Export prices have shown the largest drop since the 1957 slump which led to the “Black Budget” of 1958.

Export prices fell 8,2% for the March quarter, Statistics New Zealand announced this morning.

The main cause was falling dairy prices, which plummeted 20.5% - the largest ever fall since the survey began in 1950.

On an annual basis the dairy fall is 10%, compared to a rise of 63.3% the previous year.

The other main cause was a drop of 28% in petroleum prices.

Import prices dropped 5.4% - again, this is a commodities story, with the fall of 35.8% in petroleum prices being the main cause.

On a volume basis, exports rose 2% and imports fell 9.8%. On the import front though, the biggest slump was in capital goods, which plummeted 30.1%, reflecting businesses cutting back on investing in plant and machinery and other productivity -enhancing goods.

This is the third consecutive quarterly fall in capital goods.

Offsetting that though was a rise in the imports of transport equipment and other related machinery. Mechanical machinery import prices rose 8.2% over the quarter, with computers, excavators and machinery parts being the principle drivers.