A slump in dairy and beef exports and higher than expected imports have left a $1.26 billion trade deficit - more than $500 million greater than market expectations.
Imports were down 3.1% for August and stood at $4.65 billion; much of it due to passenger vehicles and a lift in plant and machinery, while exports were down further at 8.7% to $3.38 billion, with overall dairy exports down $135 million against August last year.
The $1.26 billion deficit represents 37% of exports, Statistics New Zealand international statistics senior manager Stuart Jones said.
While the milk powder, butter, and cheese commodity group fell $135 million from August 2015, milk powder led the fall, down $90 million.
Meat and edible offal had a large fall, down $111 million, with falls in both beef and lamb, he said.
"The fall in meat exports is partly due to a record high meat season this time last year,'' Mr Jones said.
ASB senior economist Jane Turner said the August "trade deficit blow out'' was in part due to seasonality but also to "lumpy'' dairy export volumes.
"The trade deficit was much larger than the ASB and the market expected,'' she said.
ASB had picked a deficit of $800 million and the market $735 million; against the actual $1.26 billion deficit.
Mrs Turner said she expected declines in dairy export volumes during the coming year as production falls but said the recent dairy price recovery would soon feed through and help offset lower output.
She said the main strength during the past year had continued to lie in export sectors such as fruit, wine and forestry and that trend should continue, although the higher New Zealand dollar would pose challenges to those sectors.
Westpac economist Sarah Drought said the $1.26 billion monthly trade deficit was "surprisingly large''; Westpac having picked a $730 million deficit.
Meat exports remained weak in August, down 26% from a year ago, largely due to significant drop in volumes, she said.
However, she said dairy exports should pick up in coming months with the 30% lift in global dairy prices since July beginning to flow through into export receipts.
Mr Jones said logs, wood, and wood article exports, high volumes and values, offset part of the fall in exports, rising by more than $100 million.
"Led by untreated logs, the commodity group hit a new high for export value and was up 3.7% from the previous high in August 2013,'' Mr Jones said.