New Zealand's terms of trade surged 7.5 percent in the third quarter compared to the previous three months, Statistics New Zealand said on Monday.
The headline figure was sharply higher than forecasts for an increase of 2.9 percent following the 4.9 percent jump in the second quarter.
The price of exported goods climbed 8.9 percent on quarter, while seasonally adjusted export prices dipped 2.1 percent. Both were strongly affected by prices of dairy products, the bureau noted.
"Dairy export prices helped lift the terms of trade to their highest level since 1973," prices manager Chris Pike said in a release accompanying the data. "Both the terms of trade and export prices have been on the rise since the start of this year, reflecting higher dairy prices."
In the third quarter, dairy export prices rose 24 percent to their highest level since 2008, and are now 46 percent higher than a year ago.
Seasonally adjusted dairy export volumes fell 2.7 percent, which is the fourth consecutive quarterly fall. Seasonally adjusted dairy product values surged 20 percent, following a 4.7 percent fall in Q2.
Prices for imported goods rose 1.2 percent in the third quarter, after four consecutive falls. Petroleum and petroleum products (up 3.1 percent) contributed the most to the overall increase in import prices due to higher prices for crude oil, the bureau said.
Terms of trade measure of the purchasing power of New Zealand's exports abroad. An increase means New Zealand can buy more imports for the same amount of exports.
The price and volume indexes for exports and imports of goods are compiled mainly from overseas merchandise trade data.
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