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NZ annual trade deficit smallest in 7 years, imports slump more than exports

Thursday 7th January 2010

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New Zealand’s annual trade balance shrank to its smallest deficit in more than seven years as the value of imported good slumped more than exports.

Statistics New Zealand’s overseas merchandise trade figures released today show the trade deficit falling to $846 million, or 2.1% of exports, in the 12 months through November, from an annual $5.2 billion deficit a year earlier.

That’s the smallest deficit since September 2002 and much lower than the average 16.3% of exports over the past five years.  

The trade balance was a deficit of $269 million for November, from $487 million deficit in October and a $594 million deficit in the same month of 2008.

The value of imports slumped 22% to $3.3 billion from November a year earlier, a level comparable to April 2005 according to government statistician Geoff Bascand, while exports tumbled 17% to $3.1 billion.  

“The trend for total merchandise imports has been declining following the peak in August 2008 and is down 25.7% since then,” Bascand said in his report. ”

The fall in the trend continues the longest period of decline and the largest fall since the series began in 1988, although the rate of decline has been easing in recent months.” 

The decline in imports was led by mechanical machinery and equipment, down 26% to $392 million in November from a year earlier, with computer parts and accessories, diesel engines and aircraft parts “notable contributors to the decrease.”

Petroleum and products slumped 21% to $479 million led by crude oil and diesel, and salts, earths, stone, lime and cement imports sank 84% to $24 million.  

U.S. imports shrank 35% to $281 million while the value of Chinese goods entering New Zealand tumbled 21% to $546 million.  

A 25% slump in milk powder, butter and cheese to $753 million led the fall in exports, followed by casein and caseinates, which tumbled 52% to $55 million.  

Dairy prices surged after hitting a trough in July, underpinning gains in New Zealand’s commodity prices, though the first quarter of any increase was chewed by up a rampant currency, which climbed almost 50% from its sub-50 U.S. cents low last March.

The kiwi dollar recently traded at 73.71 cents from 73.75 cents immediately before the announcement.  Trade with Australia remained strong, with exports up 8.3% to $889 million in November, while imports coming the other way edged up 1% to $682 million.

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