Total export values for the quarter to June were up more than 7%, but only because the sheer volume of exports was able to overcome decreasing commodity prices.
Export volumes were at their highest levels in 26 years. Dairy products made the largest contribution, up 13%, seasonally adjusted.
Statistics New Zealand international statistics senior manager Jason Attewell said dairy’s volume was at its highest level since the September 2012 quarter, when 832,000 tonnes of dairy products was exported. He noted meat, forestry and fruit export volumes also rose for the quarter to June.
However, while the tonnage of goods New Zealand exported for the quarter was at record levels, price falls for key commodities meant the amount earned from exports was little changed, Mr Attewell said in a statement.Seasonally adjusted, export values rose 7.6% to $12 billion for the quarter, while import values rose 1.2% to $12.3 billion.
The country’s terms of trade, measuring the purchasing power of New Zealand’s exports overseas, declined by 2.1%.
ASB senior rural economist Nathan Penny said the terms of trade decline was in line with expectations.
"From here, we expect the terms of trade to lift over the next year as dairy export prices recover.
"However, the export volume surge over the quarter is likely to prove temporary," he said.
While the terms of trade fell, surging export volumes countered the fall, he said.
Both dairy, which was up 12.5%, and meat volumes, up 8.6%, surged over the quarter.
However, Mr Attewell expected some ‘‘payback’’ over coming quarters, particularly as New Zealand dairy production fell this season.
"We expect the terms of trade to have now passed their cyclical low and will lift over the next year as dairy prices recover," Mr Attewell said.
Mr Penny expected the Reserve Bank would cut the official cash rate in November, with "growing risk" of a further cut next year.
Westpac’s Sarah Drought said the 2% decline in export prices was led by a 7.1% fall in dairy prices, which reflected declines in dairy auction prices earlier in the year.
"The lag between pricing and shipment of dairy products is around three months on average. Outside of dairy, the movements were relatively muted, with meat and forestry prices rising 0.9%," she said.
