Trade surplus widens in March as dairy drives exports into China

Michael Gordon, Westpac Banking Corp senior economist

New Zealand's trade surplus widened in March as Chinese demand for dairy products continued to soar, driving the monthly and annual export receipts to new records.

The trade surplus was $920 million in March, from a revised $793 million in February, and $732 million a year earlier, according to Statistics New Zealand. The annual trade balance was a surplus of $805 million, or 1.6 percent of exports. Economists polled by Reuters predicted a monthly surplus of $937 million and an annual surplus of $920 million.

Exports climbed 15 percent to $5.08 billion, for an annual increase of 8.5 percent to $50.07 billion. That was the first time New Zealand's international sales topped $5 billion in a month and $50 billion in year.

Milk powder, butter and cheese exports advanced 45 percent to $1.53 billion in March for an annual increase of 31 percent to $14.92 billion, while casein and caseinates gained 17 percent to $93 million for an annual lift of 7.5 percent to $988 million. Dairy products accounted for about 30 percent of all exports.

"While March tends to be the peak month for exports, this was also a record high in seasonally adjusted terms," Westpac Banking Corp senior economist Michael Gordon said in a note. "Dairy products were down 9 percent by volume, but there were increases in exports of meat, oil and machinery."

Meat and edible offal sales rose 12 percent to $731 million for a 4.1 percent annual gain to $5.5 billion, while exports of logs, wood and wood articles gained 14 percent to $385 million for an annual lift of 24 percent to $4.05 billion.

Imports rose 13 percent to $4.16 billion for an annual lift of 5.5 percent to $49.26 billion. The monthly figure included a one-off $216 million import of a drilling platform.

Exports to China jumped 31 percent to $1.13 billion in March for an annual gain of 51 percent to $11.19 billion, or 22 percent of all exports. Imports from China were up 14 percent to $550 million in the month for an annual gain of 7.9 percent to $8.37 billion.

Exports to Australia fell 1.5 percent to $2.17 billion in March for an annual decline of 7.3 percent to $9 billion, while US exports were up a monthly 4.5 percent to $476 million, slowing the yearly decline to 6.2 percent to $4.07 billion.

(BusinessDesk)

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