June trade surplus $242 million, boosted by dairy exports

New Zealand reported a higher-than-expected monthly trade surplus of $242 million in June as exports were boosted by dairy sales, especially to China.

The annual deficit in the year to June was $3.7 billion versus $3.8 billion in the 12 months to May. Economists had expected a monthly surplus of $100 million and an annual deficit of $3.7 billion, according to the median in a Bloomberg poll. The June surplus was the fourth monthly surplus in a row.

Exports rose 11 percent on the year to $4.7 billion. Milk powder, butter, and cheese led the rise, up 45 percent to $1.2 billion and on an 11 percent increase in volume. The rise in dairy exports marked the ninth consecutive month-on-month increase as global dairy prices have continued to improve. Dairy exports to China jumped 102 percent in value and 63 percent in quantity to reach $373 million for the month, compared to June 2016.

"The milk powder, butter, and cheese group continues to be a key export commodity, and accounts for over a quarter of our total exports," international statistics senior manager Daria Kwon said.

Exports of meat and edible offal, the country's second-largest commodity export, rose 4.9 percent to $616 million. This is the sixth consecutive month of rises for meat. Lamb led the increase, up $19 million in value or 8.9 percent. The exports of logs, wood and wood articles, the third-largest group, rose 7.1 percent to $388 million. Fruit exports, meanwhile, slipped 11.8 percent to $419 million. The fall was mainly driven by kiwifruit, Stats NZ said.

Overall exports to China were up 25.6 percent for the month of June against June last year to $1.0 billion while exports to Australia rose 0.9 percent to $672 million.

Imports from all sources rose 7.7 percent to $4.5 billion in June versus the same month a year ago. Car imports led the rise, jumping 31 percent to $505 million. New motor cars led this increase, up $86 million in value. This was 2,566 more new cars than in June 2016, Stats NZ said.

Imports from China rose 5.8 percent to $860 million in June versus the same month a year ago while imports from Australia fell 0.3 percent to $533 million. The biggest increase came from imports from Japan, up 35.2 percent on the year to $376 million.

(BusinessDesk)