New Zealand's trade balance was $605 million in surplus last month, falling short of expectations by $375 million and dragging the kiwi dollar lower.
Merchandise imports climbed 17 per cent to $4.02 billion in May compared to the same month a year earlier, according to Statistics New Zealand.
That was $399 million ahead of a Reuters forecast, and was driven by the one-off import of aircraft parts, plus large irregular shipments of crude oil driving big swings.
Merchandise exports rose 10 per cent to $4.63 billion in with dairy, meat and timber driving the gains. The annual trade surplus pulled back to $1.07 billion.
"The weaker trade balance was a due to a sharp drop in dairy export volumes, a spike in oil imports and the import of aircraft parts," said Jane Turner, economist at ASB Institutional. "Both commodity and manufactured exports continue to perform very well, and highlight the export-led nature of the NZ economic recovery."
The kiwi dollar fell about 30 basis points immediately after the announcement, and recently traded at 80.33 US cents. The strong currency has been a boon to importers who have been able to buy offshore products more cheaply, though it has acted as a handbrake for exporters who have been crying out for state intervention in foreign exchange markets.
Still, commodity-based New Zealand exporters have been enjoying record prices for locally-produced raw materials on strong demand out of Asia.
Exports to Australia crept up 4.7 per cent to $963 million in May, followed by China, which surged 24 per cent to $560 million.
Receipts for milk powder, butter and cheese climbed 8 per cent to $981 million, while casein and caseinates rose 7.1 per cent to $67 million. Dairy products accounted for $11.95 billion, or 26 per cent, of the country's annual $45.91 billion total exports.
The data comes as Prime Minister John Key travels to India in a bid to make further steps towards a free trade agreement with the world's second-most populous nation.
Exports to India climbed 38 per cent to $89 million in May from the same month in 2010, while imports increased 2.4 per cent to $29 million in the same period.
