Dairy exports drive 40-year high in New Zealand's terms of trade

New Zealand's terms of trade in goods in the December 2013 quarter were at a four-decade high for the second quarter running, thanks to the continuing boom in dairy exports, the government statistics agency said Monday.

Dairy export values rose 27 percent from the September quarter, while dairy volumes were up 23 percent, according to Statistics New Zealand.

Total export volumes rose 9.7 percent in the December quarter, while total export prices fell 0.5 percent.

Both movements were strongly influenced by dairy, which accounted for 39 percent of the value of goods exported in the December quarter.

"Export volumes are at their highest level since the series began in 1990, reflecting higher dairy volumes in the December quarter, after adjusting for seasonal effects," prices manager Chris Pike said in a statement.

"Dairy export prices fell slightly, reflecting a stronger New Zealand dollar."

Import prices fell 2.8 percent in the December 2013 quarter, due to the stronger New Zealand dollar.

The merchandise terms of trade rose 2.3 percent, the fourth consecutive rise, to its highest level since the December 1973 quarter and 3.5 percent below its all-time peak in the June 1973 quarter.

Terms of trade measure the amount of imports a country can buy with a set amount of exports, and an increase represents more imports for the same amount of exports.