Our exposure to the global commodities trade is particularly evident now, with the commodity price volatility currently. The overall impact on New Zealand depends on the balance between imported (oil) and exported (agricultural) commodity prices.
Usually commodity price rises and falls see the New Zealand terms of trade rise and fall more or less in concert, because of the greater proportion of commodities on the export side than the import side. This is the pattern we are seeing currently, with the terms of trade having fallen about 10 percent so far since early 2008.