New Zealand posted a bigger than expected trade surplus in May as increased Chinese demand for logs and a growing international appetite for kiwifruit boosted exports.
The trade surplus of $358 million in May exceeded the $164 million expected in a Reuters survey of economists and was a touch smaller than the $367 million surplus posted a year earlier. Exports were up 5.1 per cent to $4.57 billion while imports gained 5.7 per cent to $4.22 billion, Statistics New Zealand said.
The rise in international sales was driven by a 42 per cent jump in logs, wood and wood articles to $373 million and a 22 per cent rise in fruit exports to $539 million. The increase in logs was largely due to Chinese demand rising $49 million in May from a year earlier, while kiwifruit sales gained in China and Europe and apple sales were up in the US.
The figures pre-date the outcome of last week's UK referendum on quitting the European Union, which triggered major uncertainty in financial markets and prompted New Zealand's Trade Minister Todd McClay to seek an audience with his British and European counterparts to ensure the country's interests are protected.
Today's trade figures show the UK as an export market has been growing at a slower pace than the rest of the European Union, up 6.9 per cent to $1.63 billion in the year ended May 31 compared to a 10 per cent increase to $5.42 billion across the wider EU bloc.
British imports rose 6.4 per cent to $1.43 billion, a faster pace than the 5.6 per cent gain in EU imports to $9.47 billion.
The UK is New Zealand's fifth biggest export market, behind Japan at $2.97 billion and ahead of South Korea at $$1.59 billion, and the 10th biggest import market, behind Malaysia at $1.59 billion and ahead of France at $1.34 billion.
New Zealand's annual trade deficit of $3.63 billion was smaller than economists expected, with exports up 1.7 per cent to $49.23 billion and imports gaining 3.7 per cent to $2.86 billion.
Exports of milk powder, butter, and cheese, the country's biggest export commodity, fell 10 percent to $11.13 billion in the year ended May 31, while casein and caseinates dropped 13 percent to $1.01 billion. Dairy products accounted for about 25 per cent of the country's exports.
Imports of petroleum and products sank 27 per cent to $4.73 billion in the year ended May 31 as cheap global oil prices continued to keep a lid on the cost of fuel.