New Zealand's merchandise exports rose to their highest monthly level in two years in March as the value of dairy exports to China jumped by two thirds.

Exports rose 11 per cent to $4.65 billion in March compared with the same month a year earlier, and marking the highest monthly level since March 2015, according to Statistics New Zealand. Dairy exports led the rise, with the value lifting 29 per cent, or $250 million, and the volume up 6.4 per cent. The gain in dairy products accounted for over half the total increase for exports in the month, and also marked the sixth consecutive month-on-month increase.

Global dairy prices have started to pick up this season as demand and supply come back into balance after record high prices in the 2013/14 season spurred farmers to ramp up production, causing an oversupply which led to two years of weak prices. Exports to China, New Zealand's largest market, jumped 43 per cent in March to $1.08b, as the value of dairy products rose 66 percent, or $114m, while the quantity rose 39 per cent.

"China continues to be our top destination for goods exports, and accounts for a quarter of the total dairy exports value," Stats NZ international statistics manager Tehseen Islam said. "This March, exports to China exceeded $1b for the first March month since 2014."

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Lamb exports to China also improved, increasing by 86 per cent, or $57m in March. Wool exports to China showed the biggest decline, down by 40 per cent, or $16m.

Meanwhile, imports into New Zealand rose 7.6 per cent to $4.32b in March, led by a 35 per cent rise in passenger motor cars.

New Zealand had a monthly trade surplus of $332m, or 7.1 per cent of exports. This compares with an average surplus of 11 per cent of exports for the previous five March months.

The annual trade deficit for the year ended March was $3.67b, narrower than the $3.77b shortfall in the year ended February.