New Zealand posted a merchandise trade deficit of NZ$963 million in October, Statistics New Zealand said on Thursday – representing 25 percent of exports.
The headline figure exceeded expectations for a shortfall of NZ$1.00 billion and was up from the NZ$1.222 billion deficit in September.
Exports slipped 4.5 percent on year to NZ$3.83 billion – shy of forecasts for NZ$4.00 billion but up from NZ$3.69 billion in the previous month.
Imports fell an annual 2.2 percent to NZ$4.79 billion versus expectations for NZ$4.97 billion and down from NZ$4.91 billion a month earlier.
Milk powder, butter, and cheese led the fall, down NZ$202 million from October 2014. Goods imports fell NZ$109 million (2.2 percent), led by falls in petrol and avgas, and capital goods.
Goods exports to China climbed NZ$57 million (9.2 percent), to move China ahead of Australia as the top annual export destination. The rise in exports to China this month was led by beef, milk powder, and kiwifruit. Goods exports to Australia fell NZ$66 million (down 8.0 percent), driven by crude oil which fell NZ$60 million.
The rise and fall of dairy exports has been driven by demand from China, and is reflected in total exports to China. China became the top export destination in November 2013, but fell below Australia from March to September 2015.
However, China is now both the top export destination for goods, and the top source of imports. Although milk powder exported to China fell 65 percent for the year ended October 2015, it is still the largest commodity. Smaller exports such as beef and fruit have doubled in value in the past year.
“Since annual exports to China fell from their peak in 2014, exports to China and Australia have been around $8.4 billion each,” international statistics senior manager Jason Attewell said. “Annual exports to Australia peaked in January 2012 but have been generally falling since, due to lower crude oil exports.”
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