Annual trade deficit widest in over nine years

Annual trade deficit widest in over nine years

24 August 2018

The annual trade balance for the year ended July 2018 was a deficit of $4.4 billion (7.9 percent of exports), the widest annual deficit since March 2009, Stats NZ said today.

Both imports and exports were up for the July year, but the deficit has widened because imports have risen more.

Annual imports for the year ended July 2018 were $60.7 billion, up $6.9 billion (13 percent) from the year ended July 2017. Annual exports for the year ended July 2018 were $56.2 billion, up $5.7 billion (11 percent) on a year earlier.

“The rise in imports in the past year reflect large rises in both imports of petroleum and products, and in mechanical machinery and equipment. Exports of dairy and meat products led the exports rise,” international statistics manager Tehseen Islam said.

Imports of petroleum and products for the year ended July 2018, were $6.5 billion, up $1.5 billion (30 percent) from the year before, partly reflecting higher international crude oil prices.

For the year ended July 2018, the value of dairy exports increased $1.5 billion (11 percent) to $14.4 billion. Milk fats, including butter, led this rise, up $955 million, and milk powder exports also increased, up $373 million.

July 2018 trade balance

The monthly trade balance was a deficit of $143 million (2.7 percent of exports). In July 2017 there was a surplus of $92 million.

July 2018 imports

For the July 2018 month, imports were up $964 million (21 percent) to $5.5 billion. This is the second highest imports value ever, with the highest being in November 2017.

This monthly increase was driven by petroleum and products (up $337 million or 84 percent), led by crude oil, up $165 million.

“Crude prices are much higher than they were at the same time last year. These price increases have driven an increase in values, as quantities are much the same,” Mr Islam said.

Following the Marsden Point refinery shutdown in May to mid-June Refining NZ reported in 2018 Shutdown all done that “the planned maintenance shutdown at the Marsden Point is now ‘done and dusted’ with all of the refinery’s processing units back to producing fuel products”.

Mechanical machinery and equipment also contributed to the imports rise, up $107 million from July 2017 led by an increase in computer imports.

July 2018 exports

In the July 2018 month, exports rose $729 million (16 percent) to $5.3 billion compared with July 2017.

The export values of dairy products increased by $269 million (21 percent) compared with July 2017, reaching $1.5 billion, the highest value for all months since December 2017. Milk powder (up $136 million) and milk fats including butter (up $116 million) were the main contributors.

The rise in milk powder exports was price driven. In contrast, the rise in milk fats including butter was quantity driven.

Other main contributors to the exports rise were forestry products, and meat and edible offal.

The Government Statistician authorises all statistics and data we publish.

For more information about these statistics:
• Visit Overseas merchandise trade: July 2018
• See CSV files for download

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