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June trade surplus wider than expected on dairy exports

BUSINESSDESK: New Zealand's trade surplus was wider than expected in June as the country's dairy producers sold more product overseas.

The surplus was $331 million last month, up from a revised $232 million in May, Statistics NZ says. That is wider than the $134 million forecast in a Reuters survey. The annual deficit of $747 million, or 7.9% of exports, was smaller than the expected $870 million shortfall.

Exports rose 6.2% to $4.2 billion in June, with a 9.9% lift in foreign sales of milk powder, butter and cheese to $979 million, and a 25% gain in log, wood and wood article sales to $312 million.

New Zealand producers sold a seasonally adjusted 240,000 tonnes of milk powder, butter and cheese in June, up 24% from the same month a year earlier, while log and wood quantities were 49% higher than a year earlier at 1.72 million tonnes.

Dairy products, including casein and caseinates, made up 27% of New Zealand's annual $46.68 billion exports.

Statistics NZ says the trend for monthly exports of milk powder, butter and cheese has been declining since a record high in November 2011. Last month was excluded from its calculations because it was "unusually large".

The country's exporters increased the value of sales into China 58% to $602 million in June, taking annual exports to $6.12 billion.

The increase in foreign sales to Asia offset a 21% slump in exports to the European Union, as that region contends with sovereign debt woes, eroding its ability to import goods.

The value of New Zealand's imports rose 3% to $3.87 billion with an increase in the value of vehicle parts and crude oil.

Last month, the kiwi dollar was 1.1% higher on a trade-weighted basis than in May and 0.7% higher than June 2011.

Comments and questions
1

This trade surplus is a crock.

Trade surplus is irrelevant to the level of net dividends deficit removed from the NZ economy every year. $12 billion and increasing daily.

Think about this folks. NZ's yearly exports amount to $60 odd billion, however this hardly represents profit. Fonterra, our largest locally owned (for how long) company, only generated a $1 billion profit. Thats 12 Fonterras profits leaving our shores yearly, to circulate elsewhere.

The present government borrowing only increases to net dividend deficit. NZ should be printing its own money, instead of borrowing printed money from overseas, which will be used to buy more of NZ's assets.

The solution is to take the private out of banking and money, and its so obvious. Follow the money!!