Shipments of milk powder, butter and cheese dropped by 16% to $1.1 billion. 

The annual deficit of $866 million is bigger than the expected $770 million.

A continuing export boom and a drop in imports is behind the huge – and surprising – drop in New Zealand’s trade deficit for January.

The deficit shrank to $187 million from $347 million the previous month.

Consensus forecasts were for a rise to a $450 million deficit, with some economists picking an even higher figure.

The deficit is the lowest for January in both price and volume terms since January 2001.

The rise in exports was due primarily to rises in cereals, flour and starch, which more than doubled on last January to $52 million.

New Zealand’s $520 million trade deficit for November 2008 is 14.1% of the value of exports, the smallest deficit since November 2001 according to a report released this morning by Statistics New Zealand.

October’s trade deficit was $996 million, and the annual trade gap fell from $5.27 billion to $5.16 billion.

Yesterday’s trade figures have some good, some bad, and some stuff to have you reaching for a bracing dram.

The ugly, first: the trade deficit blew out to $1.183 billion for September. No one, not even the most terminally downbeat economist, expected that. Most were picking something around $800 million – not a million miles from August’s $750 million.

The good? Exports reached $10.9 billion, which is a new high.

Imports also hit a new high – $12.4 billion.

New Zealand’s current account deficit blew out to $1.2 billion in September, the country’s worst month in nearly three years.

The result saw a 24% surge in imports from last September to $4.4 billion, negated by an 8% increase in exports to $3.2 billion.

This was the worst monthly deficit since November 2005.

Kiwifruit, iron and steel products and white wine were among the notable increases in exports.