NZ trade balance back in surplus in February; port disputes threaten loading

BUSINESSDESK: New Zealand’s trade balance was back in surplus in February, though the government statistician said weaker than expected imports and exports may have been impacted by escalating industrial action around the country.

The trade balance was a surplus of $161 million in February, turning from a revised deficit of $159 million a month earlier, according to Statistics New Zealand. That was in line with the predicted surplus of $153 million in a Reuters survey of economists.

Exports fell 6.9 percent to $3.59 billion while imports dropped 6.6 percent to $3.43 billion – short of expectations of $4.01 billion and $3.65 billion respectively.

“Anecdotal evidence also suggests that industrial disputes may have had an impact, due to delays in the loading of some goods,” industry and labour statistics manager Neil Kelly said in a statement.

“We expect this picture to become clearer when March month and quarter data are fully available. Given these factors, movements in February values should be treated with caution,” he said.

Ports of Auckland management and unionised wharfies are at loggerheads over plans to increase use of casual labour at the country’s biggest import hub. That’s led to rolling strikes and repeated lock-outs in an industrial dispute which has cost the port major contracts with Maersk shipping line and Fonterra Cooperative Group.

Statistics NZ said the industrial disputes may have impacted values by delaying the loading and unloading of vessels.

The annual trade balance was a surplus of $621 million, in line with the forecast surplus of $621 million.

A slump in the value of exported crude oil led the decline in international sales, with crude oil exports down 53 percent to $94 million in February compared to the same month a year earlier. Some 91,000 tonnes of crude oil was sold overseas that month, compared to 206,000 in February 2011.

Exports of aluminium and aluminium articles sank 74 percent to $46 million in February, with just 9,000 tonnes sold in February compared to 33,000 a year earlier. Aluminium exports are down 5.5 percent to $1.16 billion on an annual basis.

The value of milk, powder, butter and cheese fell 6.1 percent to $914 million in February, with volumes roughly unchanged at 213,000 tonnes. Casein and caseinates dropped 25 percent to $46 million. Dairy products account for about 26 percent of New Zealand’s annual exports worth $47.87 billion.

Dairy prices have been falling on Fonterra’s online trading platform, and this week dropped to the lowest level since August 2010. Dwindling prices and a resiliently high kiwi dollar prompted Fonterra to cut its forecast pay-out to farmers this season.

Exports to Australia, New Zealand’s biggest trading partner, dropped 11 percent to $750 million in February, while sales to China declined 15 percent to $526 million. Exports to Japan sank 42 percent to $177 million.

The value of imported petroleum and products fell 15 percent to $569 million, with 569,000 tonnes bought from overseas compared to 666,000 tonnes a year earlier.

Imported capital goods, such as machinery and equipment, dropped 20 percent to $592 million in February, while intermediate goods, such as crude oil and diesel, dropped 7.2 percent to $1.62 billion.

Imports from the US sank 39 percent to $309 million in February compared to the same month a year earlier, when New Zealand imported capital goods in 2011. Imports from China fell 4.5 percent to $542 million in the month, while sales from Australia rose 3.7 percent to $580 million.