Trade gap narrows in November on drop in car, ship imports

Wednesday 7th January 2009

New Zealand's trade deficit unexpectedly narrowed in November as imports of cars slumped and exports of milk, logs and meat rose.

The monthly trade gap shrank to NZ$520 million from a deficit of NZ$942 million in the previous month, according to Statistics New Zealand. Economists had predicted a deficit of NZ$838 million, according to a Reuters survey.

The annual trade gap fell to NZ$5.16 billion from NZ$5.2 billion, versus a forecast NZ$5.5 billion. Annual exports to Australia, the nation's biggest market, exceeded NZ$10 billion for the first time, mainly reflecting an increase in the value of crude oil shipments.

Imports of motor vehicles fell 52% in the latest month to the lowest for the month of November since 1997 as a prolonged recession and tighter credit criteria sapped demand for new cars. Exports of dairy products, the nation's biggest, rose 10% to NZ$1 billion, meat shipments gained 18% to NZ$342 million and timber climbed 40% to NZ$235 million.

Crude oil exports slipped 60% to NZ$97 million as volumes fell. Statistics New Zealand said the timing of oil shipments is irregular, which can cause large fluctuations in the monthly figures.

The value of milk exports may slide as price fall amid the worldwide economic slump. Milk powder prices plummeted 9.3% in yesterday's online auction by Fonterra Cooperative Group, the world's largest exporter of dairy products.

The prices of other raw materials have been firming in the New Year, with the Reuters/Jeffries CRD Index, a measure of 19 different raw materials, increasing 2.3% yesterday.

By Jonathan Underhill

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