New Zealand’s Trade Surplus Widens as Imports Decline

May 27 (Bloomberg) -- New Zealand’s trade surplus widened in April as imports of crude oil and machinery declined, while rising commodity prices and a seasonal increase in farm production kept exports near record levels.

The surplus increased to NZ$656 million ($437 million) from NZ$590 million in March, Statistics New Zealand said today in Wellington. In the year ended April, the nation posted a NZ$161 million trade surplus, the first since July 2002.

Exports, which make up 30 percent of gross domestic product, have been rising as prices of New Zealand’s commodity shipments jumped to an all-time high and demand from nations such as China has been surging. The Chinese economy will grow 11 percent this year and 9.7 percent in 2011, the Organization for Economic Cooperation and Development forecast yesterday.

“There is some evidence of firmer commodity prices feeding through, with dairy and forestry exports leading the increase,” said Mark Smith, an economist at ANZ National Bank Ltd. in Wellington. “We expect this to continue with the weaker New Zealand dollar also to provide support.”

The currency has declined 6.6 percent against the U.S. dollar in the past six months. It bought 66.44 U.S. cents at 11:45 a.m. in Wellington from 66.57 cents immediately before the trade report.

The trade surplus was wider than the NZ$455 million median forecast in a Bloomberg News survey of eight economists. The monthly figures aren’t seasonally adjusted and New Zealand’s exports typically increase between February and May as milk, wool and meat production peaks.

Milk Powder

Exports fell 2.2 percent to NZ$3.97 billion in April from a record NZ$4.06 billion in March, today’s report showed.

Shipments of milk powder, butter and crude oil declined from March, the agency said. Meat and fruit exports rose.

Commodity prices increased 4.9 percent in April from March, according to an index compiled by ANZ National Bank Ltd. New Zealand’s dollar fell 4.9 percent against the U.S. currency in the past three months.

Fonterra Cooperative Group Ltd., the world’s largest dairy exporter, this week raised the price it will pay farmers for milk in the new season beginning June 1, citing higher world prices. Whole milk powder prices were near a 21-month high at an auction in early May, the Auckland-based company said.

Exports to China increased by 44 percent from a year earlier to NZ$460 million in April. China now buys 10 percent of total annual exports and is New Zealand’s second largest customer after Australia.

Navy Ship

Imports declined 4.5 percent from March to NZ$3.31 billion, today’s report showed. The figures included a navy ship that boosted military goods imports by NZ$95 million.

Crude oil imports declined 7.5 percent as a fall in volumes offset rising prices.

From a year earlier, imports fell 0.2 percent while exports gained 9 percent. Stronger demand for New Zealand goods led to the NZ$161 million trade surplus in the 12 months ended April 30 from a NZ$172 million deficit in the year through March. Economists expected the annual shortfall would be NZ$60 million.