Record lamb exports boost May's trade surplus to $294m

The annual trade deficit narrowed to $3.6 billion from $3.8b in the previous year.

Rising meat and forestry prices contributed to a surplus of $294 million in the merchandise trade balance for May.

This is higher than the average monthly surplus for that month over the past five years.

The exports total of $5.4 billion, a rise of 10% ($509m), is the second highest for any month. The record is $5.5b in December 2017.

The monthly value of imports rose $277m, or 5.7%, to $5.1b. This narrowed the annual trade deficit to $3.6 billion from $3.8b in the previous year.

Stats NZ says lamb exports hit a new record of $369m and compared with the previous high of $340m in February 2009.

“It has been a strong month for meat exports in general, with both lamb and beef increasing in quantities,” international statistics manager Tehseen Islam says.

Meat exports rose $119m, or 17%, to $812m. Quantity was also up 12%. Beef exports were up $16m (4.5%) to $359m, with more exports to China. This increase was partly offset by a fall to the US.

Forestry products had the second-largest increase in exports, up $99m (26%) to $477m. The biggest rises were to China, Singapore, and Hong Kong.

Westpac senior economist Satish Ranchhod says the export performance is stronger than expected.

"Adjusting for normal seasonal variation, exports were down only slightly, falling 0.3% in May following a solid 6% rise in the previous month," he says.

"Underlying this fall were declines in oil and fruit exports. These were balanced against increased exports of meat, logs and wood products, which were in part due to gains in prices."

Motor vehicles lead imports
Imports of cars rose $78m (17%) in May. This boosted overall imports of vehicles, parts and accessories to $924m, up $185m compared with the corresponding month last year.

The rise in motor vehicle imports follows earlier delays associated with stink-bugs on cargo vessels, Mr Ranchhod says.

In contrast, petroleum and products imports fell $196m (30%) to $455m. Crude oil led this fall, down $256m to $68m, the lowest value and quantity since May 2005..

Refining NZ reported that a maintenance shutdown at the Marsden Point refinery went into full swing from May 7 and was scheduled to be completed in mid-June.

Mechanical and electrical machinery and equipment were the other main contributors to the imports rise.