Dairy prices are on the decline after a run of record highs.
Export prices fell 2.2% and import prices fell 0.3% for the March 2018 quarter, Statistics New Zealand says.
The 1.9% fall in the terms of trade follows five quarters of rises with an all-time high in the December 2017 quarter.
A fall in the terms of trade means New Zealand can buy fewer imports for the same amount of exports.
“In the December 2017 quarter we saw increases across dairy product export prices. However, in the March 2018 quarter these increases were almost reversed,” Stats NZ business prices manager Geoffrey Wong says.
“Although dairy product prices fell in the March 2018 quarter, they have generally been rising over the last few years,” he says.
Overall, dairy product export prices fell 6.7% in the March 2018 quarter.
Milk powder exports, down 8.1%, led the fall with all other dairy products falling between 5% and 10%.
Dairy product volumes fell 0.6%, while price changes drove a 9.8% fall in values.
This is the largest quarterly fall in dairy product values since the September 2014 quarter.
Import prices fell 0.3% in the March 2018 quarter.
This was mainly due to falls in mechanical machinery, and electrical machinery and apparatus prices (down 2.8% and 5.5%, respectively).
The overall fall in import prices was partly offset by petroleum and petroleum product prices which rose 7.9%.
