For the year ended March, the value of goods exports to Australia ($8.7 billion) surpassed those to China ($8.6 billion), largely due to declining dairy prices, according to Statistics New Zealand data on overseas merchandise trade released yesterday.
For the month of March, exports were $4.92 billion and imports $4.29 billion, a trade surplus of $631 million.
For the past five months, exports to China and Australia had fallen compared with March last year. The decline in exports to China was larger than the decline to Australia, SNZ international statistics manager Jason Attewell said.
Yesterday, the average predictions of four major banks had the kiwi sitting around A98c through to the end of 2015, then falling to A96c by December 2016, and a year later at A88c.
On top of declining export volumes, and depending on a business' natural hedge position, or hedging contracts, the kiwi's near parity with its Australian counterpart has in the past 18 months meant revenue declines of 10% to 15% for some export companies.
The $631 million surplus was padded out by the $200 million re export of a drilling platform, but even when reduced to $432 million, that figure was more than 25% ahead of economists' expectations of a $341 million surplus.
ASB economist Nick Tuffley noted the $631 million trade surplus was the third surplus in a row.
''While the headline trade balance was in line with our expectations, export and import values were higher than expected,'' Mr Tuffley said.
Most of the stronger export result was due to higher than expected dairy export volumes, he said.
Export volumes spiked nearly 17% during March; and with a 2% lift in dairy prices, overall dairy export values spiked 19%, Mr Tuffley said.
Import values lifted 2% during March, with the price paid for oil landed during March 18% higher than in February, and volumes were also firmer.
''Much of this strength owed to a rebound in petroleum import values as oil prices lifted over the month,'' Mr Tuffley said.
Exports to China fell 23% for the year to March, much of that reflecting the 12.5% plunge in milk powder, butter and cheese exports during the same period.
Westpac economist Michael Gordon said that on an annual basis, the trade balance slipped further to a $2.4 billion deficit, the largest deficit since mid 2009.
He said the importing of consumption goods and passenger cars continued to accelerate, up on last year 19% and 15% respectively, which underscored the strength in consumer spending that had been seen so far this year.
While it was the first time Australia has been our top export destination since November 2013, analysts are already predicting the rise in dairying will see China retake top spot later in the year.
Mr Tuffley said ''We expect China to regain its top dog status, probably some time later in the year, particularly as dairy export prices come off their current lows and the Chinese economy regains strength.''
