Terms of trade index improves

Export prices rose faster than import prices in the June quarter, lifting the merchandise terms of trade 0.7 per cent, Statistics New Zealand said today.

The terms of trade index measures how many goods can be imported for every dollar of exports.

Merchandise export prices were up 8 per cent and import prices were up 7.2 per cent.

The rise in export prices was the largest increase since the September 2000 quarter, when the index rose 10.6 per cent.

The most significant contributor to the rise was the food and beverages index (up 7.1 per cent), which was driven by higher meat prices (up 7.7 per cent).

The rise in the import price index was the largest quarterly rise since the December 2000 quarter, when the index rose 7.8 per cent.

It was fuelled by increases in the petroleum and petroleum products.

Overall, the depreciation of the New Zealand dollar against our trading partners' currencies was the major driver of price increases for merchandise trade, SNZ.

Seasonally adjusted merchandise export volumes rose 1.5 per cent, with dairy products, up 21.1 per cent, the main contributor. The dairy products index is at its highest, following a record season for dairy production.

Seasonally adjusted merchandise import volumes fell 3 per cent during the June 2006 quarter.

- NZPA