New Zealand April trade balance surged on boost in exports in fruit and timber products amid fall in dairy prices, which was more than offset by rise in the former sector.
“At USD 292 million, NZ’s headline (unadjusted) monthly trade surplus was above expectations of USD 25 million in April and is almost entirely due to stronger export values,” said Philip Borkin, senior Economist , ANZ.
Exports exceeded imports by USD 292 million last month. Exports rose 4 pct to USD 4.3 billion, led by fruit such as golden kiwi fruit and apples, and higher prices for logs. Imports rose a smaller 1.5 pct to USD 4 billion, due to a rise in clothing, drugs and furniture, official figures showed. Meanwhile, on an annual basis, the deficit narrowed slightly to USD 3.7 billion.
China remained the major trade partner to the commodity country, followed by Australia.
“Dairy prices look like they have found a floor at the moment, but when we look across the non-dairy components there is still some modest falls occurring in the likes of land prices and a few other components as well,” Borkin commented.
However, the consensus was for the deficit to worsen, triggered by continuous fall in prices of exports. However, ANZ economist infers that fall in prices combined with the resilient New Zealand dollar shall remain a concern for the economy in the near term.