2010.07.2901:36:00UTC+00N.Z. Trade Surplus Falls To NZ$276 Million

New Zealand recorded a smaller trade surplus for June compared to May, official data showed on Thursday. The decline came mainly due to a fall in export value and a small rise in imports.

Statistics New Zealand said a trade surplus of NZ$276 million was recorded in June compared to the NZ$768 million surplus in the previous month. This marks the sixth consecutive monthly trade surplus and the first June month surplus since 2002. Exports value totaled NZ$3.8 billion in June, up 17.1% from the same month of the previous year, but smaller than the NZ$4.2 billion logged in May. Imports, on the other hand, amounted to NZ$3.5 billion in June, down 1.6% from a year ago, but up from NZ$3.4 billion in May.

The annual rise in exports was largely due to a jump in milk powder, butter & cheese exports, which rose 44%, led by an increase in unsweetened whole milk powder. Exports of logs, wood & wood articles, and ships, boats, & floating structures also recorded large increases during June.

The statistical agency said the yearly fall in imports was mainly due the one-off import of aircraft valued at NZ$571 million in June last year, without which imports would have risen 17%. Electrical machinery & equipment imports also decreased. Petroleum & petroleum products logged the largest increase.

"Seasonally adjusted export values are now similar to the record level recorded in late 2008, whereas import values are still well below their 2008 high," Statistics NZ's Neil Kelly said. "The high export values coincide with record values for dairy exports."

By country of destination, exports to Australia rose 22% led by higher commodity exports. Exports to Japan and China were also up, while the largest decrease in exports was to Spain, down 70%.

On the import side, the most significant decrease in imports was from France, down 93%. Imports from the U.S. also slumped, while the largest increase in imports during April was from Singapore.

Exports for the June quarter amounted to NZ$11.2 billion, up 6.8% from the corresponding period of the prior year. Imports in the same period were worth NZ$10.8 billion or up 5.8% from a year ago. The trade balance was a surplus of NZ$389 million.

A rebound in global commodity prices aided the revival of New Zealand's export industry. However, ANZ Bank estimates showed that commodity prices in the country decreased in June, falling 1.2% month-on-month. Dairy prices slipped 3.1% and aluminium was down 6%. Prices of apples, beef, log, sawn timber and kiwi fruit all fell.

Earlier today, the Reserve Bank of New Zealand decided to raise its official cash rate by 25 basis points to 3.00% , citing inflationary pressures. Bank governor Alan Bollard said in a statement that while "the outlook for economic growth has softened somewhat, it is still appropriate to continue to reduce the extraordinary level of support implemented."

New Zealand emerged from a five-quarter long recession in the second quarter of 2009 but growth has been relatively subdued, due in part to the strong New Zealand dollar. The economy is largely dependent on agriculture, but manufacturing and tourism are also important.

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