NZ's trade deficit narrows in February as dairy exports rise

New Zealand's trade deficit narrowed to $18 million in February but the annual trade deficit was the largest in nearly eight years.

The monthly trade deficit was worth 0.5 percent of exports, which compared to an average surplus of 9.1 percent of exports for the previous five February months, data from Statistics New Zealand showed. The country had a $257 million trade deficit In January. In the 12 months to February, the trade deficit was $3.79 billion, the largest since April 2009. Exports fell 5.5 percent to $4.0 billion and the largest decline was in the ships, boats, and floating structures commodity group due to the export of a large drilling platform in February 2016. Excluding the drilling platform, overall exports showed little change, up $35 million, or 0.9 percent, Stats NZ said.

Economists had expected a trade surplus of $180 million for the month, based on a Reuters survey.

Milk powder, butter and cheese - the largest export commodity group - rose $55 million or 5.6 percent in February. The largest rise in milk powder exports in February 2017 was to the United Arab Emirates, up $39 million or 123 percent. Exports of milk powder to China, the largest export market for that commodity, were up $15 million or 7.2 percent, despite an 8.1 percent fall in quantities exported.

"There were mixed results for New Zealand's other export commodities in February 2017," Statistics New Zealand international trade statistics senior manager Daria Kwon said. "Exports of dairy, meat, and fruit were up, but other primary produce exports, including fish, wool, and casein, were down compared with the same month of the previous year."

China remained the country's top export destination in February, up 6.3 percent while exports to Australia rose 2.1 percent.

Imports rose 4 percent to $4.0 billion but excluding crude oil, the total of all other imported goods rose by only 1.4 percent, Stats NZ said. Of the three main broad economic categories, intermediate goods rose 7 percent to $1.7 billion, capital goods rose 5.7 percent to $764 million while consumption goods fell 8.7 percent to $1 billion.

Imports from China fell 10 percent to $775 million, led by a fall in clothing. Imports from the EU rose 2.9 percent to $680 million, led by rises in passenger motor cars and aircraft parts.

(BusinessDesk)