New Zealand has recorded its biggest annual trade deficit since April 2009, reflecting weaker prices of agricultural commodities such as dairy products, beef and lamb, and increased imports of vehicles and machinery.
The trade deficit widened to $3.8 billion in the 12 months ended March 31, from a deficit of $2.37 billion a year earlier, Statistics New Zealand said. Annual exports fell to $48.8 billion from $48.9 billion, while imports rose to $52.7 billion from $51.3 billion. The annual deficit exceeded the forecast of $3.56 billion in a Reuters survey.
Prices of dairy products have tumbled 58 percent over the past two years, based on the GlobalDairyTrade index. Fonterra Cooperative Group expects a recovery once global supply and demand come back into balance and the impact recedes of increased output from Europe. While exports have weakened and the low price of crude oil has slashed fuel imports, a relatively strong domestic economy is underpinning demand for imports, including record vehicle sales.
The monthly trade surplus narrowed to $117 million in March, a quarter of the surplus forecast by Reuters, from $367 million in February. Exports in the month fell 14 percent to $4.2 billion, led by a decline in milk powder and the effect of a $199 million drilling rig export in the year-earlier month. Imports fell 3.7 percent to $4.1 billion.