NZ terms of trade fall 1.8 per cent in third quarter as meat, dairy export prices, volumes slip

Dairy, meat and forestry shipments led the drop. Photo / Warren Buckland

New Zealand's terms of trade fell in the third quarter, reflecting a decline in the value, price and volume of exports. Dairy, meat and forestry shipments led the drop.

The terms of trade, a measure of the purchasing power of New Zealand's exports, fell 1.8 per cent in the third quarter from the second quarter, Statistics New Zealand said.

Disruptions caused by earthquake damage to the government statistician's Wellington building meant it wasn't able to provide seasonally adjusted figures as it usually does.

In actual terms, export prices for goods fell 2.8 per cent, while volumes declined 16 per cent and the value of exports dropped 18 per cent to $10.3 billion. Import prices fell 1 per cent, volumes rose 14 per cent and the value increased 13 per cent to $13.2 million.

Statistics NZ said the decline in export prices was led by dairy, down 3.7 per cent, a 3.1 per cent drop for meat and a 4.1 per cent fall for forestry. Meat and dairy led the decline in both values and volumes. Export prices in the third quarter were down 10 per cent from the same period of 2015.

The decline in import prices was spread over a range of categories, which was offset by gains for petroleum.

Among New Zealand's biggest trading partners, the terms of trade with China fell 0.5 per cent as export prices fell more than imports, while the volume of exports fell 19 per cent while import volumes rose 19 per cent.

The numbers are unadjusted and likely to be affected by the seasonal nature of much of New Zealand's exports.

The terms of trade with Australia rose 0.4 per cent and to the US it declined 1.4 per cent.