Export prices fell 8.2% in the March quarter, the largest quarterly fall since 1957, Statistics New Zealand (SNZ) said today.
The drop was mainly driven by a fall in dairy product prices which were down 20.5%, with another main factor being a 28% fall in petroleum and petroleum products due to lower export prices for crude oil.
Import prices fell 5.4% in the March 2009 quarter, with petroleum and petroleum products down 35.8%.
When petroleum and petroleum products were excluded, the total import price index rose 2.8% in the March quarter, reflecting strong growth in machinery and transport equipment import prices, SNZ said.
The terms of trade fell 3% in the quarter as export prices fell more than import prices. The decline is the largest fall in the terms of trade since the June 2002 quarter.
It means that 3% less imports could be funded by a fixed quantity of exports than in the previous quarter.
Seasonally adjusted export volumes rose 2% in the March quarter -- the first rise since the December 2007 quarter, SNZ said.
Dairy products were the major contributor to the rise, led by increases in volumes of skimmed and buttermilk powder and butter.
Seasonally adjusted import volumes fell 9.8% in the March quarter, and are at their lowest level since the December 2004 quarter.
The falls in export and import prices were much larger than expected, with the median forecast of economists in a Reuters poll having been for a 4% fall in export prices and a 1% fall in import prices.
