarter a year earlier. Electrical machinery and apparatus also dropped 3.9 percent, and were down 14 percent in the year.

Seasonally adjusted, export volumes fell 5.3 percent in the quarter, the largest fall since March 2008, led by an 8.3 percent drop in meat export volumes, while forestry also fell 8.3 percent and dairy volume decreased 2 percent.

Seasonally adjusted import volumes advanced for its seventh consecutive quarter, up 3.6 percent, lead by capital goods, Statistics New Zealand said.

(BusinessDesk)

© Scoop Media

 
 
 
Business Headlines | Sci-Tech Headlines

 


Statistics: Annual Inflation Hits A Three-decade High At 5.9 Percent
The consumers price index increased 5.9 percent from the December 2020 quarter to the December 2021 quarter, the biggest movement since a 7.6 percent annual increase in the year to the June 1990 quarter, Stats NZ said today... More>>



Digitl: Bumper year ahead for NZ IT sector

Gartner says New Zealand spending on technology products and services will grow 7.4 percent this year. The company’s latest forecast says the market will total NZ$15.3 billion in 2022... More>>



Fonterra: Lifts Forecast Farmgate Milk Price Range

Fonterra Co-operative Group today lifted its 2021/22 forecast Farmgate Milk Price range to NZD $8.90 - $9.50 per kgMS, up from NZD $8.40 - $9.00 per kgMS. This increases the midpoint of the range, which farmers are paid off... More>>



Skoltech: Study Probes Earth’s Turbulent Past To Explain Where Oceans Came From

The origin of water on our planet is a hot question: Water has immense implications for plate tectonics, climate, the origin of life on Earth, and potential habitability of other Earth-like planets. In a recent study in Physical Review Letters, a Skoltech professor and his Chinese colleagues suggest... More>>


Statistics: Household Net Worth Grows In The September 2021 Quarter But At A Slower Pace Compared To March 2021

Household net worth grew by $60.7 billion in the September 2021 quarter compared with the June 2021 quarter, Stats NZ said today. This represents an increase of 2.5 percent, a similar result to the June 2021 quarter, which was up $60.6 billion or 2.6 percent... More>>

TradeMe: Job Market Ends 2021 On A High With Record Number Of Vacancies
The New Zealand job market finished 2021 on a high note, with the ball still firmly in the job hunters’ court, according to the analysis of 69,600 vacancies listed on Trade Me Jobs for the quarter ending 31 December (Q4)... More>>