Tuesday 1st December 2015 |
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New Zealand's terms of trade fell more than expected in the third quarter as petroleum products drove up import prices, outpacing a gain in export prices that was led by meat.
The merchandise terms of trade fell 3.7 percent in the third quarter, following a gain of 1.5 percent three months earlier, Statistics New Zealand said. A decline of 2.8 percent was expected for the third quarter, according to a Reuters poll. The terms of trade is a measure of the purchasing power of New Zealand's exports, and the decline means 3.7 percent less imports of goods could be funded by a fixed quantity of exports compared to the June quarter.
The nation's terms of trade reached a 40 year high last year as the kiwi dollar climbed above 88 US cents, making imports cheaper and offsetting the impact of falling commodity prices. Since then the currency has retreated to trade recently at 65.84 cents. The trade-weighted index fell 8.4 percent in the third quarter, the biggest decline since 2008, which drove up both import and export prices, the government statistician said.
The value of exports rose 6.5 percent to $12.3 billion in the third quarter from three months earlier, as volumes rose 3.7 percent and prices gained 3.4 percent. Meat export prices rose 8.1 percent to a record high in the third quarter, driven by beef prices, while volumes climbed 9.8 percent. The value of meat exports rose 16 percent to $1.9 billion. Prices, volume and value of beef exports all reached a record in the latest quarter, while lamb also rose on those three measures.
Forestry product export prices rose 7.5 percent, while the volume fell 1.2 percent. The value of forestry exports rose 5.2 percent. Dairy export prices fell 0.1 percent in the quarter, while the volume rose 11 percent and the value gained 9.7 percent.
The value of imports rose 7.2 percent to $13 billion, as prices rose 7.3 percent and volumes edged up 0.7 percent. Petroleum and petroleum product prices gained 13 percent in the quarter while volumes dropped 21 percent to a five-year low. The value of petroleum imports fell 10 percent. Statistics New Zealand said a maintenance shutdown at the Marsden Point refinery in May explains volatility in volumes, which jumped in the second quarter.
Prices of imported capital goods rose 7.9 percent in the quarter, while the volume rose 45 percent, mainly reflecting aircraft imports. Consumption goods import prices rose 7 percent to a record and volumes gained 3.8 percent. Prices of intermediate goods imports rose 7.1 percent and volumes rose 1.1 percent, led by primary fuels.
The services terms of trade fell 5.4 percent in the latest quarter as import prices rose 7.3 percent, outpacing a 1.6 percent gain in export prices.
BusinessDesk.co.nz
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