Log exports bolster trade surplus
New Zealand’s June trade surplus was wider than expected as exports were bolstered by logs and imports fell to their lowest level in 16 months.
Exports rose to $5.01 billion, up 2.8 per cent from a year earlier, while imports fell 10 per cent to $4.65b, said Stats NZ. The June trade surplus was $365 million. The annual trade balance was a $4.94b deficit versus a revised $5.59b deficit for the 12 months through May. The annual deficit in June last year was $4.2b.
Economists polled by Bloomberg had expected a surplus of $100m in June and an annual trade deficit of $5.1b.
Logs, wood, and wood articles led the June export increase, despite falling prices. They were up $65m, or 16 per cent, from the same month a year earlier at $472m and were up 22 per cent by volume. Untreated logs increased by $55m, or 20 per cent, to $324m and were up 26 per cent by volume.
“The average value of untreated log exports fell to $163 a cubic metre in June, down from a recent high of $177 in February,” international statistics manager Geraldine Duoba said.
New Zealand exports of untreated logs to China were worth about $3.0b in the past year, or 80 per cent of the $3.8b of total untreated log exports.
Milk powder, butter, and cheese exports rose $39m to $1.1b. Milk powder exports lifted 17 per cent to $547m and were up 8.9 per cent in quantity. Milk fats, including butter, fell 21 per cent to $286m.
In terms of New Zealand’s two largest trading partners, June exports to China were up 27 per cent from a year ago, and were up 23.6 per cent in the 12 months to June 30. Exports to China were led by increases in beef, milk powder and untreated logs.
Exports to China accounted for 26.4 per cent of total exports in the year ended June.
“Strong growth in exports to China continues to offset a slowdown in the value of sales to other key markets such as Australia and the EU,” Duoba said.
Exports to Australia, New Zealand’s second-largest trading partner, fell 6.8 per cent on the year in June and were down 2.2 per cent in the 12-month period.
On the import side of the ledger, the monthly value of imports fell to their lowest since February 2018. Petroleum and product imports fell 39 per cent to $493m, largely due to a 70 per cent drop in refined fuel imports.
Vehicles, parts and accessories imports fell 16 per cent to $664m while ships, boats and floating structures were down 91 per cent to $97m.