Rising dairy prices are expected to push the terms of trade to a 39-year high later this year.
Latest figures show the terms of trade in the second quarter of the year rose 4.9% compared with the first three months of the year.
An increase means New Zealand can buy more imports for the same amount of exports.
The figure was slighter higher than analysts' expectations and was mainly due to dairy prices, which surged 14%.
Import prices fell 1.5%, reflecting lower crude oil and capital goods prices.
Export volumes fell nearly 7%, reflecting the fall in the amount of dairy products exported due to the effects of the drought, while import volumes rose nearly 4%.
ANZ senior economist Mark Smith said it was the second quarterly rise in trade terms.
"We're certainly moving in the right direction and, given what we've seen already in commodity export prices, we're very much on track to hit a 1974 high in the terms of trade later in this year," Mr Smith said.
It would be predominantly dairy related so in some respects was very good for the New Zealand economy - but it would be even better if it reflected a more broad-based increase in export commodity prices, he said.
Some sectors were still "but, encouragingly, we are seeing a more critical mass to commodity prices firming".
China's expanding middle class was likely to underpin increased demand for meat and dairy exports, while stronger domestic demand was likely to drive a continued recovery in imports, Mr Smith said.
