Merchandise terms of trade data continues recent trade downturn

National’s Trade Spokesperson Lockwood Smith says the merchandise terms of trade data for the September quarter confirm the recent negative trade trend.

“In early November the export trade figures for the September quarter
showed a decline of 8% compared with last year. In late November the
figures for October continued the trend, being 8.5% down on the October quarter last year.

“The terms of trade figures released today for the September quarter confirm a serious picture. The September quarter was the fifth successive quarter where export prices have declined. Compared with the September quarter last year, export prices are down 12%.

“Prices for agricultural exports are down almost 19% compared with the September quarter last year, with diary prices down over 36%. Diary prices in the September quarter were in fact at their lowest level for 11 years.

“High levels of immigration continue to drive the volume of consumption goods being imported. A 4.1% increase in the volume of consumer goods imported in the September quarter followed increases of 5.4% in the June quarter and 5.3% in the March quarter. While that demand has helped maintain the Government’s economic growth figures, the consequent blow-out in the trade balance can’t be sustained forever.

“A number of the policies implemented by the Labour led Government have been negative towards the competitive position of our exporters. It leaves them in a vulnerable position, as they now have to cope with declining export prices,” Dr Smith said.

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