Export Volumes Rebound

Export Volumes Rebound

Seasonally adjusted merchandise export volumes have rebounded from the 9.3 percent fall in the September 2004 quarter. Driven by dairy products, export volumes increased by 8.5 percent in the December 2004 quarter, Statistics New Zealand said today. Also contributing to the rise in export volumes this quarter were kiwifruit and wine exports.

By the end of the dairy season in autumn 2004, tight management of inventories had reduced levels compared with the same period in 2003. This meant that lower volumes of dairy products were available for export in the September 2004 quarter. Despite increasing 34.1 percent during the quarter, dairy volumes have not returned to the levels experienced during the latter part of the 2003/04 dairy season.

Merchandise export prices fell 1.2 percent in the December 2004 quarter, following a similar fall in the previous quarter. The appreciation of the New Zealand dollar against our main trading partners' currencies has had a significant negative impact on export prices.

A 5.1 percent fall in the index for non-fuel crude materials made the largest contribution to the overall decrease in merchandise export prices in the December 2004 quarter. Lower prices for forestry products (especially wood pulp) were the main drivers of this fall. All the major export indexes recorded price decreases in the current quarter, except the wool index (up 0.3 percent).

The index for all pastoral and dairy products recorded a 0.9 percent fall in the December 2004 quarter. Falling prices for beef and veal, and milk powder were the major contributors to this fall.

The seasonally adjusted volume of merchandise imports rose 2.0 percent in the December 2004 quarter, recovering from the fall in the September quarter. Crude oil, partly refined crude, and diesel contributed most to the increase in total imports. These commodities can be affected by large irregular imports.

Import prices fell 1.9 percent in the latest quarter, following a 0.9 percent fall in the September 2004 quarter, largely reflecting the strong New Zealand dollar. The falls in prices of electrical machinery and apparatus (down 7.9 percent), mechanical machinery (down 5.2 percent), transport equipment (down 1.1 percent), and food and beverages (down 3.0 percent) were the main contributors to the fall in merchandise import prices. Partly offsetting the falls were higher prices for plastics and plastic articles (up 5.3 percent).

The merchandise terms of trade rose 0.8 percent in the December 2004 quarter, following a 0.3 percent fall in the September 2004 quarter. The rise in the index is due to import prices falling more than export prices in the latest quarter, and means that more imports can be funded from a fixed quantity of exports.

Brian Pink

Government Statistician

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