Key exports falling
New Zealand posted a betterthan-expected trade surplus of $285 million last month.
The trade figures show twoway trade with China reached $20 billion a year for the first time.
But the figures also show signs of falling prices for dairy products and a big drop in log volumes, two of New Zealand’s top three export sectors.
‘‘Lower dairy prices are now starting to come through in the trade data,’’ Westpac economists said, with further falls expected in the June trade figures.
Statistics New Zealand figures show exports were worth $4.6b last month, up a seasonally adjusted 0.5 per cent on April.
Imports in May were worth $4.3b, up 2.9 per cent on April.
Imports of capital goods such as trucks, cranes and diggers have been rising in the past year.
Although exports in May were up more than $500m on the same month a year ago, Statistics New Zealand said ‘‘it appears the growth in exports seen in the past year has levelled off’’.
Exports to China, New Zealand’s main goods export partner, were up $204m to $868m last month, compared with the same 2013 period.
This was led by milk powder, crude oil and sheepmeat. It was the first shipment of crude oil to China since July 2009.
Although monthly trade figures are up strongly from a year ago, international dairy auction prices have slumped about 25 per cent since a peak at the start of this year.
Log export prices have fallen about 20 per cent in the past couple of months, with a glut of logs sitting on wharves in China and fears of large job cuts in the New Zealand forestry sector.
The seasonally adjusted export values of milk powder, butter and cheese rose 0.4 per cent in May, but because volumes were up almost 8 per cent, that implied a large fall in prices.
Westpac said it estimated a 7 per cent seasonally adjusted drop in dairy prices was offset by a similar jump in volumes.
Meat export values last month were down almost 7 per cent, repeating a similar drop in April. Most of the value drop reflected a fall in volumes last month.
New Zealand’s third-largest export, logs and wood values, slumped more than 8 per cent in May, with volumes down almost 15 per cent in a single month.