NZ trade deficit widens to $285m in January, dominated by crude oil

Tuesday 28th February 2017

New Zealand widened to a $285 million trade deficit in January with imports rising to a record for the month, led by crude oil.

The monthly trade deficit was worth 7.3 percent of exports, though that drops to 0.9 percent, or $36 million, when crude oil exports and imports are excluded, Statistics New Zealand said. The country had a $41 million trade deficit in December 2016.

Exports rose 0.3 percent to $3.9 billion from the year earlier month, led by milk powder, butter and cheese which gained 4.5 percent, while log and wood exports dropped 4 percent. Milk powder exports, which increased $48 million in the month, were led by a $37 million gain in exports to China - a 19 percent value gain despite falling 1.7 percent by quantity. Butter exports rose 5.5 percent by value but dropped 20 percent by quantity. Meat, New Zealand's second-largest export commodity group, rose 2.7 percent in the month, led by lamb.

China remained the country's top export destination in January, up 12 percent overall, while exports to Australia rose 13 percent. Exports to the European Union, the fourth-largest market, dropped 26 percent with falls from meat, down 32 percent, and ships and boats.

Imports increased 8 percent to $4.2 billion, the highest value for a January month, with all three broad categories - capital goods, intermediate goods and consumption goods - rising. Crude oil imports rose 88 percent in the month, pushing the intermediate goods category to a 7.2 percent gain. Excluding crude oil, intermediate goods imports fell 1.5 percent.

Capital goods imports gained 9.3 percent, led by machinery and plants and transport equipment. Consumption goods rose 6 percent.

China also remained the top source for New Zealand's imports, though goods from the country dropped 0.5 percent to $874 million in the month with gains from machinery offset by falls in fertiliser and clothing.

Imports from the EU, the second-largest market, rose 0.6 percent to $715 million, led by a 30 percent gain on cars, more than half of which were from Germany. US imports gained 14 percent to $414 million, with a rise from machinery and organic chemicals.

On an annual basis, New Zealand had a merchandise trade deficit of $3.5 billion in the 12 months to the end of January.

BusinessDesk.co.nz

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