March trade surplus as exports top $4bn for only the second time

New Zealand's trade surplus widened in March, as the shipments of dairy products helped push the value of exports to more than $4 billion for only the second time on record.

The surplus was $567 million, up from a revised $335 million in February, according to Statistics New Zealand data, beating expectations of a $380 million surplus. Exports were $4.1 billion, up 0.1 per cent from the same month a year ago, while imports fell 3.5 per cent to $3.5 billion.

Milk powder, butter and cheese marked the largest increase in exports, jumping 19 per cent to $969 million from the same month a year earlier as dairy prices continue to underpin gains in New Zealand's commodity prices. Dairy made up about 23 per cent of New Zealand's $39.55 billion worth of annual exports. Crude oil exports gained 122 per cent to $217 million from March 2009, as shipments more than doubled.

"After falling for 11 months the trend for merchandise exports appears to have reached a low point in October 2009 and has increased 7.5 per cent since then," the report said. "The level of the trend is 6.7 per cent lower than its peak in November 2008."

Reserve Bank Governor Alan Bollard today indicated in his review of the official cash rate that export commodity prices were close to their 2008 peak, and a swift economic recovery in New Zealand's trading partners underpinned the nation's own revival in growth.

New Zealand's export markets showed a rebalancing to China and away from the U.S., with exports to China rising 11 per cent to $441 million in March while the value of exports to the world's largest economy fell 18 per cent to $378 million. China has now leapfrogged the US as New Zealand's second-biggest export destination behind Australia.

China, the world's third-largest economy, accounted for $3.8 billion, or 9.6 per cent of annual exports. Exports to Australia rose 3 per cent in March to $946 million, while imports from across the Tasman rose 8.8 per cent to $654 million.

New Zealand reported a trade surplus of $233 million for the three months ended March 31, as exports rose 10 per cent to $10.4 billion from the previous quarter, its first such gain in a year. Milk powder, butter and cheese underpinned the quarterly performance, up 12 per cent to $2.68 billion.

The annual trade deficit narrowed to $194 million from a revised $324 million deficit in February.