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NZ second-quarter terms of trade fall

NZ Newswire logoNZ Newswire 1/09/2016 Jonathan Underhill

New Zealand's terms of trade fell in the second quarter as dairy products led a decline in export prices and a rebound in crude oil drove up prices of imports.

The terms of trade, which measures the purchasing power of New Zealand's exports abroad, fell 2.1 per cent in the three months ended June 30, Statistic New Zealand said.

Economists had expected a decline of 1.5 per cent. Total export prices fell 1.9 per cent while import prices gained 0.2 per cent.

The value of exports rose 7.6 per cent, seasonally adjusted, as export volumes rose 10 per cent to the highest level since the series began in 1990, the government statistician said.

The gain in export volumes was driven by an 18 per cent increase in milk powder, a 5.3 per cent rise in butter, a 16 per cent gain in beef and an 8.1 per cent rise in other meat.

Dairy products led the decline in prices, with milk powder falling 8.7 per cent, butter down 4.8 per cent and cheese down 5.4 per cent.

Forestry export values rose 7.9 per cent, seasonally adjusted, the fifth quarterly gain in a row, as volumes rose 2.2 per cent and prices gained 0.9 per cent. Fruit values rose 11 per cent to a record as volumes climbed 2.9 per cent and prices gained 0.9 per cent.

Import volume rose 0.7 per cent, also to the highest since the series began in 1990, and the total value of imports gained 1.2 per cent. Petroleum and petroleum products led the gains, with prices jumping 19 per cent in the second quarter.

The volume of imported capital goods rose 22 per cent in the latest quarter, largely due to a 44 per cent gain in industrial transport equipment.


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