Pow­der price slump hits hard

Matamata Chronicle - - Ru­ral De­liv­ery -

Dairy ex­ports to China are plung­ing, knock­ing a hole in to­tal ex­ports for Oc­to­ber and leav­ing a worse than ex­pected monthly trade deficit of more than $900 mil­lion.

The trade deficit of $908m was the worst for that month in six years, after the big slump in milk pow­der prices since the start of the year.

It was worse than the $640m monthly trade short­fall that economists ex­pected on av­er­age.

The an­nual trade bal­ance had been blown back from a sur­plus of $1.8 bil­lion in the Au­gust year to an an­nual short­fall of $107m for the year to the end of Oc­to­ber. It was the first time New Zealand ran an an­nual deficit since the end of last year.

Both im­ports and ex­ports were higher than ex­pected in the month, West­pac economists said.

In sea­son­ally ad­justed terms, there was a strong lift in wood ex­ports in the past month, but that may re­flect the tim­ing of ship­ments, rather than a rebound from the big drop in log vol­umes and prices after a glut in the Chi­nese mar­ket ear­lier this year, West­pac said.

Dairy ex­ports were weaker as ex­pected, with prices and vol­umes down by more than 4 per cent be­tween Septem­ber and Oc­to­ber, sea­son­ally ad­justed, West­pac said.

Lat­est trade fig­ures show Aus­tralia is once again New Zealand’s top ex­port mar­ket, knock­ing China off its pre­vi­ous perch.

Statis­tics NZ fig­ures show ex­ports were down $215m in Oc­to­ber, 5.1 per cent down on the same month last year.

Milk pow­der led the fall in ex­ports to China, slump­ing 77 per cent to $459m. Vol­umes were down 67 per cent.

Milk pow­der, but­ter, and cheese ex­ports to all coun­tries fell by $361m, as other coun­tries such as Al­ge­ria re­ceived a greater value than in Oc­to­ber 2013.

‘‘Milk pow­der ex­ports to China fell after the record prices and quan­ti­ties of late 2013, con­tribut­ing to a 40 per cent fall in ex­ports to China,’’ Statis­tics NZ in­ter­na­tional statis­tics man­ager Ja­son At­tewell said.

Ex­ports to Aus­tralia rose $32m (4.0 per cent), due to crude oil. This month, ex­ports to Aus­tralia were $185m higher than those to China, com­pared with last Oc­to­ber when they were $280m lower.

‘‘Since June we’ve sent a higher value of goods to Aus­tralia than to China, but China is still ahead for the 12 months end­ing Oc­to­ber,’’ At­tewell said.

The value of im­port rose $525m (12 per cent) to $4.9b com­pared with Oc­to­ber 2013.

The rise was across all three main broad eco­nomic cat­e­gories, led by cap­i­tal goods in­clud­ing air­craft, he­li­copters and goods ve­hi­cles.

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