New Zealand's terms of trade rose less than expected in the second quarter with dairy and meat leading export price gains, outpacing an increase in import prices.

The terms of trade rose 1.5 per cent in the second quarter from three months earlier, Statistics New Zealand said. Exports prices rose 2.4 per cent and import prices rose 0.9 per cent. The gain in the terms of trade undershot the forecast for a 3 per cent gain in a Reuters survey while the first-quarter increase was revised down to 3.9 per cent from a provisional estimate of 5.1 per cent.

The trade-weighted index was little changed after the data was released at 75.19.

Statistics New Zealand said the first-quarter revision "mainly reflects a correction in the provisional price of forestry products" that will also "flow through to the expenditure measure of gross domestic product, but is not significant enough to change the overall story."


Dairy export prices rose 3.9 per cent in the second quarter, led by butter reaching an all-time high and cheese, while milk powder fell slightly, Stats NZ said.

Over the past two years, butter exports have been about 20 per cent of the value of New Zealand's dairy exports.

Dairy prices are 40 per cent higher than the recent low of September 2016, but are still 18 percent lower than the March 2014 high, it said.

Meat export prices rose 9.2 per cent in the quarter to come within 1 of their record high of September 2015.

The gain in import prices was led by machinery and electrical equipment, which was offset by a 4.2 per cent fall in petroleum and petroleum product prices.

Export volumes rose 6.8 per cent while import volumes gained 2.3 per cent, resulting in the overall value of exports rising 9 per cent to $12.9 billion in the second quarter while the value of imports rose 2.9 per cent to $13.5 million.