NZ delivers healthy trade balance on back of strong export data, export volumes to drop away seasonally

New Zealand delivered a healthy trade balance on the back of strong export data for meat, forestry and dairy. The lift in exports more than offset the stronger than expected import data which was bolstered by the aircraft imports.

The unadjusted monthly trade balance of $433 million was well down on the previous month but slightly above expectations. Dairy export volumes were particularly high for this time of the season, while the lift in log exports aligned with expectations.

The growth of the kiwifruit industry also contributed more than normal to exports. Kiwifruit returns exceeded $2.3 billion for the first time with the earlier maturing gold varieties accounting for more than half of the returns.

On a seasonally adjusted basis, exports decreased 7.8 percent m/m, while imports were largely stable. Values and volumes for the three major export categories being dairy, meat and forestry all fell in April, when measured on a seasonally adjusted basis.

Seasonally adjusted imports were virtually unchanged with just a 0.1 percent m/m gain. Imports of petrol, textiles and plastics were all strong in the month.

China’s importance as an export destination for New Zealand products continues to grow. In the 12 months to April the value of goods exported to China lifted 21.9 percent. Strong growth was also recorded in other Asian destinations with exports to Japan up 6.9 percent and South Korea up 12.6 percent. The value of goods imported from China has also lifted 15.6 percent in the past 12 months.

"Looking forward, we expect to see export volumes drop away seasonally as we move towards the low production season for dairy. However, the later than usual meat processing season and elevated felling of forests will offset some of the seasonal weakness in dairy," ANZ Research commented in its latest report.