March trade surplus smaller than expected

Photo / APN

New Zealand posted a smaller-than-expected trade surplus in March, reflecting a drop in the value of exports of dairy products, crude oil and fruit.

The trade surplus was $134 million last month for an annual surplus of $207 million, according to Statistics New Zealand. Economists had expected a monthly surplus of $445 million and an annual surplus of $490 million, according to a Reuters survey.

The surplus in March was down from a revised surplus of $202 million and down from a surplus of $655 million for the 12 months through February, the government statistician said.

Dairy prices posted their biggest decline in 21 months in Fonterra Cooperative Group's latest GlobalDairyTrade auction, stoking speculation the world's biggest dairy exporter may revise down its forecast payouts for farmers. The ANZ Commodity Price Index, published last month, showed New Zealand commodity prices fell in March to the lowest level this year, led by a decline in dairy products and pelts.

Exports were valued at $4.22 billion in March, up from $3.62 billion in February though down from $4.62 billion in March 2011. Imports were $4.08 billion, up from $3.41 billion in February and little changed from $4.04 billion a year earlier.

Exports of milk powder, butter and cheese fell by 14 percent to $1.1 billion in March from the same month last year. Meat and edible offal fell 14 percent, logs, wood and wood articles declines 21 percent and precious metals, jewellery and coins dropped 45 percent.

Aluminium had the biggest increase, rising 39 percent to $151 million. Petroleum products also gained.

Exports to Australia, the nation's biggest market, showed the largest decline, falling 17 percent, led by crude oil. Exports to the UK fell 23 percent while shipments to Japan rose 25 percent.

A 55 percent gain in petroleum and products helped monthly imports edge up compared to March 2011.

The trade surplus in March was equivalent to 3.2 percent of exports - that's below the average 7.8 percent of exports in the previous five March months, Statistics New Zealand said.

The annual trade surplus amounted to 0.4 percent of exports.