New Zealand recorded its fourth monthly trade deficit in a row due to a drop in exports of dairy products and crude oil, and resulting in a wider-than-expected annual gap.
The trade deficit was $700 million in November, widening from $666 million in October and from $577 million in the same month a year earlier, according to Statistics New Zealand. The annual deficit widened to $1.46 billion from $1.33 billion in the 12 months through October and from a small surplus in the same period a year earlier.
The annual trade gap exceeded the $1.34 billion forecast in a Reuters survey of seven economists. Exporters are having to cope with the headwinds of a New Zealand dollar that broke above 84 US cents overnight and has appreciated by 7.2 per cent on a trade-weighted basis in the past 12 months.
Total exports fell 2.4 per cent from a year earlier to $3.81 billion. Exports of milk powder, butter and cheese fell 10.3 per cent in November from a year earlier to $1.06 billion. Shipments of meat and edible offal jumped 10.2 per cent on the same basis to $341 million while exports of logs and wood gained 19 per cent to $287 million not enough to offset the fall in dairy.
Conditions for exporters are likely to remain challenging, with the recovery in global demand likely to be only modest and the elevated NZD continuing as a headwind, said Jane Turner, economist at ASB. The gradual pace of domestic recovery has resulted in a slight pick-up in imports.
Exports of crude oil fell 23 per cent to $95 million while imports of petroleum and related products jumped 46 per cent to $876 million.
Imports of mechanical machinery gained 9 per cent to $541 million and imports of vehicles rose 21 per cent to $533 million. Total imports rose 0.6 per cent to $4.51 billion.
China remained the biggest source of imports, falling 4.7 per cent to $737 million while goods from Australia fell 2 per cent to $676 million and those from the US dropped 37 per cent to $384 million.
Australia held its position as the biggest export market, with shipments falling 14 per cent to $795 million in November from a year earlier. Exports to China surged 60 per cent to $691 million and shipments to the US climbed 25 per cent to $368 million.
The deficit in November amounted to 18 per cent of exports. On a seasonally-adjusted basis the monthly deficit was $282 million