Annual trade gap narrows on exports of dairy products

Monday 28th July 2008

New Zealand's annual trade deficit narrowed in June on soaring shipments of dairy products and less demand for imports in a weakening domestic economy.

The deficit was NZ$4.5 billion in the 12 months ended June 30, Statistics New Zealand said in a report. The annual trade gap shrank from NZ$4.8 billion in May.

Exports of milk powder, butter and cheese rose 58% in June and gained about 36% in the year, to NZ$8.76 billion. Oil exports soared 434%, leaping to the third-biggest shipment by value, reflecting sales from the Tui oilfield. Petroleum products led the gain in imports, rising 22% to NZ$7.08 billion.

Reserve Bank Governor Alan Bollard last week said high export prices should help with a gradual revival of the economy in 2009 after it contracted in the first quarter. Rising prices for imports of fuel and food will push annual inflation to a peak of about 5% in the September quarter, he said.

In the latest month, exports to Australia rose 50% to NZ$949 million while shipments to the US, the second-largest market for New Zealand products, rose 1.5% to NZ$342 million. Imports from Australia rose 11% to NZ$780 million and from No. 2 ranked China rose 7.1% to NZ$430 million.

By Jonathan Underhill

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