New Zealand export earnings at all-time high as China trade booms

New Zealand earned more from exports in March than it has in any other month - ever.

Driven by higher exports of dairy, meat, and forestry products, especially to China, the value of total goods exports rose $899 million (19 per cent) from March 2018 to reach $5.7 billion, according to new figures from Stats NZ.

This was a new record for any month – the previous high for monthly exports was in December 2017, Stats NZ said.

Commodity exports continue to be a bright spot for an economy facing domestic headwinds around issues like a slowing property market and low business confidence.

The strength of Chinese demand for New Zealand products will also be good news for the Government.

It has increased despite signs that the Chinese economy overall has been slowing and suggestions earlier that New Zealand's diplomatic relationship with China was strained.

Overall global trade has slowed amid US/China trade tensions and economists have warned that global economic growth is slowing.

Despite that, demand for New Zealand's most important products has stayed strong with good prices for dairy, meat and wood.

The monthly trade balance in March was a surplus of $922 million.

That is the highest since April 2011 - when a record goods trade surplus for all months ($1.2 billion) was recorded.

Imports have been generally rising faster than exports in recent months and the annual goods trade deficit remains at high levels, Stats NZ international statistics manager Tehseen Islam said.

It was $5.6 billion in the March 2019 year.

But March saw a big fall in the value of imports of petroleum and products (down $130 million).

Other contributors to the decline in imports were vehicles, parts, and accessories (down $86 million), and aircraft and parts (down $71 million).

Dairy products lead the rise in exports, Islam said.

The value of dairy exports was up $264 million (22 per cent) to $1.4 billion in March.

The rise was led by milk powder, up $226 million on a year earlier. It was quantity-led, but unit values also rose, up 6.5 per cent on March 2018.

There were contrasting movements in other dairy commodities: the value of cheese exports rose $42 million, while butter exports fell, also by $42 million.

Other main contributors to the rise in total exports were meat and edible offal, food preparations (a commodity group that includes infant formula), forestry products, and fruit.

Of our main export markets, China had the largest increase, up $522 million (52 per cent) to $1.5 billion.

"Exports to China were the leading contributor to increases in several primary sector commodities including dairy products, beef, lamb, and forestry products," Islam said.