Thursday 27 October 2016 12:05 PM
NZ trade deficit widens to a record in September as meat exports fall
By Tina Morrison
Oct. 27 (BusinessDesk) - New Zealand's monthly trade deficit widened to a record in September as meat exports dropped to their lowest level in more than three years.
The country's trade deficit expanded to $1.44 billion in September, from $1.14 billion a year earlier, Statistics New Zealand said.
Exports fell 5.7 percent to $3.47 billion, led by a 35 percent decline in meat and edible offal exports to $281 million, the lowest monthly reading since August 2013. That pushed meat exports down to third place in the monthly rankings, behind wood, although it remains in second place on an annual basis.
Imports advanced 1.8 percent to $4.9 billion, boosted by the importation of aircraft in the month. Excluding aircraft imports from the total, imports fell 0.8 percent to $4.7 billion, the statistics agency said.
The meat export market is retreating from highs reached last year, when beef exports hit a record as a shortage in the US pushed up prices. In the latest monthly data for September, the value of beef exports fell 35 percent from a year earlier amid increased beef supply in the US, while lamb exports sank 39 percent amid subdued demand in the UK. A higher New Zealand dollar is also weighing on exports, making local goods more expensive in international markets, analysts said.
Exports of milk powder, butter and cheese slid 1.2 percent to $616 million, while the quantity rose 16 percent, Statistics NZ said. Milk powder fell 1.9 percent in value while the quantity rose 19 percent, reflecting price declines. Milk fats, including butter, slipped 3.4 percent in value and 4.7 percent in quantity while cheese gained 21 percent in value and 77 percent in quantity.
Fruit, the fourth-largest commodity export, increased 44 percent to $228 million while the quantity advanced 56 percent. Kiwifruit led the rise, with the value up 46 percent and the volume up 58 percent.
Wood exports advanced 17 percent to $347 million while the quantity increased 19 percent, the agency said.
On an annual basis, the country's trade deficit was $3.4 billion, compared with an annual deficit of $3.17 billion in September last year. Annual exports totalled $48.58 billion in the year through September, while imports totalled $51.99 billion, according to the data.