New Zealand Terms Of Trade Contract 3.7% In Q3

(RTTNews) - New Zealand's terms of trade slid 3.7 percent on quarter in the third quarter of 2015, Statistics New Zealand said on Tuesday.

That missed forecasts for a decline of 2.6 percent following the upwardly revised 1.5 percent gain in the second quarter (originally 1.3 percent).

Export prices for goods rose 3.4 percent, while import prices for goods rose 7.3 percent. The depreciating New Zealand dollar had an upwards impact on both import and export prices, the stats bureau noted.

Prices for imported goods rose 7.3 percent, their largest increase in seven years, with petroleum products up 13 percent. Exported goods prices rose 3.4 percent, with meat prices up 8.1 percent. Both imports and exports had widespread price increases.

"The New Zealand dollar fell 8.4 percent - its largest quarterly fall in nearly seven years," prices senior manager Chris Pike said. "This pushed up both import and export prices."

Despite the quarterly rise in imported petroleum product prices, they were still 25 percent lower than a year earlier. Excluding petroleum, import prices rose 6.5 percent in the latest quarter.

For beef exports, prices (up 10 percent), seasonally adjusted volumes (up 12 percent), and values (up 23 percent to $0.9 billion) all reached new highs. A small drop in dairy prices (down 0.1 percent) had a flattening effect on overall export prices. Dairy volumes rose 11 percent.

New Zealand is importing and exporting more than ever before. Seasonally adjusted goods volumes for imports (up 0.7 percent) and exports (up 3.7 percent) both reached new highs in the third quarter. Import volumes have reached new highs every quarter since the June 2013 quarter, the bureau added.

Terms of trade is a measure of the purchasing power of New Zealand's exports abroad. A decrease means New Zealand can buy less imports for the same amount of exports.