New Zealand’s prices for oil and logs rose sharply in the March 2021 quarter, while import and export prices continued to fall overall, Stats NZ said.
Overseas trade index (OTI) import and export prices both fell 0.8% in the quarter to March 2021. Prices remained well below those recorded a year ago, with annual falls of 6.3% for imports and 7.2% for exports.
Terms of trade rose 0.1% in the March 2021 quarter but remained down 0.9% annually. The terms of trade measures the purchasing power of New Zealand’s exports abroad and is an indicator of the overall state of the economy. A rise in the terms of trade means New Zealand can buy more imports for the same amount of exports.
“Although commentators are predicting rising inflation as the global economy recovers from the COVID-19 pandemic, we’re not yet seeing that reflected in our headline OTI figures,” business prices delivery manager Bryan Downes said.
“Instead, we’ve seen modest declines across most goods categories, offset by strong growth in prices for particular commodities, including oil and logs.”
Export prices for forestry products rose 7% in the March 2021 quarter. Within that category, prices for wood exports rose 9.1% over the quarter to reach the highest prices on record, slightly exceeding the previous peak in the June 2020 quarter.
“Strong international demand for logs, especially from China, continues to drive up prices for New Zealand wood,” Mr Downes said.
Services import prices rose 12% while export prices fell 0.4% in the March 2021 quarter, leading to an 11.1% fall in the services terms of trade.
The increase in import prices was carried by a 52.2% increase for transportation services – setting new records for the largest quarterly increase and highest levels since the series began.
“The dramatic rise in import prices for transportation services reflects increased costs for sea transport,” Mr Downes said. “Container shortages, port congestion, and increasing demand for consumer goods has led to increased shipping costs around the world.”
