New Zealand's sky-high terms of trade have been a key pillar of support for the stronger New Zealand economy over the last year but economists warn their influence is set to wane.
The terms of trade rose for the fifth consecutive quarter in the three months ending March to their highest level since September 1973.
The terms of trade are now just 1.7% shy of the record high set in the June 1973 quarter.
However, the record high was set to live another day as the terms of trade were expected to fall from June, ASB economist Nathan Penny said.
Export prices showed small rises across most categories.
Dairy led the way, increasing 2.3% in the quarter.
Forestry prices were up 1.6% and meat prices 2.1%.
The only material fall came in aluminium prices, which were down 2.9% in the quarter.
''This will be the last rise in export prices for the next few quarters, as dairy prices come off their highs. Dairy auction prices are down around 23% since February and trade data will begin to reflect these falls from the June quarter.''
The combination of the high New Zealand dollar and low global inflation continued to keep import prices low, Mr Penny said.
Fonterra last week announced an opening forecast farm-gate milk price for the 2014-15 season of $7 per kg of milk solids, matching the opening forecast provided 12 months ago at the start of the current season.
The global dairy auction prices will be released this morning.
The co-operative also reduced its 2013-14 price to $8.40kg ms, down 25c.
Higher production was expected to offset the fall in the payout.
Mr Penny said import prices fell 1% in the March quarter, with the trade-weighted average price for the dollar 1.8% higher in March.
Looking at volumes of exports, meat exports, up 6.6%, led a 1.6% rise in total exports for the quarter.
Forestry exports were also up in the quarter but dairy exports were down 4.3% in March, following the 23.7% rise in December.
Reflecting strong activity to start the year, and the strong dollar, imports were strong in March.
Volumes were now 12% higher and values 8% higher than in the previous corresponding quarter.
''The Reserve Bank will take some comfort in the lower import prices, and a strong dollar, but a June official cash rate hike is pretty much locked and loaded. From there, we expect the Reserve Bank to pause before hiking again in December.''
Westpac senior economist Anne Boniface remained optimistic the terms of trade would remain elevated relative to historical levels.
Growth in New Zealand's trade with China, and other emerging markets, had been instrumental in driving increased demand for New Zealand's key export commodities.
The trend was likely to be sustained, she said.
