New Zealand Annual Trade Gap Unexpectedly Narrowed


New Zealand's annual trade deficit unexpectedly narrowed in September as exports rose for the first time in five months buoyed by higher commodity prices and production from a new oil field.

The trade shortfall narrowed to NZ$6.26 billion ($4.80 billion) in the 12 months ended Sept. 30 from NZ$6.34 billion in August, Statistics New Zealand said today in Wellington.

Rising exports, which make up 30 percent of the economy, may buoy economic growth as the central bank uses record-high interest rates to curb domestic spending. Prices of milk powder, butter and other commodities surged 36 percent from a year earlier, adding to the value of overseas sales.

Exports gained 6.4 percent from a year earlier to NZ$3.01 billion. Economists expected exports would fall to NZ$2.8 billion.

Sales of milk powder, butter and cheese, which make up almost one-fifth of overseas shipments, rose 5.7 percent from a year earlier, the agency said. Exports of logs and beverages, also increased. Sales of meat, fish and wool dropped.

Exports of petroleum and associated products surged 34 percent as crude from the Tui oil field, which began producing in August, was sent to Australia, Thailand and Singapore, the agency said.

Commodity Prices

Prices of commodities that make up 70 percent of total overseas sales have been rising in global markets, led by demand for dairy products. The international price of New Zealand commodity exports rose 0.4 percent in September to a record, according to an index compiled by ANZ National Bank Ltd.

Imports gained 2.9 percent in September from a year earlier to NZ$3.55 billion. Economists forecast a 2.8 percent decline.

Purchases of iron and steel articles, and fertilizers increased from a year earlier, the agency said. Imports of petroleum, optical, medical and measuring equipment, and organic chemicals fell.

Analysts prefer to watch a rolling, 12-month trade deficit or compare with a year earlier because the monthly trade figures are volatile and aren't seasonally adjusted.

The September trade deficit was NZ$544 million compared with NZ$625 million a year earlier. Economists expected a NZ$700 million shortfall.

 


Bloomberg
10/28/2007 3:48:36 PM