MNI 5 Things: New Zealand Terms of Trade Eases Frm Record High

--Terms of Trade -1.9%; Export Prices -2.2%; Import Prices -0.3%

By Sophia Rodrigues

     SYDNEY (MNI) - Following are the five key observations we made from

overseas trade indexes data for the first quarter published by Statistics New

Zealand on Friday:

     --New Zealand's terms of trade fell 1.9% in Q1, from a record high touched

in Q4. The fall was mainly due to decline in export prices led by dairy.

     --Total export prices fell 2.2% as dairy prices fell 6.7% due to 0.6% drop

in volumes and a 9.8% fall in values. Meat and wool were other key contributors

to the decline while the offset came from a 5.4% rise in fruit and vegetable

prices.

     --Total import prices fell 0.3% due mainly to a 5.5% fall in electrical

machinery and apparatus, and a 2.8% fall in mechanical machinery. This was

partly offset by a 10% rise in crude oil prices. Capital goods volumes fell 23%

due mostly to imports of transport equipment returning to previous levels after

large aircraft were imported the quarter before.

     --This was the first fall in terms of trade in six quarters, though the

level remains elevated and in line with the Reserve Bank of New Zealand's

forecast. High terms of trade has been one of the key drivers to New Zealand

growth.

     --Export prices for services rose 0.8% while import prices fell 5.2%,

marking a 6.4% rise in services terms of trade.

--MNI Sydney Bureau; tel: +61 2-9716-5467; email: sophia.rodrigues@marketnews.com

[TOPICS: MANDS$,M$A$$$,M$N$$$,MT$$$$]