Higher export prices for dairy, kiwifruit, and logs in the June quarter helped push overall export prices to their highest level since reporting began.

Stats NZ is reporting the export price index rose 2.4 per cent in the June 2020 quarter compared with a 0.2 per cent fall in the March 2020 quarter.

Import prices fell slightly, down 0.1 percent, boosting the merchandise terms of trade to a new high of 2.5 per cent.

'Most dairy products increased in price over the quarter with global dairy trade auction prices recovering from a slump earlier in the year,” says Stats NZ business prices manager Bryan Downes.

Dairy export prices rose 4.1 per cent in the June quarter.

'Export prices have been supported by favourable exchange rates after the New Zealand dollar fell as the COVID-19 pandemic spread around the world.”

Forestry products export prices rose 11 per cent in the June 2020 quarter, following a 3.3 per cent fall last quarter. Forestry products export volumes fell 20 per cent in the quarter, after forest logging stopped in April as logging was considered a non-essential business during the COVID-19 lockdown.

'The domestic supply of logs for export was affected by efforts to stop the spread of COVID-19 in New Zealand while global supply constraints saw a spike in export prices over the same period.”

Imports prices fall led by crude oil price drop

Prices for imports fell 0.1 per cent in the June 2020 quarter, reflecting a significant fall in imported fuel prices, partly offset by higher prices for cellphones, televisions, and laptops as well as animal fodder such as palm kernel.

Petroleum products import prices fell 35 per cent in the quarter, the largest drop since the March 2009 quarter during the global financial crisis when prices fell 36 per cent. Petroleum products volumes fell 42 per cent in the June 2020 quarter.

'Crude oil stocks built up and imports fell after the border was closed to international visitors in March and air and road travel within New Zealand slowed due to COVID-19 restrictions,” says Bryan.

Higher prices for imported food products and technological items partly offset the fall in petroleum products.

'Drought conditions during the first half of the year led to increased demand for animal feed such as palm kernel, with higher prices and a sharp increase in volumes.”

Higher prices for cellphones, televisions, and laptops influenced a 4.7 per cent rise to electrical machinery and apparatus.

'Demand for such technology increased as more employees and students worked from home during the COVID-19 lockdown.”

Transportation services costs rise sharply

Overseas trade index prices for services exports rose 0.7 per cent in the June 2020 quarter, with a rise of 16 per cent for transportation services – its largest quarterly increase on record.

'With fewer international passenger flights running after the border restrictions were imposed earlier in 2020, it became more expensive to deliver air freight to and from New Zealand,” says Bryan.

The rise was partly offset by a fall in prices for travel services exports of 3.1 per cent – its largest quarterly decrease on record.

The services terms of trade fell 3.2 per cent with overseas trade index services imports prices up 4 per cent in the quarter.