WELLINGTON, March 1 (Xinhua) -- Rising milk powder prices and falling consumer electronics prices helped drive the largest rise in New Zealand's terms of trade for more than three years in the last quarter, the government statistics agency said Wednesday.
The terms of trade -- a measure of the purchasing power of a country's exports -- in the quarter ending December 2016 were up 5.7 percent, according to Statistics New Zealand.
It was the largest quarterly increase since the September 2013 quarter, when the terms of trade for goods rose 7.5 percent.
"The uptick of dairy export prices lifted New Zealand's terms of trade," business prices manager Sarah Williams said in a statement.
"However, dairy export prices are still about a third lower than they were three years ago."
A 5.7-percent rise in the December quarter meant New Zealand could buy 5.7 percent more imports for the same amount of exports.
While dairy export values were up 9.8 percent in the December quarter, dairy export volumes were down 8.1 percent.
Despite the fall in volumes, New Zealand earned more from the sale of dairy products abroad compared with the September 2016 quarter.
Import prices fell 0.8 percent, largely due to mobile phones and personal computers.
"Ongoing improvements in technology have meant that imports are better value for money," Williams said.
The latest consumers price index shows that telecommunication equipment fell 89 percent and computing equipment fell 68 percent over the last 10 years, she said.
Analysts said New Zealand's terms of trade would keep rising this year and possibly next year too following the rebound in dairy prices, which began late last year.
An economic note from the ASB Bank said dairy prices were still surging and the terms of trade for the current quarter might challenge the four-decade high set in the June 2014 quarter.
That came against a background of a sustained decline in import prices, which had fallen 18 percent since the end of 2012, it said.
"The weak import price picture owes to global over-capacity and the resulting low global inflation. While oil prices have picked up recently, low inflation in other sectors is persistent. Moreover, as global growth prospects remain modest, overcapacity is set to remain for a while yet," it said.
