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Susan Kilsby, agriculture economist at ANZ, notes that the New Zealand’s trade balance for January was considerably weaker than expected with exports below expectations and imports considerably stronger.

Key Quotes

“The unadjusted monthly trade balance turned a large deficit of $914m in January.”

“Exports at just $4.4bn were below expectations with the slow start to the meat processing season primarily to blame. Imports were strong, partially due to a $200m large item, but the overall import strength indicates domestic demand remains robust.”

“On a seasonally adjusted basis, exports decreased 7.8% m/m. Dairy volumes lifted, but the recent uptick in dairy prices is yet to be reflected in export values.”

“Seasonally adjusted imports rose 0.4% m/m. Petrol imports dropped by 6.1% following a strong lift the previous month.”

“The annual deficit is expected to narrow as the year progresses reflecting stronger export volumes of meat, dairy and forestry, while the improvement in prices for dairy should start to flow through in the coming months.”