NZ’s terms of trade lifts 0.6%

AUCKLAND: New Zealand’s merchandise trade rose in the June quarter, bolstered by stronger dairy and record meat prices, but fell short of expectations.

The terms of trade, which measures the purchasing power of New Zealand’s exports relative to imports, rose 0.6% in the June quarter after falling a revised 2% in the March quarter, Statistics New Zealand said.

Economists had expected a 1% rise, according to the median Bloomberg poll, although forecasts ranged from a 0.5% drop to a 1.7% lift.

Terms of trade measures the purchasing power of New Zealand’s exports abroad and is an indicator of the state of the overall economy. The 0.6% lift means New Zealand can buy more imports for the same amount of exports.

Export values rose 3% to $13.4 billion in the second quarter, with a 1.1% lift in volumes and a 2.4% lift in prices. The value of imports rose 1.7% to $15.1 billion as prices increased 1.7% and volumes advanced 0.9%. The figures are seasonally adjusted.

On the export side, dairy prices rose 3.2%, with milk powder up 7.1%, cheese increasing 1.2%, and butter up 1%. Dairy volumes rose 5.2%, while values increased 7.6%.

Meat export prices rose 3.6%, lamb was up 5.4% and beef was up 1.7%. Both total meat and lamb are at record prices, Stats NZ said.

Wool export prices rose

4.8% as volumes fell 2.1% and values rose 1.2%.

On the import side, petroleum and petroleum product prices rose 10%, following a 7.9% increase in the March 2018 quarter. Crude oil prices rose 14%, volumes fell 35%, and values slipped 26%. Crude oil volumes and values are not seasonally adjusted.

‘‘The Marsden Point refinery maintenance shutdown during the June quarter led to the fall in volume of crude oil imported,’’ business prices manager Sarah Johnson said.

Stats NZ also noted that

New Zealand’s dollar fell 1.5% in the June quarter on a tradeweighted index basis and ‘‘a falling New Zealand dollar has an upward effect on export and import prices and their New Zealanddollar values,’’ she said.