A country’s terms of trade refer to the price of imports relative to exports.
Westpac senior economist Michael Gordon said the 0.7% rise was enough to push New Zealand’s terms of trade to a record high, unofficially topping a 1957 record.
"The result was slightly lower than we or the market expected, though with no significant implications for our forecasts," Mr Gordon said in a statement.
Export prices fell 1.9% during the quarter, spread fairly evenly across all the major categories.
"A higher New Zealand dollar over the quarter contributed to some of the price decline," Mr Gordon said.
Import prices fell 2.6%, mostly due to a larger-than-expected drop in petroleum prices of 12%, while prices for food and manufactured goods imports were also down slightly, he said.
Statistics New Zealand international statistics senior manager Daria Kwon said the rise in the terms of trade during the past year was driven by high meat and dairy prices, especially butter.
ASB rural economist Nathan Penny said export and import prices were both softer than expected during the quarter.
"Looking at export prices, both dairy and meat prices posted modest declines, in contrast to our expectations for modest rises," Mr Penny said in a statement.
"From here, we expect the terms of trade to drift lower, but to remain at historically high levels over coming quarters."
