NZ posts trade surplus despite losing tailwind
Falling dairy prices have dented total exports, but New Zealand still ran a $247 million trade surplus in June statistics show.
June marked the eighth monthly trade surplus in a row and was stronger than expected because of lower oil imports, ASB economists said.
Exports were worth $4.2 billion in June and imports hit $3.9b.
Seasonally adjusted, exports were down 0.7 per cent between May and June, mainly reflecting the 4.7 per cent drop in dairy export values. With dairy export volumes up in the month, the total values reflected a price drop of more than 7 per cent ASB said.
Dairy products are New Zealand's top export, followed by meat, and then logs and wood. The overall trend for export values for the top three sectors has been steadily down this year.
But meat export values rebounded strongly from May, up almost 9 per cent in June, to almost $480m in the month, driven by 6 per cent higher volumes.
Exports of logs and wood fell another 2.5 per cent in June, after a near-15 per cent slump in May. Values for the forest products were steady in the month, after falling heavily during the previous three months.
Imports were almost unchanged in June, with a 27 per cent fall in petroleum imports the main factor.
But for the June quarter, the seasonally adjusted value of exports was down 7.4 per cent, to $12.4b Statistics NZ said.
Exports picked up strongly in the second half of last year, flattened out in the March quarter, and have now taken a dive in the June quarter.
"Exports growth seen in late 2013 was driven by rising dairy prices," Statistics NZ international statistics manager Jason Attewell said.
"Falling dairy values this quarter contributed to a fall in total exports."
Milk powder, butter, and cheese led the fall in exports, down 8.1 per cent in the June quarter, ($335m), although quantities were only down 1.4 per cent. Since a peak early this year, international dairy auction prices have slumped about 35 per cent, although the drop has yet to fully feed through to export values.
Statistics NZ said logs, meat, and fruit also had falls in both values and volumes.
Log prices slumped about 26 per cent in the last couple of months as demand dried up in China, with a glut of stock from earlier in the year.
Total exports to China have rocketed in the past year, to almost $11.6 billion for the June year, a gain of 50 per cent on the previous year. But sales to China for June alone were slightly down on the same month last year, at just under $700m.
Exports to New Zealand's second-largest trading partner, Australia, continue to weaken, with June-year sales down more than 6 per cent to less than $9b.
For the June quarter, seasonally adjusted imports rose 0.5 per cent ($66m), led by intermediate goods.
There was a $146m trade deficit in the June quarter, the equivalent to 1.2 per cent of exports.