NZ Terms of Trade Miss Expectations in Q3

New Zealand’s merchandise terms of trade fell 2.1% quarter-on-quarter in the three months to September 2025, reversing the prior quarter’s improvement and way below expectations of a 0.3% increase. The deterioration reflected weaker relative export prices, which fell 1.6%, against a 0.5% increase in import prices. In value terms, export values for goods rose 3.0% to $19.1 billion amid higher export volumes, while import values edged up 0.1% to $19.4 billion as import volumes fell 1.2%. The weaker terms of trade indicate reduced purchasing power for New Zealand exporters despite rising export volumes.

New Zealand’s merchandise terms of trade rose 4.1% quarter-on-quarter in the three months to June 2025, accelerating from a 1.9% increase in the first quarter and beating market forecasts of 1.9%. The improvement reflected stronger relative export prices, which edged up 0.2%, against a sharper 3.7% fall in import prices, partly driven by lower fuel and consumer goods costs. In value terms, exports declined 4.8% to $18.6 billion amid softer dairy and meat shipments, while imports slipped 1.2% to $19.4 billion as demand for capital goods eased. The stronger terms of trade indicate improved purchasing power for New Zealand exporters despite weaker trade volumes.

The merchandise (goods) terms of trade in New Zealand increased 1.9% quarter-on-quarter in the March 2025 quarter, easing from a revised 3.1% increase in Q4 2024 and missing market forecasts for a similar 3.1% rise. Export prices climbed 7.1%, driven by a 10% jump in dairy prices — the country’s top export — including a 13% surge in milk powder prices. Meanwhile, import prices rose 5.1%, largely due to a 21.3% spike in the cost of non-fuel crude materials.