Terms of trade improve

By Phil Boeyen, ShareChat Business News Editor

Wednesday 12th December 2001

New Zealand's terms of trade have improved as import prices fall faster than export prices.

Statistics New Zealand says the country's export price index fell by 0.6% in the September quarter but this was outweighed by the import price index which dropped by 1.7%.

As a result, the merchandise terms of trade rose 1.1% following a fall of 0.4% in the June quarter. A rise in the terms of trade means that more imports can be funded by a fixed quantity of exports.

"The appreciation of the New Zealand dollar in the September 2001 quarter contributed to the decreases in export and import prices," Statistics New Zealand says.

"The larger fall in import prices reflects the appreciation of the exchange rate used on the import documentation in the September 2001 quarter."

Price decreases for the three month period were recorded in the non-food manufacture commodities for exports and most of the main commodities for imports in the latest quarter. Excluding mineral fuels (mainly petroleum and petroleum products) the total import price index fell 1%.

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