New Zealand's terms of trade rose less than expected in the second quarter, with dairy and meat leading export price gains, outpacing an increase in import prices.
The terms of trade rose 1.5% in the second quarter from three months earlier, Statistics New Zealand said. Exports prices rose 2.4% and import prices rose 0.9%. The gain in the terms of trade undershot the forecast for a 3% gain in a Reuters survey while the first-quarter increase was revised down to 3.9% from a provisional estimate of 5.1%.
The trade-weighted index was little changed after the data was released at 75.19.
Statistics NZ said the first-quarter revision "mainly reflects a correction in the provisional price of forestry products" that will also "flow through to the expenditure measure of gross domestic product but is not significant enough to change the overall story."
Dairy export prices rose 3.9% in the second quarter, led by butter reaching an all-time high and cheese, while milk powder fell slightly, Statistics NZ said. Over the past two years, butter exports have been about 20% of the value of New Zealand's dairy exports. Dairy prices are 40% higher than the recent low of September 2016, but are still 18% lower than the March 2014 high, it said.
Meat export prices rose 9.2% in the quarter to come within 1 of their record high of September 2015.
The gain in import prices was led by machinery and electrical equipment, which was offset by a 4.2% fall in petroleum and petroleum product prices.
Export volumes rose 6.8% while import volumes gained 2.3%, resulting in the overall value of exports rising 9% to $12.9 billion in the second quarter while the value of imports rose 2.9% to $13.5 million.