The merchandise terms of trade fell 1.3 percent in the December 2012 quarter, due to export prices falling more than import prices, Statistics New Zealand said today.
This means that in the December 2012 quarter, 1.3 percent less merchandise imports could be funded by a fixed quantity of merchandise exports than in the September 2012 quarter.
"The terms of trade have fallen 11 percent from their peak in the June 2011 quarter and are now at their lowest level for three years," prices manager Chris Pike said.
In the December 2012 quarter, export prices fell 1.9 percent, reflecting lower prices for dairy and for fish and fish preparations. Dairy prices have fallen for six consecutive quarters by a total of 27 percent, while the trend for dairy volumes has risen 24 percent. The fall in dairy prices from their 2011 peak influenced the downward trend in the terms of trade.
Prices for imported goods fell 0.6 percent in the December 2012 quarter, reflecting falls in capital goods (tangible assets used to produce goods or services), consumption goods, and intermediate goods (goods used up or transformed when producing other goods). Excluding petroleum and petroleum product prices, total imports fell 1.5 percent.
Seasonally adjusted export volumes fell 0.5 percent. The trend for export volumes remains at a high level. Dairy and fruit were the main contributors to the overall fall in export volumes.
Seasonally adjusted import volumes fell 2.2 percent, reflecting lower volumes for motor spirit, consumption goods, and intermediate goods. The volume of imported capital goods partly offset this fall.
Excluding petroleum and petroleum products, seasonally adjusted import volumes fell 0.9 percent.
The price and volume indexes for exports and imports of goods are compiled mainly from overseas trade data.
Overseas Trade Indexes (Volumes): December 2012 quarter (provisional) – Information release
Overseas Trade Indexes (Prices): December 2012 quarter (provisional) – Information release