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New Zealand's terms of trade fell a smaller than expected 0.5 per cent in the in the June quarter, as high oil prices lifted the cost of imports.
Publishing the data, Statistics New Zealand (SNZ) said that despite the fall, which followed six consecutive quarterly rises, the terms of trade was still at its second-highest level since March 1974.
The median forecast of economists in a Reuters poll had been for a fall of 1.7 per cent. The terms of trade measures the amount of imports a fixed amount of exports will purchase.
Import prices rose 4.8 per cent, just slightly above expectations, while export prices rose 4.4 per cent, well above the expected 2.5 per cent.
For the year to June export prices were up 18.8 per cent, the biggest increase in seven years. Import prices were up 7.5 per cent for the year.
Seasonally adjusted export volumes were down 3.7 per cent in the June quarter, while import volumes were up 5.4 per cent.
SNZ said food and beverages export prices had risen 3.8 per cent in the quarter, with meat being the main driver, rising 8.2 per cent. Beef and veal prices rose 12.4 per cent, while lamb, hogget and mutton prices were up 5.2 per cent.
Food and beverages export volumes were down 9.2 per cent with dairy products and casein showing the largest falls.
For the year to June, food and beverages export prices rose 28.1 per cent, the highest ever annual increase since the series started in 1971.
In another indication that dairy prices have stopped rising, SNZ said that despite rises for some dairy prices, the dairy products export index showed a marginal decline in the quarter, the first fall since December 2006. For the year the index rose 56.8 per cent.
Export prices for petroleum and petroleum products rose 28.8 per cent in the June quarter, gathering momentum from increased international prices and a depreciating NZ dollar, SNZ said.
Among imports, petroleum and petroleum product prices were up 17.7 per cent. When those products were excluded, import prices were up 2.5 per cent.
Import prices for non-fuel crude materials were up 24.9 per cent, the largest quarterly rise in 33 years, with significant price rises for key fertiliser ingredients, aluminium oxide, and vegetable oils driving up the index.
SNZ said major factors in the rise in import volumes were an oil rig and a floating platform with a combined value of $477 million.
Deutsche Bank chief economist Darren Gibbs said the terms of trade had held up better than he expected.
But the not so good news was that net exports were even weaker, which made it more likely gross domestic product would be negative, and probably substantially negative, in the second quarter.
- NZPA
