Export returns on $NZ change

Press, 30 August 1989, Page 39

Export returns on $NZ change

PA Wellington Commodity prices in world markets appear to be softening and some of last year’s gains in rising export values may not continue over the next few months, an ANZ Banking Group economist says. Mr David Ward said his commodity price index for July rose by just 0.2 per cent, following a 0.7 per cent depreciation in the value of the New Zealand dollar during the month. “Returns received by exporters continue to be driven by changes in the value of the New Zealand dollar, given stable world market prices,” Mr Ward said. Increased dollar returns for lamb, butter, and cheese were offset by decreased returns for casein and timber. But Mr Ward noted the Kiwi dollar had strengthened by 2 per cent since the end of July. The exchange rate adjusted index fell 0.5 per cent, the

second consecutive drop. “New Zealand will be struggling to match the trade performance of last year, especially given lower export volumes resulting from rural restructuring and the effects of the drought, and the increasing import trend apparent in recent import statistics,” he said. Meanwhile, Opposition agriculture spokesman, Mr John Falloon, said many exports had shown dramatic cuts in real earnings over the last five years, despite the apparent boom in prices. “Our main export earners are not returning as well as first glances would indicate,” he said. Figures adjusted for inflation showed butter exports were up 18 per cent in volume since 1989, but down 38 per cent in real value, he said. Meat exports were down 13 per cent in volume and 30 per cent in real value. Fruit exports had increased 125 per cent in volume, but yielded only a 35 per cent increase in real value.