New Zealand's trade surplus narrowed more than expected in April as exports fell more than imports, driven by a drop in shipments of dairy products and meat.
The trade surplus was $534 million in April, from a revised $935 million in March, and $171 million a year earlier, according to Statistics New Zealand. The annual trade balance turned to surplus of $1.19 billion, or about 2.3 per cent of exports, from a deficit of $687 million a year earlier. Economists polled by Reuters predicted a monthly surplus of $667 million and an annual surplus of $1.3 billion.
Exports fell 11 per cent to $4.5 billion in April, for an annual increase of 9.5 to $50.6 billion. Imports declined 4 per cent to $3.96 billion in the month, with an annual increase of 5.3 per cent to $49.4 billion.
Milk powder, butter and cheese exports rose 36 per cent to $1.22 billion in April from the same month last year, for an annual increase of 33 per cent to $15.2 billion. Meat and edible offal rose 5.2 per cent in the month to $585 million for an annual gain of 3.5 per cent to $5.5 billion.
The trend for the dairy exports showed a seasonally adjusted 1.8 per cent fall this month and is now 5.4 per cent lower than December's peak, while meat and edible offal exports fell 5.9 per cent, Statistics NZ said. Both export groups reported lower volume in the month - milk powder, butter and cheese volumes fell 5.3 per cent to a seasonally adjusted 216 tonnes and meat and edible offal fell 8 per cent to 73 tonnes.
"Exports have begun their normal seasonal decline," Michael Gordon, a Westpac Banking Corp senior economist, wrote in a note. "The fall this month was driven by quantities rather than prices, with dairy products down 5 per cent and meat down 8 per cent by volume. While dairy prices in the GlobalDairyTrade auction system have fallen sharply since March, these prices related to delivery at future dates, so the impact should start to show up in the trade figures in the next few months."
Exports of logs, wood and wood articles gained 31 per cent to $363 million in the month, from April 2013, for an annual lift of 26 per cent to $4.13 billion.
Exports to China, the biggest market for New Zealand, jumped 38 per cent to $895 million in April for an annual gain of 52 per cent to $11.43 billion, or 23 per cent of all exports. Imports from China lifted 7.4 per cent to $631 million in the month, to an annual increase of 8.5 per cent to $8.4 billion.
Exports for Australia rose 8 per cent to $786 million, for an annual decline of 6.5 per cent to $9.09 billion. US exports rose 16 per cent to $371 million in the month and fell 3.3 per cent to $4.12 billion in the year.