A significant fall in dairy prices has affected the merchandise terms of trade.

That has decreased in the last quarter by almost 5%.

Data compiled by Statistics New Zealand shows export prices overall have fallen more than import prices.

And dairy is the most significant driver of that downturn.

Dairy prices fell 11% in the September quarter.

Declining values for forestry products have also contributed to the negative result.

The terms of trade has risen in the previous six consecutive quarters.