Exports leapt higher in September, led by a strong recovery
in dairy exports following trade disruptions in August caused
by the Fonterra contamination scandal.
Statistics New Zealand figures released on Thursday show the
September trade balance was a deficit of $200 million
compared to market expectations of a $680 million deficit.
The annual trade balance was a deficit of $1.2 billion.
ASB economist Jane Turner said looking beyond trade
disruptions, dairy exports were strong.
The trade disruptions saw seasonally adjusted export volumes
fall 9% in August, but exports surged 22% in September.
Third-quarter dairy exports increased 20% in value on the
previous quarter. With reports of a strong start to the
season, and elevated global prices, the outlook for dairy
exports was encouraging, she said.
Also contributing to a quarterly export performance was an
increase in forestry exports, up 23%, and meat exports, up
Manufactured exports also performed well in the quarter but
weakened in September, she said.
Third-quarter imports lifted strongly, led mainly by a surge
in capital goods which were boosted by the one-off import of
an oil-drilling platform in August and helicopter imports in
July. Consumer imports rose 4% in the quarter, an indication
domestic demand remained firm.
Ms Turner said the strong rebound in dairy exports
highlighted the strong fundamentals for the sector in the
coming season. ASB expected dairy incomes would increase by
more than $4 billion in the coming season.
She warned that although trade disruptions of the Fonterra
whey contamination scandal were short-lived, the reputation
effects could be longer-lasting.
Strong dairy exports should lead an improvement in the trade
balance this year, but an increase in imports as the economy
continued to improve would limit that.