WELLINGTON (Reuters) - New Zealand's terms of trade fell 3.0 percent in the fourth quarter, data from Statistics New Zealand showed on Friday, dragged down by lower prices for the country's key export, dairy.
Overall, export prices fell 1.7 percent, while import prices increased 1.4 percent.
Economists had expected the index to show a 1.0 percent fall, with export prices down 2.0 percent and import prices down 1.0 percent, according to a Reuters poll.
Terms of trade, which measures the purchasing power of a country's exports abroad, were weighed down by falling prices for the country's top goods export, dairy, which fell 5.7 percent.
Global dairy values have since rallied at fortnightly auctions thanks to strong demand from Asia. But prices had sunk for much of 2018 on the back of strong supply.
"While the Global Dairy Trade price index has been increasing recently, there's often a lag between an auction price and when that order is filled," Sarah Johnson, business prices delivery manager for Statistics New Zealand, said in a statement. "The export price fall in the December quarter likely reflects falling global dairy auction prices between June and November 2018."
The New Zealand dollar was largely unchanged after the data, trading at around $0.6808, down 0.5 percent on the previous day.
(Reporting by Charlotte Greenfield; Editing by Dan Grebler)
