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Export prices show largest drop in over 50 years

Statistics New Zealand

Wednesday 10 June 2009, 12:07PM

By Statistics New Zealand

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Export prices fell 8.2 percent in the March 2009 quarter, the largest quarterly fall since the December 1957quarter, Statistics New Zealand said today.

This was mainly driven by a fall in dairy product prices whichwere down 20.5 percent. The other main contributor to the fall in export prices was a 28.0 percent fall inpetroleum and petroleum products due to lower export prices for crude oil.Import prices fell 5.4 percent in the March 2009 quarter.

The most significant contributor to the drop inimport prices was petroleum and petroleum products (down 35.8 percent), largely driven by lower prices forcrude oil. When petroleum and petroleum products are excluded, the total import price index shows a 2.8percent rise in the March 2009 quarter, reflecting strong growth in machinery and transport equipmentimport prices.

Export and import prices fell in the March 2009 quarter, despite the depreciation of the New Zealand dollarby 7.1 percent as measured by the Trade Weighted Index.The terms of trade fell 3.0 percent in the March 2009 quarter as merchandise export prices fell more thanimport prices.

This is the largest fall in the terms of trade since the June 2002 quarter. The latest fall in themerchandise terms of trade means that in the March 2009 quarter, 3.0 percent less merchandise importscould be funded by a fixed quantity of merchandise exports than in the previous quarter.

Seasonally adjusted export volumes rose 2.0 percent in the March 2009 quarter – the first rise since theDecember 2007 quarter. Dairy products were the major contributor to the rise, led by increases in thevolumes of skimmed and buttermilk powder and butter. Seasonally adjusted import volumes fell 9.8 percent in the March 2009 quarter, and are at their lowest levelsince the December 2004 quarter.

All commodity groupings fell this quarter apart from processed petroleumand petroleum products.

Dallas Welch (Mrs)Acting Government Statistician10 June 2009

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See also the Hot Off The Press information releases Overseas Trade Indexes (Prices): March 2009 quarter(provisional) and Overseas Trade Indexes (Volumes): March 2009 quarter (provisional)