China pips Oz as NZ's top annual export destination
China pipped Australia to become New Zealand's top annual export destination in October, as increased sales of beef, milk powder and kiwifruit to Asia's largest economy contrasted with a decline in crude oil sales to Australia.
Goods exports to China increased 9.2% to $678 million in October, compared to the same month last year, taking annual exports to the country to $8.41 billion, Statistics New Zealand said. Exports to Australia slipped 8% to $754 million in the month, for an annual total of $8.36 billion, the agency said.
China became New Zealand's largest export destination in November 2013, as the country benefited from an October 2008 free-trade agreement to the world's second-largest economy. However China fell behind Australia in New Zealand's export rankings from March through September this year amid declining exports of dairy products, New Zealand's largest export commodity.
China returned as both the largest annual import and export market for New Zealand in October, with total trade of $18.49 billion, compared with total Australian trade of $14.65 billion.
"China is back as both our top export destination for goods, and our top source of imports," ASB rural economist Nathan Penny said in a note. "Australia had been the top goods export destination. Although milk powder exported to China fell 65% for the year ended October 2015, it is still the largest commodity export. Other exports to China, such as beef and fruit, have doubled in value in the past year."
New Zealand recorded a trade deficit of $963 million in October, close to the $937 million deficit expected in a Reuters poll of economists. The actual annual deficit of $3.24 billion compared with expectations for a $3.37 billion deficit in the Reuters poll.
In October, New Zealand exports fell 4.5% to $3.83 billion compared to the same month last year, against expectations for $4.02 billion in the Reuters poll. The decline was led by a 29% drop in the value of milk powder exports to $473 million as prices declined.
In contrast, exports of meat – the second-largest commodity group – rose 23%, led by a 40% rise in beef exports to $170 million, and a 14% increase in lamb exports, the statistics agency said. Fruit exports jumped 42% to $105 million, led by an 81% gain in kiwifruit.
Meanwhile, imports slid 2.2% to $4.79 billion in October compared to the same month last year, against expectations for $5.01 billion in the Reuters poll. The declines were led by falls in petrol and avgas and capital goods, the agency said.