Merchandise terms of trade for the June 2021 quarter rose 3.3 per cent on the previous quarter, as rising global commodity prices contributed to a strong quarterly increase in export prices, Stats NZ says this week.
Export prices for goods rose 8.3 per cent on the previous quarter, while import prices rose 4.8 per cent.
Both export and import goods prices had previously fallen each quarter since the first half of 2020, including large falls in the September 2020 quarter.
Compared with the previous June quarter, merchandise terms of trade remained steady as both export and import prices fell 1.8 per cent annually.
Terms of trade measures New Zealand's purchasing power for import goods, based on the prices it receives for exports.
An increase in terms of trade means that New Zealand can buy more import goods for the same quantity of exports.
Dairy and forestry products lead rise of export prices
Dairy and forestry products were the major contributors to rising goods export prices.
Export prices for dairy products increased 15.3 per cent on the previous quarter, while prices for forestry products increased 12.7 per cent.
'Export prices for dairy typically lag behind the more widely reported global dairy trade (GDT) prices,” says business prices delivery manager Bryan Downes.
'While GDT only accounts for a portion of New Zealand dairy exports, it is likely that we're now seeing the high GDT prices reported earlier in the year push up our dairy export prices in the June quarter.”
'We've also seen sustained demand for New Zealand logs, especially from China, which has continued to push up export prices for forestry products,” says Downes.
Other primary products also increased in price in the June 2021 quarter, with export prices for meat up 6.8 per cent and prices for aluminium up 14.5 per cent.
Crude oil and petrol drive rise of import prices
Rising prices for crude oil and petrol were the major contributors to the rise in goods import prices.
Import prices for primary fuels and lubricants rose 26.7 per cent in the June 2021 quarter, while prices for processed fuels and lubricants rose 22.2 per cent.
'Oil prices have continued to rise internationally due to restricted supply from OPEC nations and increasing global demand as countries emerge from lockdowns,” says Downes.
'However despite strong growth, fuel prices remain lower than they were immediately prior to the Covid-19 pandemic.”
In the same period, consumer prices for petrol returned to pre-Covid levels (see Consumers price index: June 2021 quarter) following a 6.1 per cent quarterly increase.
'Rising consumer petrol prices likely reflect both the rising cost of crude oil, and other rising costs including sustained increases in the cost of transportation services,” says Downes.
'Transportation prices – particularly for sea transportation – continued to rise this quarter due to ongoing container shortages, port congestion, and increased consumer demand.”
In the June 2021 quarter, import prices for transportation services rose 19.9 per cent on the previous quarter and 112.4 per cent on the previous year.
0 comments
Leave a Comment
You must be logged in to make a comment.