New Zealand posted a narrower trade deficit in August as exports of live animals and dairy products underpinned international sales, and imports from major trading partners declined.
The trade deficit shrank to $472 million in August from a revised July deficit of $724 million, and a shortfall of $1.24 billion in the same month a year earlier, according to Statistics New Zealand. That was below the $1.27 billion trade shortfall forecast in a Reuters poll of economists.
The New Zealand dollar rose as high as 80.83 US cents from 80.64 cents immediately before the 10:45am release, and was recently trading at 80.71 cents.
Exports rose 6.9 percent to $3.52 billion in August from the same month a year earlier, beating the $3.15 billion expected. Imports dropped 12 percent to $3.99 billion, lower than the Reuters forecast of $4.45 billion. Excluding a one-off import item in August 2013, imports were down 7.9 percent.
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New Zealand has benefited from strong terms of trade this year as strong demand for dairy products and logs from China have bolstered exports, while a high kiwi dollar keeps down the cost of imported goods. Recent declines in dairy and log prices are expected to see that trade outlook ease.
Live animal exports led the gain in monthly international sales, climbing more than 500 percent to $110 million as China imported live cattle, including dairy cows. Milk powder, butter and cheese rose 16 percent to $659 million. Meat and edible offal rose 18 percent to $322 million, while logs, wood and wood articles, the country's third largest export, dropped 25 percent to $289 million.
China remained New Zealand's largest trading partner, with exports to Asia's largest economy rising 9.7 percent in August, to $596 million, as the increase in live animals and meat was offset by a fall in milk powder and logs, Statistics NZ said. Imports from China fell 5.6 percent to $720 million, led by a drop in railway coaches and mobile phones.
Exports to Australia rose 5.4 percent to $739 million, led by crude oil. Imports from across the Tasman declined 1.9 percent to $563 million in August, in part due to a drop in fertiliser. Meanwhile exports to the US, the country's third largest export destination, climbed 24 percent to $330 million, led by casein and caseinates, beef and milk protein concentrate. Imports from the world's largest economy rose 3.7 percent to $445 million due to aircrafts and parts.
On an annual basis New Zealand remained in a trade surplus of $2.02 billion, with a 13 percent gain in annual exports to $51.25 billion, and a 3.4 percent increase in imports to $49.23 billion.