New Zealand records goods trade deficit in June

New Zealand’s goods trade balance came in deficit in June, driving a broadening in the annual deficit to NZD 4 billion. Looking through the volatility, strength across export categories continued. It seems that the nation’s exporters have advanced from trade tensions with New Zealand well positioned to meet Chinese demand for some agricultural products in place of the U.S.

The unadjusted trade deficit came in at NZD 113 million – softer than anticipated. This, along with revisions saw the annual deficit broaden NZD 0.4 billion to NZD 4 billion. The big picture continues to be strong with widespread strength throughout most export sectors, led by solid demand from Greater China and the remainder of Asia.

Seasonally adjusted export values rose 2.5 percent sequentially in June. But the big three – diary, meat and forestry – were weak. Dairy values rose 0.1 percent sequentially, with a fall in prices largely countering a 2.5 percent rise in volumes. Meat and forestry values dropped 4.8 percent and 11.1 percent sequentially. The former reflecting a fall in volumes and price, with last month’s M-Bovis boost taking a hiatus. The latter driven solely by volumes, which could be volatile. Forestry prices continue to be in very good stead. Wine, seafood, and mechanical machinery and equipment made the largest monthly gains.

Seasonally adjusted imports came in at 6.8 percent sequentially, outpacing exports’ growth, driving the annual deficit wider. A 35.7 percent rise in petroleum imports more than counter softness in other main categories, including mechanical machinery and equipment, plastics, and electrical machinery and equipment.

While volatile, imports are showing a picture of sound domestic demand, with annual imports rising 11.3 percent from a year ago. Capital, intermediate and consumption goods all rose in the month.

At 13:00 GMT the FxWirePro's Hourly Strength Index of New Zealand was neutral at 20.0882, while the FxWirePro's Hourly Strength Index of US Dollar was highly bearish at -112.463. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex