NZ trade deficit narrows
New Zealand’s trade deficit narrowed in September as the value of dairy exports rose, but was still wider than economists expected on both the monthly and annual basis.
The country’s trade deficit was $1.1 billion in September versus $1.4b in the same month a year earlier, Statistics NZ said. That was wider than the $975 million median forecast in a Bloomberg survey of 10 economists.
The annual deficit was $2.91b versus $3.35b a year earlier. Economists surveyed by Bloomberg had expected an annual deficit of $2.71b.
Stuart Ive, OMF private client adviser, said the numbers were not “far off the mark” and need to be massively different to impact the currency. “There were no surprises.”
Exports rose 9 per cent to $3.78b in September compared with the same month a year earlier, versus expectations of $3.9b. Milk powder, butter and cheese posted the largest increase of any export commodity group in September, rising 28 per cent to $791m.
The value of exported milk fats — including butter — rose 43 per cent to $207m while the quantity sold dropped 22 per cent. Milk powder export values rose 20 per cent even as the volume shrank 15 per cent.
“The increases in both butter and milk powder were price-driven,” said international statistics manager Tehseen Islam. “Milk and cream were mainly volume-driven, especially to China, though prices were up, too.”
Exports to China rose 33 per cent to $875m in September from the same month a year earlier, led by dairy, while exports to Australia rose 7.9 per cent to $740m.
Fruit exports fell 30 per cent in value to $160m while volumes dropped 38 per cent. The fall was due to kiwifruit, which fell $70m in value and 42 per cent in quantity.
Imports lifted 1.4 per cent to $4.92b, in line with expectations. Mechanical machinery and equipment led the rise, up $116m or 19 per cent. Food residues, wastes and fodder rose $47m or 118 per cent.
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Rebecca Howard