New Zealand’s export prices declined by 1.60% quarter-on-quarter in the December 2025 release, according to the Sigmanomics database. This result came in well below the 0.40% market estimate and reverses the modest 0.20% increase recorded in September 2025. The latest figure marks a notable shift from the strong 7.10% jump in June 2025 and the 3.20% rise in March 2025, highlighting increased volatility in export pricing.

Drivers this month

• Commodity price softness, especially in dairy and meat sectors, weighed heavily.
• Global demand slowdown amid tightening financial conditions in key trading partners.
• Exchange rate appreciation of the NZD reduced export price competitiveness.

Policy pulse

The decline in export prices adds complexity to the Reserve Bank of New Zealand’s (RBNZ) inflation targeting. While domestic inflation pressures remain, weaker export prices suggest external demand is cooling, potentially easing imported inflation. The RBNZ’s policy stance may remain cautious, balancing inflation control with growth support.

Market lens

Immediate reaction: The NZD/USD currency pair strengthened by 0.30% within the first hour post-release, reflecting the market’s interpretation of weaker export prices as a sign of slowing external inflation pressures. The 2-year government bond yield dipped 5 basis points, signaling a mild risk-off shift in fixed income markets.

Export prices are a critical component of New Zealand’s trade balance and overall economic health. The 1.60% QoQ decline contrasts with the 0.30% rise recorded in December 2024 and the 5.20% surge in September 2024, underscoring the volatility in commodity-driven export sectors. This volatility is mirrored in core macroeconomic indicators such as GDP growth, inflation, and the terms of trade.

Monetary Policy & Financial Conditions

The RBNZ has maintained a hawkish stance through 2025, with the official cash rate (OCR) hovering near 5.50%. The drop in export prices may reduce imported inflation risks, potentially tempering the need for further rate hikes. However, domestic inflation remains sticky, with CPI running above the 2% target band. Financial conditions have tightened globally, with higher borrowing costs and cautious lending impacting export financing.

Fiscal Policy & Government Budget

New Zealand’s fiscal policy remains moderately expansionary, with the government running a slight deficit to support infrastructure and social spending. The weaker export price environment may pressure tax revenues linked to trade sectors, complicating budget forecasts. The government’s commitment to fiscal prudence will be tested if export earnings decline further.

External Shocks & Geopolitical Risks

Global trade tensions and supply chain disruptions continue to affect New Zealand’s export prices. The slowdown in China’s demand and ongoing geopolitical uncertainties in the Asia-Pacific region have contributed to price softness. Additionally, climate-related events have disrupted agricultural output, further pressuring export price stability.

Drivers this month

• Dairy export prices fell 2.30% QoQ, reversing a 4.50% gain in September 2025.
• Meat export prices declined 1.10%, impacted by weaker global demand.
• Forestry and wood product prices remained flat, providing some stability.

Policy pulse

The RBNZ’s inflation outlook must now incorporate weaker external price pressures, which could delay further tightening. However, domestic cost-push inflation remains a concern, keeping the policy stance balanced.

Market lens

Immediate reaction: NZD/USD rose 0.30%, while 2-year government bond yields fell 5 basis points, reflecting market expectations of a more dovish RBNZ stance amid weaker export prices.

Looking ahead, New Zealand’s export prices face a range of scenarios shaped by global demand, commodity markets, and currency movements.

Bullish scenario (25% probability)

• Global demand recovers strongly, especially from China and the US.
• Commodity prices rebound due to supply constraints and climate events.
• NZD stabilizes or weakens, boosting export competitiveness.
• Export prices rise 2–3% QoQ over the next two quarters.

Base scenario (50% probability)

• Global growth remains moderate with ongoing geopolitical risks.
• Commodity prices fluctuate but remain near current levels.
• NZD remains elevated, limiting export price gains.
• Export prices hover near zero growth or slight declines.

Bearish scenario (25% probability)

• Global recession risks materialize, reducing demand sharply.
• Commodity prices fall due to oversupply and weak demand.
• NZD strengthens further, eroding export margins.
• Export prices decline by 3–5% QoQ in coming quarters.

Structural & Long-Run Trends

New Zealand’s export prices remain highly sensitive to commodity cycles and exchange rates. Structural shifts toward value-added exports and diversification may mitigate volatility over time. However, climate change impacts and geopolitical uncertainties will continue to pose risks to export price stability.

The December 2025 export prices print of -1.60% QoQ signals a pause in the recent upward momentum and highlights the challenges facing New Zealand’s export sector. While domestic inflation pressures persist, weaker external price signals may ease some inflationary risks. Policymakers must navigate a complex environment of mixed signals, external shocks, and structural shifts. Financial markets have responded with cautious optimism, but volatility is likely to remain elevated. Exporters and investors should prepare for a range of outcomes, balancing optimism about global recovery with caution about downside risks.

Key Markets Likely to React to Export Prices QoQ

Export prices directly influence New Zealand’s trade balance, currency valuation, and equity markets. The following symbols historically track export price movements and are likely to react to this release:

• NZDUSD – The primary currency pair reflecting NZD strength, sensitive to export price shifts.
• NZX50 – New Zealand’s benchmark stock index, impacted by export sector performance.
• FGL – Fletcher Building, a major exporter sensitive to commodity prices.
• BTCUSD – Bitcoin, often a risk sentiment barometer, reacts to global trade and economic shifts.
• AUDNZD – Cross currency reflecting relative economic strength between Australia and New Zealand.

FAQs

What does the Export Prices QoQ figure indicate for New Zealand’s economy?

The figure reflects changes in the prices received by exporters. A decline suggests weaker external demand or lower commodity prices, impacting GDP and trade balance.

How does the Export Prices QoQ affect monetary policy?

Lower export prices can ease imported inflation pressures, potentially reducing the need for aggressive interest rate hikes by the RBNZ.

What are the risks to New Zealand’s export prices going forward?

Risks include global demand shocks, commodity price volatility, currency fluctuations, and geopolitical tensions affecting trade flows.

Final takeaway: The unexpected 1.60% decline in export prices signals caution for New Zealand’s external sector, complicating the inflation outlook and monetary policy path amid global uncertainties.