Terms of trade fall in September quarter

Photo / Kenny Rodger.

New Zealand's terms of trade fell 1.3 per cent in the September quarter to the lowest level since the end of 2005.

The terms of trade index measures the amount of imports a fixed amount of exports will purchase.

Publishing the latest data today, Statistics New Zealand (SNZ) said the September quarter fall was due to export prices falling more than import prices.

Export prices fell 5.2 per cent, with a 7.2 per cent fall in food and beverage prices due to lower dairy prices, the most significant factor, SNZ said.

Import prices dropped 3.9 per cent, with mechanical machinery prices down 11.3 per cent.

Seasonally adjusted export volumes rose 1 per cent in the September quarter, mainly driven by a 3.2 per cent rise in dairy products and a 12.6 per cent rise in petroleum and petroleum products.

Dairy volumes were at their highest level since the series started in 1990 and were more than 50 per cent higher than the recent low in the drought-affected June 2008 quarter, SNZ said.

Import volumes rose a seasonally adjusted 1.9 per cent, the first rise since June 2008, with higher volumes of intermediate goods and passenger cars contributing most to the rise. Falls in capital goods had a significant offsetting effect.

- NZPA