New Zealand’s trade deficit was smaller than expected in July as exports of fruit and meat drove overseas sales higher, and offset flat dairy export receipts.
The trade deficit narrowed to $649 million in July from $943 million a year earlier, and was smaller than the $755 million shortfall predicted in a Reuters poll of economists. Exports climbed 14 percent to $4.2 billion from a year earlier, underpinned by a 24 percent gain in foreign meat sales and a 51 percent jump in fruit exports. Imports were up 4.8 percent to $4.85 billion. On an annual basis, the trade deficit was $2.69 billion, ahead of the forecast $2.66 billion.
New Zealand’s export sector has been weighed on by tumbling global milk prices, which have sapped returns for local producers. Dairy is New Zealand’s biggest commodity export, and international sales of milk powder, butter and cheese edged up 0.1 percent to $932 million in July from a year earlier, for an annual drop of 24 percent. Casein and caseinates sales rose 6.8 percent to $95 million, for a 9.2 percent annual increase.
Exports in the month of July were bolstered by sales of meat and edible offal, the country’s second-biggest export commodity, which rose to $505 million in July from $406 million a year earlier, and were up an annual 15 percent. Fruit exports climbed to $311 million in July from $206 million a year earlier, led by the country’s record kiwifruit crop.
Imports of cars, autoparts and accessories, were down 12 percent in July to $573 million, slowing the annual gain to 5.6 percent. Imported petrol and products sank 27 percent to $513 million in the month, for an annual drop of 22 percent as globally low oil prices hold down fuel costs.
Exports to China, the country’s biggest trading partner, rose 14 percent in July to $695 million, underpinned by sales of frozen beef. Sales to China fell 28 percent on an annual basis as the world’s most populous nation scaled back its purchases of New Zealand dairy products. Imports from China climbed 28 percent to $898 million in July, for a 15 percent annual increase.
Trade with the US increased in July, with exports up 30 percent to $479 million, largely on increased beef sales, and imports rising 8.9 percent to $665 million. On an annual basis, exports to the US climbed 31 percent, and imports gained 20 percent.