The trade deficit was $433 million last month, from a surplus of $110m in June and from a deficit of $730m in July 2015, Statistics New Zealand said. The annual trade gap narrowed to $3.03 billion from $3.3b in the 12 months to June 30. A monthly deficit of $350m and an annual gap of $2.98b was expected, based on a Reuters survey.
Falling crude oil prices contributed to a 10% decline in imports to $4.4b in July from a year earlier, accounting for more than one-third of the $503m decline. The drop reflected a decline in global crude oil prices and in the volume imported, Statistics NZ said. Brent crude dropped as low as US$27.88 a barrel in January and had recovered to US$50.35 a barrel by the start of July, down from about US$62 a barrel a year earlier.
Global crude prices also had a bearing on NZ’s dairy exports, with energy export-dependent Algeria recording the biggest decline in shipments of NZ dairy products last month – down 55% by value and 45% by quantity. Algeria is the third-biggest market for NZ milk powder.
Overall NZ milk powder exports fell by 23%, or $118m, last month, while the quantity rose 0.9%, contributing to a 4.9% decline in total exports to $4b. Meat and edible offal exports fell by 19%, or $97m.
“The meat export falls this month are partly due to record meat exports this time last year,” international statistics senior manager Jason Attewell said. “Meat values in July 2015, off the back of a record high meat season, were 31% higher than the average value for the previous five July months.”
Exports of fruit fell 5.7% by value but rose 3.9% by volume last month.
China remained NZ’s largest market in the 12 months ended July 31, taking a total $9.1b, up 3.6% from a year earlier. Exports to Australia fell 1.3% to $8.4b, exports to the US rose 0.2% to $5.6b and to Japan rose 0.9% to $3b. Asia was the biggest regional market, taking $21.8b of NZ’s total $48.6b of exports, up 3.6% in the year.
China was also the largest source of imports, sending $10.5b of goods to NZ in the latest year, up 10%, resulting in a $1.4b bilateral trade deficit for NZ. Australia was second, sending $6.5b of products, up 3.4%, while the US was in third place on $6.1b, down 0.4%.
NZ’s exports of dairy products fell 8% to $11.1b in the latest year, while meat exports rose 0.5% to $6.5b, logs and wood rose 10.4% to $3.9b and fruit jumped 24% to $2.6b.
