Dairy slump hits NZ exports to China

New Zealand posted a small trade surplus of just $50 million in February with dairy export​s down heavily, especially to China, New Zealand's top export market.

Some economists had expected a monthly surplus of about $350m.

The trade shortfall for the year ended February 2015 was a deficit of $2.2 billion.

Exports to China have boomed in the past few years, but melted down last year as dairy product prices plunged.

Total exports to China in February were worth $740m, down more than 36 per cent on the same month last year. 

However, Statistics NZ figures showed an 11 per cent lift in seasonally adjusted exports to China between January and February, a gain of $64m.

China remains New Zealand's biggest export market, worth almost $9b in the past year, just slightly ahead of Australia.

But the trend for exports to China has been falling for the past year, and is down 45 per cent from the peak in late 2013. In fact, it has returned to levels seen in 2012.

Beef exports, on the other hand, are up from a year ago, with strong sales to the United States.

Total exports were worth $3.9b for the month, just barely ahead of monthly imports which were also about $3.9b.

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Seasonally adjusted exports fell 3.2 per cent between January and February, while imports rose 5.8 per cent.

Beef exports​, on the other hand​, were up ​from a year ago with strong sales to the United States.

Some economists had expected a monthly surplus of about $350m.

Exports were down $608m on February last year.

Milk powder, butter, and cheese exports led the fall, down 41 per cent or $647m from February 2014.

Dairy export volumes were down 10 per cent. Over three-quarters of the drop in value was due to falling exports to China.

"Annual dairy export values are still coming down from the highest annual level, which was in mid-2014, but quantities exported have remained fairly stable," Statistics NZ international statistics manager Jason Attewell said.

"Annual values are now 16 per cent lower than for the year ended August 2014 and are at similar levels to late 2013."

Meat values rose 12 per cent compared with February 2014. Frozen beef to the United States continued to push meat export values to new highs.

Imports rose 3.7 per cent to $3.9b. Consumption goods including clothing led the rise, up 14 per cent.

Machinery and plant equipment rose 13 per cent, led by mobile phones.

 - The Dominion Post

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