The terms of trade of in the Netherlands were 1.7 percent lower in August than in the same month last year. Prices of exported goods in August were over 7 percent up on August 2007, while prices of imported goods were over 9 percent higher.
This is now the twelfth month in a row that the terms of trade have deteriorated. For one year now, the increase of import prices has been larger than the increase of export prices.
The increase in import prices is partly caused by higher prices for raw materials. The price of one barrel of oil (North Sea Brent) stood at 71 dollars a year ago, while in August 2008 it was 116 dollars on average. The cheap dollar is keeping oil prices here in check, however. In the space of one year, the price of the U.S. dollar dropped from 73 to 67 eurocents. This is reflected in an oil price of 52 euro per barrel in August 2007 and 77 euro in August 2008: an increase of 48 percent.
More information can be found in the article “Changes in the terms of trade in goods”.
Changes in terms of trade