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June trade surplus $365M, higher than expected

Wednesday 24th July 2019

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New Zealand's June trade surplus was wider than expected as exports were bolstered by logs and imports fell to their lowest level in 16 months. 

Exports rose to $5.01 billion, up 2.8 percent from a year earlier, while imports fell 10 percent to $4.65 billion, said Stats NZ. The June trade surplus was $365 million. The annual trade balance was a $4.94 billion deficit versus a revised $5.59 billion deficit for the 12 months through May. The annual deficit in June last year was $4.2 billion. 

Economists polled by Bloomberg had expected a surplus of $100 million in June and an annual trade deficit of $5.1 billion.

Logs, wood, and wood articles led the June export increase, despite falling prices. They were up $65 million, or 16 percent, from the same month a year earlier at $472 million and were up 22 percent by volume. Untreated logs increased by $55 million, or 20 percent, to $324 million and were up 26 percent by volume.

"The average value of untreated log exports fell to $163 a cubic metre in June, down from a recent high of $177 in February,” international statistics manager Geraldine Duoba said.

New Zealand exports of untreated logs to China were worth about $3.0 billion in the past year, or 80 percent of the $3.8 billion of total untreated log exports.

Milk powder, butter, and cheese exports rose $39 million to $1.1 billion. Milk powder exports lifted 17 percent to $547 million and were up 8.9 percent in quantity. Milk fats, including butter, fell 21 percent to $286 million.

In terms of New Zealand's two largest trading partners, June exports to China were up 27 percent from a year ago, and were up 23.6 percent in the 12 months to June 30. Exports to China were led by increases in beef, milk powder and untreated logs. Exports to China accounted for  26.4 percent of total exports in the year ended June.

“Strong growth in exports to China continues to offset a slowdown in the value of sales to other key markets such as Australia and the EU,” Duoba said.

Exports to Australia, New Zealand's second-largest trading partner, fell 6.8 percent on the year in June and were down 2.2 percent in the 12-month period. 

On the import side of the ledger, the monthly value of imports fell to their lowest since February 2018.  Petroleum and product imports fell 39 percent to $493 million, largely due to a 70 percent drop in refined fuel imports. 

Stats NZ noted that in 2018 there was a planned maintenance shutdown of the Marsden Point oil refinery that ran from the end of March to mid-June. As a consequence, fuel imports during that period were unusually high, especially in May and June

Vehicles, parts and accessories imports fell 16 percent to $664 million while ships, boats and floating structures were down 91 percent to $97 million. 

(BusinessDesk)

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