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Terms of Trade (Export Price Index over Import Price Index)

Also known as TOT · terms of trade index · export prices over import prices · relative price of exports · price of exports relative to imports · net barter terms of trade · export price index divided by import price index · how many imports an export buys · terms of trade of a country · commodity terms of trade

ToT=PxPm\mathrm{ToT} = \frac{P_x}{P_m}

Units aren’t used in this calculation: every value is a plain number.

sig figs

Worked example: 2026 Q2: exports 152.7 over imports 137.9 → 1.10732. Press Try an example to run it live, then adjust anything.

Enter your known values, leave one input blank, and solves for the missing one. Tap a variable’s symbol to see what it means, with a typical value.

See also

Inflation Rate from a Price Index: The change in either price index on its own, for how fast export or import prices are moving.Real Value from a Nominal Value (Deflating by an Index): Deflates an amount by a price index; deflating exports by import prices is what the terms of trade do to a country's real income.Percent Change: The change in the terms of trade from one period to the next.Exponential Growth: The yearly rate at which the terms of trade have moved between two dates.
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Terms of Trade (Export Price Index over Import Price Index) explained

countryworldexports PxToTimports Pm

The terms of trade are a ratio of two price indexes, so this page is a definition and not a model. The export price index PxP_x over the import price index PmP_m, both on the same base year, says how many imports one unit of exports can pay for. Macdonald's note for Statistics Canada (2008) defines it as export prices measured against import prices. When the ratio rises the country is better off, because its exports buy more imports than they did in the base year; when it falls the country is worse off, even if it exports as much as before. With both indexes at 100 in the base year the ratio is 1 then.

Because both indexes share a base, the ratio is best read as a change. Statistics Canada's index tables use a base of 2017 = 100, so a ratio of 1.107 in the second quarter of 2026 means each export bought about 11 percent more imports than the average of 2017. The same note records Canada's terms of trade at 0.98 in 2002 Q1 and 1.20 in 2007 Q2, a rise of 22.3 percent. Some authors multiply the ratio by 100 to give an index; this page leaves it as a ratio, the way Statistics Canada writes it.

The inputs are the implicit price indexes of Statistics Canada table 36-10-0106-01 for exports and for imports of goods and services. In the second quarter of 2026 exports stood at 152.7 and imports at 137.9, so the ratio is 152.7 / 137.9 = 1.107324. In the first quarter of 2026 it was 143.4 / 133.6 = 1.073353, and in the second quarter of 2022, the commodity price spike, 143.0 / 120.5 = 1.186722. The four quarters of 2017 average 100.0 for exports and 100.025 for imports, so the ratio there is 0.99975, near 1 as an index with a 2017 base should be.

Two cautions apply. The table publishes the two indexes and not their ratio, so the ratio is computed here, and the indexes must share a base year or the ratio is not comparable. And the terms of trade concern prices only: a rise says each export buys more imports, not that the country is exporting more. The percent-change page gives the change in the ratio from one period to the next. The real-from-nominal page deflates an amount by a price index, and deflating exports by import prices is what the terms of trade do to a country's real income.

Terms of Trade (Export Price Index over Import Price Index) formula

ToT=PxPm\mathrm{ToT} = \frac{P_x}{P_m}
Where
  • ToT\mathrm{ToT}= Terms of trade
  • PxP_x= Export price index
  • PmP_m= Import price index
Where this comes from
  • Macdonald, R. (2008). The Terms of Trade and Domestic Spending. Insights on the Canadian Economy, Statistics Canada, catalogue no. 11-624-M, no. 18 (the page does not print its date; the catalogue number carries 2008): 'the terms of trade - the price of exports relative to the price of imports', which 'determine the number of imports that each export can purchase'; Canada's terms of trade were 0.98 in 2002 Q1 and 1.20 in 2007 Q2, a rise of 22.3 percent. Open Government Licence - Canada. Read it
  • Statistics Canada, table 36-10-0106-01, Gross domestic product price indexes, quarterly: implicit price indexes (2017 = 100) for exports of goods and services and for imports of goods and services, read 23 Oct 2026 (Open Government Licence - Canada). The table publishes the two indexes and not their ratio. Read it
Revised 30 October 2026
Cite this page

formula.expert. (2026, October 30). Terms of Trade (Export Price Index over Import Price Index) Calculator. https://formula.expert/solvers/terms-of-trade

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