Falling commodity prices drive down New Zealand terms of trade

Prices for New Zealand's main export commodities fell 2.8 percent in the September quarter, driving down the country's terms of trade, the government statistics agency said Thursday.

The terms of trade for goods fell 1.8 percent in the September quarter, driven down by falling export prices for dairy, meat and forestry, according to Statistics New Zealand.

The terms of trade, a measure of the purchasing power of a country's exports, had fallen in four of the last five quarters.

A 1.8-percent decrease meant New Zealand could 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 in a statement.

"Meat, dairy, and forestry were all down in price, with meat and dairy seeing significant falls in values as well."

Goods export volumes and values both fell, led by meat and dairy.

Dairy prices fell 3.7 percent in the September quarter, with volumes falling by 19 percent and value by 22 percent.

Forestry prices fell 4.1 percent, led by a fall in the price of wood.

Falls in beef and lamb prices contributed to a 3.1-percent fall in meat prices.

Goods import prices fell 1 percent in the September quarter, led by a 3.7-percent fall in the price of plant and machinery, but this was partly offset by a rise in the price of petroleum and petroleum products. Endit