10 Jun 2009

Export prices suffer biggest fall in 50 years

6:11 pm on 10 June 2009

Export prices have taken their biggest quarterly drop in more than 50 years, chiefly as a result of a fall in dairy prices.

Statistics New Zealand says export prices fell by 8.2% in the March quarter, the largest fall since December 1957. It says dairy product prices fell by 20.5%.

Import prices also dropped in the March quarter, down by 5.4%.

Acting government statistician Dallas Welch says the prices fell despite the depreciation in the New Zealand dollar.

UBS economist Robin Clements says the figures reflect a huge slump in commodity prices on world markets over the past year.

Mr Clements predicts exporters' returns will fall by as much again over the next six months as buyers renegotiate contracts to take advantage of these lower prices.

However, he says the slowdown is also showing up in lower prices for imports such as oil, which are partly offsetting weakening exports.

BNZ market economist Mark Walton says the drop was expected because export prices, particularly for dairy, have been in decline for some time.