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Overseas Trade Indexes (Prices): March 2013 quarter (provisional)
Embargoed until 10:45am  –  31 May 2013
Commentary

Overview for the March 2013 quarter

The merchandise terms of trade rose 4.1 percent in the March 2013 quarter, due to export prices rising and import prices falling.

  • Export prices for goods rose 1.9 percent.
  • Import prices for goods fell 2.1 percent.

This means that in the March 2013 quarter, 4.1 percent more merchandise imports could be funded by a fixed quantity of merchandise exports than in the December 2012 quarter. The increase in the terms of trade follows six consecutive quarterly falls. The terms of trade are now at a similar level to the June 2012 quarter.

The services terms of trade rose 3.3 percent in the March 2013 quarter, due to export prices falling less than import prices.

Export prices rise

After four consecutive quarterly falls, export prices rose 1.9 percent in the March 2013 quarter. They are now 13 percent lower than the recent high in the June 2011 quarter.

The Reserve Bank trade weighted index rose 3.1 percent in the March 2013 quarter. A rising New Zealand dollar has a downward influence on export prices.

Dairy prices contribute significantly to the rise in export prices

Dairy prices (up 6.8 percent) made the most significant contribution to the rise in export prices in the March 2013 quarter. This is the first quarterly rise since a 4.5 percent increase in the June 2011 quarter. Dairy prices are still 22 percent lower than the previous peak in the June 2011 quarter.

The rise in dairy prices was influenced by:

  • milk powder (up 8.7 percent)
  • butter (up 3.9 percent)
  • cheese (up 4.1 percent).

Graph, Export price index, selected commodities, quarterly, March 2009 to March 2013.

In the year to the March 2013 quarter, dairy prices fell 12 percent, following a 7.1 percent fall in the year to the March 2012 quarter.

Forestry prices rise 2.4 percent 

Forestry product prices (up 2.4 percent) also contributed to the rise in total export prices. This rise follows four consecutive falls since the March 2012 quarter. The rise in forestry product prices was mainly influenced by wood prices (up 5.0 percent).

In the year to the March 2013 quarter, forestry product prices rose 0.7 percent, compared with a 13 percent fall in the year to the March 2012 quarter.  

Graph, Forestry products exports index, annual change from the same quarter of the previous year, March 2008 to March 2013.

Meat prices make downward contribution to export prices

Meat prices fell 3.1 percent in the March 2013 quarter, compared with a rise of 0.4 percent in the December 2012 quarter and a fall of 5.9 percent in the September 2012 quarter. Lower prices for lamb made a significant contribution to the fall in meat prices.

In the year to the March 2013 quarter, meat prices fell 11 percent, following four consecutive falls since the year to the March 2012 quarter.  

Graph, Meat export price index, annual change from the same quarter of the previous year, March 2008 to March 2013.

Import prices fall

Import prices fell 2.1 percent in the March 2013 quarter, compared with falls of 0.7 percent and 3.2 percent in the December 2012 and September 2012 quarters, respectively.

The fall in imports was broadly based and influenced by a higher New Zealand dollar.

Excluding petroleum and petroleum products, import prices also fell 2.1 percent this quarter.

Mechanical machinery import prices fall

Mechanical machinery prices fell 4.0 percent in the March 2013 quarter. This fall was influenced by lower prices for computers.

In the year to the March 2013 quarter, mechanical machinery prices decreased 9.5 percent. This compares with an 8.2 percent decrease in the year to the March 2012 quarter.

Graph, Mechanical machinery import price index, annual change from the same quarter of the previous year, March 2008 to March 2013.

Petroleum and petroleum product import prices fall

Petroleum and petroleum product prices fell 2.5 percent in the March 2013 quarter. Lower prices for crude oil, motor spirit, and diesel influenced this fall.

In the year to the March 2013 quarter, petroleum and petroleum product prices decreased 4.4 percent. This compares with a 6.0 percent increase in the year to the March 2012 quarter. 
Graph, Petroleum and petroleum products import price index, annual change from the same quarter of the previous year, March 2008 to March 2013.  

Imported capital, intermediate, and consumption goods prices fall

In the March 2013 quarter:

  • capital goods prices fell 4.1 percent, reflecting lower prices for both transport and non-transport capital goods 
  • intermediate goods prices fell 1.8 percent, reflecting lower prices for processed industrial supplies 
  • consumption goods prices fell 0.9 percent, influenced by processed food and beverages.

 Graph, Import prices by broad economic category, quarterly, March 2009 to March 2013.

Prices for services exports fall less than for services imports

Prices for services exports (ie services provided to non-residents) fell 0.5 percent in the March 2013 quarter, following a 0.9 percent rise in the December 2012 quarter and a 0.7 percent fall in the September 2012 quarter.

The fall in services export prices was mainly influenced by transportation (down 6.6 percent, reflecting lower prices for air transportation). Partly offsetting this was a rise in travel prices (up 1.3 percent, influenced by higher personal travel prices).

Prices for services imports (ie services provided by non-residents) fell 3.7 percent in the March 2013 quarter, following revised falls of 1.0 percent and 1.1 percent in the December 2012 and September 2012 quarters, respectively.

The fall in services import prices was influenced by transportation (down 5.9 percent, reflecting lower sea transportation prices). Travel (down 4.3 percent) also had an impact. Prices for personal and business travel fell, reflecting a higher New Zealand dollar against the Australian dollar, British pound, United States dollar, and Japanese yen.

 Graph, Services price and terms of trade indexes, quarterly, March 2009 to March 2013.

Exchange rate information

The Reserve Bank of New Zealand's trade weighted index (TWI) shows the New Zealand dollar rose 3.1 percent in the March 2013 quarter. A rising New Zealand dollar has a downward influence on both export and import prices. The impact on the terms of trade depends on the relative mix of exports and imports for each currency.

New Zealand Customs Service (NZCS) exchange rates are used to value imports. The NZCS TWI of the New Zealand dollar rose 2.3 percent in the March 2013 quarter, following a 1.1 percent rise in the December 2012 quarter.

The following graphs and tables give more information about exchange rate movements over the March 2013 quarter.

 Graph, Merchandise trade indexes and average trade weighted index, quarterly, March 2009 to March 2013.  Graph, Services trade indexes and average trade weighted index, March 2009 to March 2013.
Exchange rates for March 2013 quarter
Reserve Bank of New Zealand
USA
($NZ:$US)
UK
($NZ:pound)
Australia
($NZ:$A)
Japan
($NZ:yen)
Euro
($NZ:euro)
Trade weighted index
Change from Dec 2012 quarter (%) 1.4     5.0 1.4 15.3 -0.4 3.1

 

Exchange rates for March 2013 quarter
New Zealand Customs Service
USA
($NZ:$US)
UK
($NZ:pound)
Australia
($NZ:$A)
Japan
($NZ:yen)
Euro
($NZ:euro)
Trade weighted index
Change from Dec 2012 quarter (%) 1.5 4.3 1.8 14.2 0.0 2.3

For more detailed data see the Excel tables in the 'Downloads' box.

 

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