Trade surplus as China tops trading partners

GOOD MONTH: The volume of New Zealand logs exported in November was up 17 per cent NZH/file

New Zealand reported its first trade surplus for the month of November in 22 years as rising dairy exports into China made it the country's biggest trading partner.

The trade balance turned to a surplus of $183 million in November, the first since 1991, turning around a deficit of $173 million in October, and a shortfall of $587 million a year earlier, according to Statistics New Zealand. The annual trade deficit narrowed to $248 million from $1 billion in October, and $1.39 billion in November 2012.

Statistics NZ released the figures early after inadvertently publishing some of the data on its website today.

Exports rose 17 per cent to $4.47 billion in November from the same month earlier, and were up an annual 2.6 per cent to $47.43 billion. The monthly exports to China climbed 80 per cent to $1.23 billion from a year earlier, of which some $774 million was dairy products.

Sales to China rose an annual 42 per cent to $9.42 billion, making it New Zealand's biggest export destination, and the country's biggest trading partner.

"China is now our top export destination on an annual basis, just under two years after it became our top annual imports partner in December 2011," industry and labour statistics manager Louise Holmes-Oliver said in a statement.

Statistics NZ figures today showed dairy was largely behind a 1.4 per cent economic growth in the September quarter as the sector bounced back from last summer's drought, and Chinese demand for milk powder has helped lift the country's terms of trade to a 40-year high in that period.

Reserve Bank governor Graeme Wheeler last week warned of the increasing concentration of exports into China, having previously said a slowing in the world's second-biggest economy could take the wind out of high commodity prices and put an over-leveraged dairy sector under strain.

Today's trade figures show exports of milk powder, butter and cheese climbed 61 per cent to $1.69 billion in November from a year earlier, while casein and caseinates sales increased 28 per cent to $102 million. Dairy products made up about 29 per cent of the country's annual exports, up from about 27 per cent a year earlier.

The quantity of milk powder, butter and cheese rose 6.9 per cent to a seasonally adjusted 250,000 tonnes in November.

Exports of logs, wood and wood articles advanced 17 per cent to $338 million and were up an annual 21 per cent to $3.79 billion. The volume of logs and wood sold fell 14 per cent to 1.62 million cubic metres in the month.

Imports fell 2.8 per cent to $4.29 billion in November from the same month a year earlier, and were up an annual 0.1 per cent to $47.67 billion. Imports from China climbed 12 per cent to $820 million in November for an annual increase of 6 per cent to $8.21 billion.

Purchases of petroleum and products fell 38 per cent to $486 million in November, and were down 10 per cent to $7.69 billion in the year, while mechanical machinery and equipment imports rose 5.6 per cent to $571 million in November, down 0.8 per cent to $6.02 billion annually.