New Zealand's monthly trade deficit narrowed in October as an improving global dairy market buoyed exports of dairy products.
The country's trade deficit was $846 million in October, from $1.4b last month and $905m in October last year, Statistics New Zealand said. The annual trade gap narrowed to $3.297b from $3.356b in September.
New Zealand's exports in October advanced 2.2 per cent to $3.9b, led by a 13 per cent jump in the value of dairy product exports to $1.06b. The global dairy market is recovering after a prolonged slump in prices prompted farmers to pull back production, helping rebalance supply and demand for New Zealand's largest agricultural commodity.
Also helping buoy exports in the month, fruit shipments lifted 40 per cent to $147 million, while wood exports rose 25 per cent to $367m. Offsetting the gains, meat exports declined 18 per cent to $315m due to falls in beef and lamb, pushing meat down to third place in the monthly rankings behind wood.
"Dairy exports lifted in October, led by higher prices," ASB senior economist Jane Turner said in a note. "Fruit and forestry also performed very well. Meat exports, although up in October on a seasonally-adjusted basis, do appear to be weakening on a trend basis and are below year-ago levels."
Meanwhile, imports in the month advanced 0.6 per cent to $4.74b, boosted by the importation of an aircraft in the month, which saw imports of aircraft goods jump to $373m from $38m a year earlier.
Imports of vehicles, parts and accessories, the largest category, rose 14 per cent to $670m. Mechanical machinery and equipment, the second-largest category, dropped 16 per cent to $584m, while electrical machinery and equipment slid 8.4 per cent to $402m.
On an annual basis, exports declined 0.5 per cent to $48.67b in the year through October, compared with the same period a year earlier, while imports slid 0.3 per cent to $51.97b.