Terms of trade continues to rise
3 June 2014
In the March 2014 quarter, the merchandise terms of trade rose 1.8 percent, Statistics New Zealand said today. The
latest increase was due to export prices rising and import prices falling.
Terms of trade is a measure of the purchasing power of New Zealand’s exports abroad. An increase means New Zealand can
buy more imports for the same amount of exports.
“Five consecutive quarterly rises have lifted the terms of trade to its highest level since the September 1973 quarter,”
prices manager Chris Pike said. The terms of trade is now 1.7 percent below its all-time high in the June 1973 quarter.
In the March 2014 quarter, the price of exported goods rose 0.8 percent, and seasonally adjusted export volumes rose 1.6
percent. The trend for export volumes has reached a new high, and is 4.2 percent higher than the previous high point in
the December 2012 quarter.
Dairy prices (up 2.3 percent) were the top contributor to total export prices. Seasonally adjusted dairy volumes fell
4.3 percent, following a 24 percent rise in the previous quarter.
Meat prices rose 2.1 percent and meat volumes rose 6.6 percent, leading the rise in export values. The trend for meat
volumes has reached a new high – it is now 5.3 percent higher than the previous high point in the September 2006
Prices for imported goods fell 1.0 percent in the March 2014 quarter, following a 2.7 percent fall in the previous
quarter. Petroleum and petroleum products (down 3.5 percent) contributed the most to the overall decrease in import
prices due to lower prices for crude oil.
Import volumes rose 2.3 percent, following a flat December 2013 quarter. The trend for import volumes has been rising
for six consecutive quarters – by a total of 14 percent.
The price and volume indexes for exports and imports of goods are compiled mainly from overseas merchandise trade data.