NZ annual trade deficit at seven year low

The largest category fall in exports was in milk powder, butter and cheese. File photo / Herald on Sunday

New Zealand had a lower than expected trade deficit of $269 million in November, as imports and exports continued to fall compared to year earlier figures.

At the same time, the annual trade deficit fell to its lowest level since September 2002, at $846m or 2.1 per cent of exports, compared to an average 16.3 per cent of exports for the preceding five November years.

Exports in November were valued at $3.1 billion, down $614m or 16.7 per cent from a year earlier, while imports were down $938m or 22 per cent to $3.3b, Statistics New Zealand (SNZ) said today.

It was the eighth consecutive monthly fall for imports and the sixth consecutive month that exports had fallen compared with the same month of the previous year.

Despite the continuing declines, car imports rose compared to a year earlier for the first time after 13 months of falls. They rose $74m or 46.9 per cent compared to November 2008, when the lowest November value since 1997 was recorded.

The largest category fall in exports was in milk powder, butter and cheese, which dropped $250m or 24.9 per cent.

That decline was led by unsweetened whole milk powder, which fell $81m or 24.9 per cent due to lower prices, with quantities exported rising 48 per cent, SNZ said.

The casein and caseinates category had the second largest fall in exports, down $60m or 51.8 per cent, which was mainly price-driven while quantities fell 9.8 per cent.

Mechanical machinery and equipment was down $52m or 29.2 per cent, the next largest decrease, while meat and edible offal exports fell $40m or 11.7 per cent mainly due to a fall in frozen beef cuts.

The largest rise in exports was in crude oil, which lifted $86m or 11.7 per cent, with quantities more than double those of November 2008. Crude oil shipments could be irregular, SNZ said.

Among imports the largest fall was in the intermediate goods category, which fell $741m or 33.9 per cent.

Falls in the category were widespread, with crude oil down $125m or 35.9 per cent mainly due to lower prices, SNZ said.

Other commodities showing significant declines included natural calcium phosphates, where quantities almost halved, while in the fertilisers category there were large falls in both urea and potassium chloride.

Capital goods imports fell $226m or 29.4 per cent in November, with mechanical machinery and equipment -- down $137m or 25.9 per cent -- the most notable contributor to the fall.

The November trade deficit of $269m was equal to 8.8 per cent of the value of exports, and compared with an average November deficit of 27.6 per cent of exports for the previous five years, SNZ said.

The median forecast from a Reuters poll of economists had been for a November month deficit of $400m.

- NZPA