1 Jun 2016

Terms of trade rise due to cheaper fuel prices

1:29 pm on 1 June 2016

The country's purchasing power with the rest of the world has rebounded, mainly because of cheaper fuel.

An aerial view of a container ship carrying exports (file)

Photo: 123RF

Official figures show the terms of trade, or the quantity of imports that can be bought with a given quantity of exports, jumped by 4.4 percent in the three months to March, snapping two successive quarterly falls.

Export prices remained unchanged, as falling meat prices offset small gains in dairy and a rise in forest products.

The big change was on the import side of the ledger, with prices declining by 4.3 percent.

Lower oil prices dominated the fall, with imported petrol prices slumping by a quarter.

Excluding oil, import prices were down by 1.4 percent.

Analysts are picking the rebound won't be sustained, as the dairy price recovery is weak and oil prices are expected to rise again.

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