New Zealand’s terms of trade fell in the September quarter as rising fuel prices outweighed gains that pushed export prices to a nine-year high. 

The terms of trade, which measures the purchasing power of New Zealand’s exports relative to imports, fell 0.3 percent in the three months through September from an increase of 0.4 percent in the June quarter, Statistics New Zealand said. The June reading was revised down. Economists polled by Bloomberg had expected it to be unchanged in the quarter. 

The terms of trade is an indicator of the state of the overall economy. The 0.3 percent fall means New Zealand can buy fewer imports for the same amount of exports.

Export values rose 6 percent to $14.3 billion in the third quarter, as a 2.3 percent increase in prices outpaced a 1.8 percent lift in volumes. Export prices were the highest they’ve been since December 2008. The value of imports rose 0.6 percent to $15.2 billion as prices increased 2.6  percent but volumes fell 0.9 percent. The values and volumes are seasonally adjusted. 

Import volumes fell from a spike in the June quarter when more diesel and petrol was brought into the country to make up for the Marsden Point oil refinery’s maintenance shutdown in the middle of the year, business prices manager Sarah Johnson said. 

Export dairy prices rose 6.5 percent, with milk powder up 8.5 percent, cheese up 5.7 percent and butter up 3.7 percent. Dairy volumes fell 2.9 percent while values rose 6.7 percent.

On the import side, petroleum and petroleum product prices rose 6.4 percent, following a 10 percent increase in the June 2018 quarter. Petroleum and petroleum product volumes rose 5.5 percent, and values rose 12 percent.

Petroleum and petroleum product prices in the September 2018 quarter were 53 percent higher than the same quarter in 2017, Stats NZ said. The crude oil price was up 55 percent over the same period.

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