Dollar helps lift terms of trade 1.3%

Economists had expected a decline of 1.9 per cent in the latest quarter compared with three months earlier, based on a Reuters poll.

New Zealand's terms of trade unexpectedly rose in the second quarter as a slide of almost 10 per cent in the Kiwi dollar helped lift prices of exports such as dairy products.

The terms of trade rose 1.3 per cent in the three months ended June 30 compared with the first three months of the year, and were down 4.4 per cent from the second quarter of 2014, according to Statistics New Zealand.

Economists had expected a decline of 1.9 per cent in the latest quarter compared with three months earlier, based on a Reuters poll.

Export prices rose 2.1 per cent and volumes declined 0.2 per cent, while import prices rose 0.7 per cent and import volumes dropped 0.4 per cent.

Export dairy prices rose 6 per cent in the June quarter, after four straight quarters of decline, which the government statistician attributed to a weaker currency. Dairy volumes declined 4 per cent. Excluding dairy, export prices fell about 0.1 per cent.

Meat export prices fell 1.9 per cent in the latest quarter and volumes dropped 4.2 per cent, led by beef and lamb. Prices of forest product exports fell 5.8 per cent while volumes rose 1.9 per cent.

Petroleum prices contributed most to the increase in import prices, gaining 4.1 per cent, while volumes jumped 18 per cent to the highest level since the series began in 1971. Activity was affected by a shutdown at the Marsden Point refinery.

Prices of imported intermediate goods rose 1.9 per cent and the volume declined 3.2 per cent, while consumption goods prices rose 0.2 per cent and volume gained 8.9 per cent. Among other goods, the volume of cars rose 18 per cent while prices fell 0.5 per cent.