New Zealand's terms of trade fell 1.9 percent on quarter in the first three months of 2018, Statistics New Zealand said on Friday.
That was slightly higher than forecasts for a drop of 2.0 percent following the 0.8 percent increase in the three months prior.
The Q1 reading marked the first decline after five quarters of rises as export prices tumbled 2.2 percent and import prices shed 0.3 percent.
"In the December 2017 quarter we saw increases across dairy product export prices. However, in the March 2018 quarter these increases were almost reversed," business prices manager Geoffrey Wong said. "Although dairy product prices fell in the March 2018 quarter, they have generally been rising over the last few years."
Overall, dairy product export prices fell 6.7 percent in the March 2018 quarter. Milk powder exports (down 8.1 percent) led this fall. All other dairy products also saw price falls, between 5 percent and 10 percent. Dairy product volumes fell 0.6 percent, while price changes drove a 9.8 percent fall in values. This is the largest quarterly fall in dairy product values since the September 2014 quarter.
Import prices fell 0.3 percent in the March 2018 quarter. This was mainly due to falls in mechanical machinery, and electrical machinery and apparatus prices (down 2.8 percent and 5.5 percent, respectively). The overall fall in import prices was partly offset by petroleum and petroleum product prices, which rose 7.9 percent.
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