Dairy prices drive New Zealand terms of trade to four-decade high

New Zealand's terms of trade almost equaled their all-time high in the quarter ending March, rising to their highest level in more than 40 years, the government statistics agency announced Tuesday.

Rising export prices and falling import prices drove up the merchandise terms of tradethe measure of the international purchasing power of a country's exportsby 1.8 percent in the March quarter, according to Statistics New Zealand.

"Five consecutive quarterly rises have lifted the terms of trade to its highest level since the September 1973 quarter," prices manager Chris Pike said in a statement.

The terms of trade was now 1.7 percent below its all-time high in the June 1973 quarter.

Prices of exported goods rose 0.8 percent in the March quarter and export volumes rose 1.6 percent.

Dairy prices, which were up 2.3 percent, were the top contributor to total export prices, while dairy volumes fell 4.3 percent, following a 24-percent rise in the previous quarter.

Prices for imported goods fell 1 percent in the March quarter, following a 2.7 percent fall in the previous quarter, led by petroleum and petroleum products, which were down 3.5 percent.

Import volumes rose 2.3 percent, following a flat December 2013 quarter.