Dairy and meat push terms of trade up 2.1pc

Ports of Auckland. Photo / Dean Purcell

Dairy and meat exports were the main contributors to a 3.8 per cent rise in exported goods prices in the June 2010 quarter, Statistics New Zealand (SNZ) reported.

Dairy prices were up 6 per cent and meat prices were up 4.5 per cent. Forestry products, up 4.8 per cent, and petroleum and petroleum product prices, up 4.8 per cent also contributed to the rise.

With the increase in export prices, SNZ said the merchandise terms of trade rose 2.1 per cent, meaning that 2.1 per cent more imported goods could be funded by a fixed quantity of exported goods compared to the March 2010 quarter.

Prices for imported goods rose 1.7 per cent in the latest quarter, influenced by higher petroleum and petroleum products, up 4.7 per cent, and food and beverages, up 4.3 per cent.

ANZ Bank economist Mike Smith said the composition of the lift in import volumes suggested that New Zealand households remained cautious.

"However the 23 per cent surge in passenger motor car imports in the quarter suggests that importers believe a pre-GST spend-up on consumer durables is on the cards. The pick-up in other consumer durable imports (up 5.7 per cent) is also suggestive that other retailers believe this is also likely to occur."

The terms of trade for services fell 0.7 per cent, following a similar fall of 0.9 per cent in the March 2010 quarter. The fall was mainly due to services export prices, down 1.6 per cent, decreasing more than import prices, down 0.9 per cent.

The overall export volumes were flat, up 0.3 per cent.

Forestry products, meat and casein had significant increase seasonally adjusted export volumes. Though offsetting these increases were falls in volumes of fruit, petroleum and petroleum products, and dairy products.

Seasonally adjusted import volumes rose 1 per cent in the June 2010 quarter, which is the fourth consecutive quarterly rise. Capital goods, which are assets used in industrial production, up 15.8 per cent, and intermediate goods, which are used as inputs in producing other goods, up 5 per cent, were the main contributors to the rise.

Consumption goods and motor spirit volumes fell in the June 2010 quarter.

- NZPA / HERALD ONLINE