New Zealand's trade balance between exports and imports has
delivered a surprise $305 million deficit, with analysts
prompted to raise concerns about the effects of the pending
The reported trade merchandise deficit in January of $305
million was well adrift of the $100 million to $125 million
surplus expected by the market and was driven mainly by a
decline in dairy and oil exports during the month.
ASB senior economist Jane Turner cautioned that dry weather
expected in coming months would weigh heavily on dairy
exports; BNZ chief economist Craig Ebert similarly expected a
negative ''drag'' on dairying to be reflected in
first-quarter gross domestic product data.
Ms Turner said in averaging through, the trend in the trade
balance during late 2012 to early 2013 appears to be one of
gradual recovery led by exports.
''However, the recent lift in exports may not be sustained.
Dry weather conditions will weigh on dairy exports over
coming months,'' Ms Turner said.
Mr Ebert said Fonterra's decision yesterday to hold its milk
price payout forecast unchanged at $5.50 per kg of milk
solids was ''a touch disappointing'', given strong global
prices since December.
''What's obvious is that the North Island dry spell is
hurting production,'' he said.
Following a good first half of the season, Fonterra expects
total season production to be up 1%, which highlights the
negative effects of the dry North Island.
''The North Island dry will impart a big drag on
first-quarter GDP,'' he said.
Exports v imports in January
• The value of exported goods fell $378 million, or 10%, to
$3.3 billion, led by declining values of milk powder, butter
and cheese, and crude oil.
• The value of imported goods fell $234 million, or 6%, to
$3.7 billion, large capital item imports (in transport)
having affected this movement.
SOURCE: STATISTICS NEW ZEALAND