Value of exports rises to match 2008 high point

The relative value of New Zealand's exports rose a further 3 per cent in the September quarter, to a level seen only once before in the past 36 years.

That was in March 2008 before commodity prices tumbled as the global financial crisis hit.

The latest rise means that a fixed quantity of exports would fund the purchase of 3 per cent more imports than in June and 18 per cent more than a year ago. Export prices were flat overall, as lower prices for forest products, fruit and oil were offset by a 7 per cent rise in dairy prices.

But import prices fell 3 per cent.

A major contributor was a 7 per cent fall in oil prices. Oil prices rose in the two previous quarters, but were 40 per cent below their peak in September 2008, Statistics NZ said.

On volumes, though, the September quarter was less positive. Export volumes fell 2.9 per cent, led by a 19 per cent fall in meat exports to the lowest level for eight years.

This was a hangover of last season's drought forcing farmers to send stock to the works much earlier than usual, Bank of New Zealand economist Craig Ebert said.

Dairy export volumes fell too, for the fourth quarter in a row, and are now 10 per cent off their highs a year ago.

Forest product exports also fell, reversing most of the gains of the previous two quarters.

Exports of manufactured goods rose 4 per cent and were up 10 per cent for the year.

Westpac economist Michael Gordon said: "Clearly those manufacturers focused on the domestic market are the ones doing it tough - faced with a double whammy of soft demand and increased competition from imports."

Import volumes rose 3.7 per cent. The main contributor was a 26 per cent increase in imports of capital goods (excluding transport equipment).

Imports of consumer goods and cars posted more modest increases of 2.5 and 2.7 per cent, respectively.

Ebert said that yesterday's increase in Fonterra's forecast payout would boost dairy revenues by about $450 million so that payout for the 2010/11 season would be about 16 per cent above last season's.

The Reserve Bank, in its most recent forecasts released on Thursday, sees the terms of trade as close to peaking, but expects it to remain at historically high levels.