Export goods prices fell for dairy, meat, and forestry in the September quarter, leaving the terms of trade lower, Statistics NZ said.
The merchandise (goods) terms of trade fell 1.8 percent in the September quarter, due to goods export prices falling more than goods import prices. The terms of trade has fallen in four of the last five quarters.
Terms of trade is a measure of the purchasing power of New Zealand’s exports abroad. A 1.8 percent decrease means New Zealand can buy 1.8 percent less imports for the same amount of exports.
“The fall in our terms of trade is a reflection of the falling prices of our primary produce exports,” international statistics senior manager Jason Attewell said. “Meat, dairy, and forestry were all down in price, with meat and dairy seeing significant falls in values as well.”
Goods export prices fell 2.8 percent, led by falls in the prices of dairy, meat, and forestry. This has fallen four quarters in a row. Goods export volumes and values both fell, led by meat and dairy.
Dairy prices fell 3.7 percent in the September quarter, with volumes and values falling by 19 percent and 22 percent respectively. Forestry prices fell 4.1 percent, led by a fall in the price of wood. Falls in both beef and lamb prices contributed to a 3.1 percent fall in meat prices.
Goods import prices fell 1.0 percent this quarter, led by a fall in the price of plant and machinery (down 3.7 percent).
Fall was partly offset by a rise in the price of petroleum and petroleum products.