Oil import spike affects trade balance

THE annual trade balance has widened from $3.6 billion to $3.8 billion, with the balance for May smaller than expected because of a spike in oil imports.

The merchandise trade balance for May, the difference between exports against imports, stood at $103 million, with $4.95 billion exports against $4.84 billion imports, Statistics New Zealand international statistics senior manager Daria Kwon said yesterday.

Monthly imports were $635 million, up 15% from May last year. The leading contributor to the increase was petroleum pro ducts, up $269 million, or 71%, led by crude oil which was up $127 million, or 65%, on a year ago, she said.

‘‘Crude oil and other petroleum products are imported in large, irregular shipments, which can cause large percentage fluctuations in values.’’

ASB senior economist Jane Turner said the $103 million trade surplus for May was smaller than expected because of the spike in oil imports, which could be ‘‘lumpy’’ on a month by month basis.

Exports, at $4.95 billion for May, were largely in line with market expectations and slightly ahead of the ASB’s expectations, Mrs Turner said.

Dairy exports had performed better than expected.

‘‘Meat, fruit and fish exports also increased in May,’’ she said.

Westpac’s acting chief economist Michael Gordon had forecast the merchandise trade surplus at about $500 million; but it had narrowed to $103 million in May.

‘‘The difference was largely due to a higher than expected fuel import bill, which is unlikely to be an ongoing concern,’’ he said.

In seasonally adjusted terms, exports were down by 6.6%, but Mr Gordon noted that followed a 17.2% export surge in April.