Dairy, meat prices impact trade deficit
New Zealand recorded a trade deficit of $433 million in July as prices for primary products fell across the board.
But included among the imports was one aeroplane which was worth $258m alone.
Statistics New Zealand figures showed the country earned $4 billion from its exported goods for the month but paid $4.4b for its imports.
Compared with July 2015, lamb prices tumbled 29 per cent, while beef was down 15 per cent, bringing the total earned from meat and offal for the July 2016 month to $408m.
‘‘The meat export falls this month are partly due to record meat exports this time last year,’’ international statistics senior manager Jason Attewell said.
‘‘Meat values in July 2015, off the back of a record high meat season, were 31 per cent higher than the average value for the previous five July months.’’
However, even though the July monthly totals showed a fall, meat revenues were up 0.5 per cent for the year from July 2015 to 2016, while dairy fell by 8 per cent over the year.
ASB economist Nathan Penny said the fall was unexpected.
‘‘Meat export values fell heavily over the month, explaining the majority of the export weakness. Most of the fall was due to lower meat export volumes (down 10 per cent) and is not altogether surprising, since heavy recent slaughter rates (particularly of dairy cows) had to eventually reduce,’’ he said.
Meat Industry Association chief executive Tim Ritchie said the statistics also reflected the high value of the New Zealand dollar.
‘‘Against all the major currencies the dollar is a lot stronger than the year before and unfortunately you can’t escape those consequences.’’
Ritchie said against the US dollar the kiwi had risen from 70 cents to 76c, while against the pound it had jumped from 42 pence to 54p, and there had been a slight lift against the euro.
The United States and the European Union are the largest export destinations for beef and lamb, respectively.
Dairy exports also fell in July (down $88m). Milk powder fell $118m but was partly offset by rises in butter and natu- ral milk constituents. The fall in value of milk powder was price driven, as the quantity rose 0.9 per cent.
The value of milk powder exports to Algeria fell by 55 per cent because of a drop in its oil revenue. Algeria is New Zealand’s third-largest destination for milk powder.
Crude oil imports into New Zealand fell by almost half in July, accounting for just over one-third of the $503m fall in overall goods imports.
Ritchie said future meat returns depended a lot on the value of the dollar.
Another factor to add to the mix was the lower spring lamb crop, with Beef+Lamb New Zealand recently forecasting there would be 700,000 fewer lambs born this season.