NZ terms of trade up in March

Rising international prices for key exports including lamb, casein and logs at a time the New Zealand dollar also rose caused New Zealand's March quarter terms of trade to outstrip expectations.

The terms of trade, which measures the amount of imports a fixed amount of exports will purchase, rose 2.2 per cent to 1104 in the three months to March Statistics New Zealand (SNZ) said.

Economists polled by Reuters had expected a decrease of 0.3 per cent.

The rise came on 0.2 per cent rise in export prices during the quarter and a 1.9 per cent decrease in import prices.

Economists had expected a 0.5 per cent decline in export prices and no change in import prices.

SNZ said the rise in export prices came in spite of a concurrent rise in the value of New Zealand dollar.

Measured on a trade weighted index basis, the kiwi was 1.4 per cent higher in the March quarter than in the December quarter.

Much of the increase in export prices came from a 2.1 per cent increase in the meat index -- largely on a 7.6 per cent rise in lamb prices.

Also contributing were higher prices for casein, aluminium and logs.

The fall in import prices was led by an 8.6 per cent decline in the petroleum and related products index.

However, the volume of exports fell 1.9 per cent after an 8.3 per cent increase in the December quarter. The non-food manufactured goods index was the main contributor to the decrease in total exports, SNZ said.

Import volumes were up 2.9 per cent over the quarter driven by a 44 per cent rise in motor spirit or petrol imports.

Compared with the same quarter last year, the terms of trade index was up 4.4 per cent with exports up 4.9 per cent and imports up 0.5 per cent.

- NZPA