NZ registers largest trade drop in a decade as dairy export prices sour
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E-mail Xinhua, December 2, 2020
WELLINGTON, Dec. 2 (Xinhua) -- Lower export prices for New Zealand dairy, meat, and logs in the September 2020 quarter led to the biggest drop in terms of trade since June 2009, the statistics department Stats NZ said on Wednesday.
Export prices fell in the September 2020 quarter, down 8.3 percent from its highest ever level in June 2020. This is the third largest fall in export prices since the series began. Import prices fell 3.7 percent, resulting in a terms of trade fall of 4.7 percent, according to Stats NZ.
The terms of trade measures the purchasing power of New Zealand's exports abroad and is an indicator of the state of the overall economy. A fall in the terms of trade means the country can buy fewer imports for the same amount of exports.
"Export prices for dairy products fell 12 percent overall in the quarter," business prices manager Bryan Downes said in a statement.
Dairy values have been the most affected with a 16-percent drop in the quarter compared with a 3.3-percent fall in dairy volumes exported," Downes said.
Also contributing to the fall in export prices were lower forestry products prices, which fell 11 percent in the September 2020 quarter, following an 11-percent rise last quarter. Forestry products export volumes rose 27 percent in the quarter, he said.
Meat prices also fell 8.8 percent in the quarter with beef prices down 7.4 percent and lamb prices down 10 percent, statistics showed.
Import prices fell 3.7 percent in the September 2020 quarter with a fall in electrical machinery and apparatus prices influenced by lower prices for laptops and television imports, according to Stats NZ.
The Reserve Bank of New Zealand's trade weighted index (TWI) rose 3.4 percent in the September 2020 quarter, while the New Zealand dollar to U.S. dollar exchange rate rose 7.2 percent over the same period. TWI is a measure of the value of the New Zealand dollar (NZD) relative to the currencies of New Zealand's major trading partners.
"The New Zealand dollar rebounded from a fall last quarter which has had a downwards influence on both export and import prices," Downes said. Enditem
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