New Zealand posted a biggest-than-expected trade surplus last month on shipments of whole milk powder, logs and sheep meat to China.
The surplus was $414 million in February from a revised deficit of $287 million in the previous month, according to Statistics New Zealand. The annual trade deficit narrowed to $1.08 billion from $1.3 billion. The figures beat the Reuters forecast for a monthly surplus of just $17 million and an annual gap of $1.48 billion.
"This improvement may continue for another month or two before the drought begins to weigh on commodity export volumes and as the Canterbury rebuild increasingly adds to demand for imports," economists at Westpac said in a report. "Trade deficits will persist from this point."
Exports last month rose 8 per cent from a year earlier to $3.9 billion, driven by a 24 per cent gain in shipments of milk powder, butter and cheese. Among other gains, casein and caseinates rose $54 million, logs gained by $29 million and precious metals rose $26 million. Mechanical machinery posted the biggest decline, down $28 million.
Exports to China climbed 49 per cent in February from a year earlier, while the US took in 13 per cent more, exports to Singapore rose 70 per cent, Japan was up 12 per cent and Korea up 19 per cent. That was offset by a 9.2 per cent decline in exports to Australia, the nation's biggest market.
Imports rose 2.5 per cent to $3.5 billion, led by an 11 per cent gain in consumption goods such as clothing, footwear and furniture. Capital goods such as machinery and plant declined 5 per cent and intermediate goods such as fertiliser fell 0.9 per cent.
The seasonally adjusted surplus in February was $83 million.