Rising export prices lift merchandise terms of trade

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Merchandise terms of trade for the June 2021 quarter rose 3.3 percent on the previous quarter, as rising global commodity prices contributed to a strong quarterly increase in export prices, Stats NZ said today.

Export prices for goods rose 8.3 percent on the previous quarter, while import prices rose 4.8 percent. 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 percent annually.

Terms of trade measures New Zealand鈥檚 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.