Rise continues for terms of trade

The merchandise terms of trade rose 2.1 percent in the June 2010 quarter as export prices rose more than import prices, Statistics New Zealand said today. This means that 2.1 percent more imported goods could be funded by a fixed quantity of exported goods than in the March 2010 quarter.

The latest quarterly rise follows increases of 6.1 percent and 5.8 percent in the March 2010 and December 2009 quarters, respectively. “Despite recent increases, the terms of trade are 3 percent below a 34-year high reached in the March 2008 quarter,” Statistics New Zealand’s prices manager Chris Pike said.

In the June 2010 quarter, prices for exported goods rose 3.8 percent. Dairy prices (up 6.0 percent) and meat prices (up 4.5 percent) had significant impact on the rise. Forestry product prices and petroleum and petroleum product prices also contributed to the latest rise.

Prices for imported goods rose 1.7 percent in the June 2010 quarter. Higher import prices for petroleum and petroleum products (up 4.7 percent) and food and beverages (up 4.3 percent) influenced the latest rise.
Seasonally adjusted export volumes were flat (up 0.3 percent) in the June 2010 quarter, with forestry products, meat, and casein having significant increases. Offsetting these increases were decreases in volumes of fruit, petroleum and petroleum products, and dairy products.

Seasonally adjusted import volumes rose 1.0 percent in the June 2010 quarter, which is the fourth consecutive quarterly rise. Capital goods (assets used in industrial production), and intermediate goods (goods used as inputs in producing other goods) were the main contributors to the rise. Consumption goods and motor spirit volumes fell in the June 2010 quarter.

The price and volume indexes for exports and imports of goods are compiled mainly from overseas merchandise trade data.