Commodity exports rise to a record for a November month as dairy prices lift

New Zealand's merchandise exports rose to their highest ever level for a November month as the country benefited from rising prices for dairy exports.

Goods exports jumped 20 percent to $4.6 billion in November from the period last year, the highest ever level for the month, said Statistics New Zealand. Exports of milk powder, butter and cheese led the rise, gaining 22 percent, or $262 million, to $1.5 billion.

New Zealand is the world's largest exporter of dairy products and has benefited from an increase in global dairy prices, boosting payouts to farmers and stoking the local economy. The latest gains were price led, with exports of butter up 79 percent in value but down 2 percent in volume, while milk powder was up 13 percent in value but 9.1 percent lower in volume, and milk and cream increased 122 percent in value and 43 percent in quantity.

Exports of meat and edible offal, the country's second-largest commodity export, rose 47 percent, or $160 million, to $499 million, led by a $92 million increase in lamb exports, Stats NZ said.

Meanwhile, exports of logs, wood and wood articles, the third-largest group, gained 50 percent to $484 million, as the quantity of rough logs exported rose 40 percent.

Exports to China, New Zealand's largest market, jumped 43 percent in November to $1.2 billion, led by a 54 percent increase in dairy products, an 87 percent rise in logs, wood and wood articles, and a 153 percent rise in lamb.

Goods exports to Australia, the second-largest market, lifted 3.6 percent to $762 million, with increases across a range of commodities, including food preparations such as infant formula, and milk powder, butter and cheese.

On the other side of the ledger, goods imports into New Zealand rose 27 percent to a record $5.8 billion. Mechanical machinery and equipment led the rise, up 50 percent, or $285 million, to $854 million due to increased shipments of parts of turbo-jets and turbo-propellers, computers and diggers. Imports of aircraft and parts jumped $268 million, due to the importation of a large aircraft.

Vehicles, parts and accessories rose 18 percent, or $127 million, to $836 million. The value of car imports reached a new high of $513 million and there were 26,700 passenger motor cars imported in November, including 140 new electric cars and about 170 used electric cars, Stats NZ said.

New Zealand had a monthly trade deficit of $1.2 billion, compared with an average of $447 million for the previous five November months. Stats NZ noted that monthly trade deficits can be significantly affected by large value import items such as aircraft, and excluding those items the November deficit would have been $930 million.

Stats NZ said the trade-weighted index has fallen 6.2 percent from November 2016. That makes imported goods and services more expensive domestically but makes exports to foreign markets cheaper.

The annual trade deficit for the year ended November was $3.4 billion, up from the $3 billion shortfall in October and $3.2 billion in November last year. Annual goods imports were valued at $56 billion, ahead of the $51.7 billion a year earlier, while annual exports increased to $52.5 billion from $48.5 billion.

(BusinessDesk)