New Zealand's trade accounts worsened in March, under the weight of falling export prices and a high exchange rate.
Exports exceeded imports by $134 million or 3.3 per cent - well below market expectations of a $445 million surplus. It reduced the annual trade surplus to just $207 million, from $655 million for the year ended February.
Exports at $4.2 billion were $400 million down on March last year, an 8.7 per cent decline. On a trade-weighted basis the New Zealand dollar appreciated by 12 per cent for the same period.
Dairy products, meat and forest products all declined from levels a year ago. Imports at $4.1 billion were up just 1.2 per cent on March last year, despite the favourable exchange rate, and that included a $300 million or 50 per cent increase in the value of oil and petroleum products imported.
Oil is imported in irregular shipments which can throw the monthly numbers around.
For the March quarter, oil imports at just under $2 billion were 18 per cent higher than in the March quarter last year.
New Zealand exports around two barrels of oil for every seven barrels of oil and petroleum products it imports.
In the March quarter, imports of plant and machinery were 6.7 per cent higher than in the same period last year.
Consumer goods imports were up only 0.6 per cent, but car imports were up 18 per cent.
On a seasonally adjusted basis the deficit in March was $358 million, Statistics New Zealand said. A seasonally adjusted deficit has been recorded for four of the past five months.
ASB economist Jane Turner said the impact of lower export prices, particularly for dairy and meat, was evident in the large seasonally adjusted deficit.
"Over the quarter, there was some interference to trade flows as a result of industrial action [at the Ports of Auckland], and it remains unclear if this continued to impact some sectors in March or not," she said.
Goldman Sachs economist Philip Borkin forecasts a continued deterioration in the annual trade balance over the rest of the year as a result of lower commodity prices - whose impact usually appears with a lag - an elevated New Zealand dollar and deteriorating trading partner growth.