Higher Meat Export Prices Boost Terms Of Trade

Export prices increased more than import prices in the December 2024 quarter, which led to a 3.1 percent rise in the terms of trade, according to figures released by Stats NZ today.

The terms of trade represent the ratio of export prices to import prices. They can be interpreted as a measure of New Zealand's purchasing power on the international stage and as an indicator of the relative strength of the New Zealand economy.

The total export price index rose 3.2 percent and the import price index rose 0.1 percent in the December 2024 quarter, compared with the September 2024 quarter.

Export prices for meat products, which are New Zealand's second largest export commodity by value, rose 6.8 percent in the December quarter. Lamb prices rose 7.0 percent, while beef and veal prices rose 6.1 percent.

"Lamb and beef export prices have experienced growth since March 2024," international account spokesperson Viki Ward said.

"They are 15 and 17 percent higher now than March 2024 levels."

Prices for dairy products (New Zealand's top export commodity) rose 3.5 percent, with milk powder up 3.5 percent and butter up 3.0 percent.

Overall, import prices rose 0.1 percent in the December 2024 quarter, with falling prices for petroleum and petroleum products (down 9.5 percent), offset by rising prices in other categories.