Statistics New Zealand reported Wednesday that the decline in the terms of trade was the biggest decline since the June 2002 quarter.
The agency said export prices for Q1 were down 8.2 percent on quarter, the largest quarterly drop since the December 1957 quarter. Plunging dairy product prices, which fell by 20.5 percent, were the main contributor to the export decline, with petroleum and related product prices down 28.0 percent.
Import prices were down 5.4 percent on quarter. Statistics NZ said the biggest contributor to the decline was petroleum and related products, which fell 35.8 percent. Excluding petroleum and related products, import prices rose 2.8 percent in Q1, with strong growth seen in machinery and transport equipment import prices.
Stats NZ also noted that export and import prices fell in the March 2009 quarter despite a 7.1 percent depreciation of the New Zealand dollar, as measured by the Trade Weighted Index.
In terms of volume, exports were up a seasonally adjusted 2.0 percent on quarter, the first rise since Q4 of 2007, while import volumes were down a seasonally adjusted 9.8 percent.
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