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Annual exports to China top $15 billion for first time

Commentary

Annual exports to China jumped 22 per cent in April to top $15 billion for the first time, amid growing demand for beef, lamb, logs and dairy products.

Exports to China now account for about a quarter of New Zealand's international sales. Exports to Australia, its second-largest trading partner rose 0.7 per cent to $9b in the year ended April 30. Exports were $59b in the year through April.

"The strong demand recently from the Chinese market for alternative protein sources, such as New Zealand beef and lamb, is partly due to African swine flu reducing pork production in China," Stats NZ international statistics manager Tehseen Islam said.

The value of beef exports to China nearly doubled in the year ended April, he said. Milk powder was up $501 million at $2.4b, he said.

In April alone, exports to China rose $327m, or 29 per cent, to $1.4b, led by milk powder, beef and lamb.

New Zealand's trade balance was a surplus of $433m in April, versus a revised $824m surplus in March.

Exports rose 12 per cent to $5.5b in April from the same month a year earlier, while imports lifted 7.3 per cent to $5.1b. Economists had been expecting a trade surplus of $375m, according to the median in a Bloomberg poll.

Stats NZ said dairy products led the rise in exports, as sales of milk powder, butter, and cheese products rose 11 per cent, or $124m, to $1.3b. Milk powder exports were up $137m in value, or 25 per cent, at $697m, and were 19 per cent higher in volume terms.

"As we approach the end of the dairy season, we are still seeing high values and quantities of dairy products being exported," Islam said.

On the import side, aircraft and parts led the increase, up $138m at $194m. Stats NZ noted that imports of aircraft and parts are lumpy.

The lift in imports was offset by a fall in motor vehicles, down $184m. This decrease was from an unusually high level in April 2018 when two additional vehicle carriers were unloaded, after earlier shipment delays due to the discovery of stink bugs on ships in February 2018, Stats NZ said.

Imports from China were up 19 per cent to $963m in April. In the 12 months to April 30, imports from China were up 15.6 per cent to $12.9b. Total imports in the year to the end of April were $64.4b.

The annual trade deficit was $5.48b, in line with expectations.

This article was published by the NZ Herald.