New Zealand posted a smaller-than-expected surplus in April, reflecting a drop in the value of exports of milk powder, butter and cheese.

The trade surplus was $355 million last month, according to Statistics New Zealand. Economists had expected a surplus of $500 million, according a Reuters survey. For the 12 months ended April, there was a trade deficit of $541 million.

A decline in the value of dairy exports comes as Fonterra Cooperative Group, the world's biggest exporter, cut its forecast 2012 milk price and flagged lower payments in 2013.

Prices in Fonterra's GlobalDairyTrade auction have dropped 41 per cent during the past 12 months, reflecting a slide in commodity prices as traders factor in weaker demand from China and European uncertainty, which has helped drive up the US dollar.


"Most commodities for exports fell this month, with primary products driving the decrease, although it should be noted that April 2011 had the highest exports value for any month on record so far," Neil Kelly, industry and labour statistics manager, said in a statement.

Exports decreased to $3.89 billion in April from $4.21 billion in March, falling 17 per cent from April 2011's record high of $4.69 billion. Imports were $3.53 billion, down from $4.02 billion last month and little changed from a year earlier.

Exports of milk powder, butter and cheese fell by 25 per cent last month, with the leading contributors' being unsweetened milk powder and anhydrous milk fat.

Meat and edible offal fell 26 per cent, led by frozen cuts of lamb, while crude oil was down 51 per cent. Casein and caseinates recorded the largest offsetting increase, up 36 per cent.

Exports to Australia, the nation's biggest export partner, once again showed a decline, falling 13 per cent, led by crude oil. New Zealand's second biggest export market China, also recorded a decrease, of 11 per cent. Exports to Japan fell 20 per cent on a variety of commodities, including logs, wood and wood articles.

Exports rose to Malaysia, the US and Libya.

A 21 per cent gain in capital goods helped monthly imports edge up slightly from a year earlier.