Trade deficit beats forecasts

Falling beef and lamb exports - including a 50% decline in US beef exports - undermined New Zealand's trade balance, resulting in an unexpected $705million deficit for November.

The November trade deficit was the fifth in a row.

Total November exports were $3.855billion, while imports were worth $4.560billion.

Statistics New Zealand senior manager Jason Attewell said the amount of meat sold dropped heavily compared with last year's record season.

ASB rural economist Nathan Penny had picked a $400million deficit, the market $500million, but it came in ''slightly weaker'' than expected, at $705million.

''In particular, dairy export prices didn't rise as much as we anticipated and export values were largely flat versus our expectations of a 12% rise,'' Mr Penny said.

He predicted the underlying trade balance to lift going into 2017, reflecting rising dairy prices.

Mr Attewell said meat and edible offal exports fell by $158million, or 31% from November last year, contributing to a $219million, or 5.4% fall in overall exports.

''Beef exports to the United States, our top beef export destination, fell by around half when compared to November last year,'' he said.

Lamb exports to the European Union, New Zealand's top lamb destination, fell in November. The United Kingdom trade fell significantly in value and quantity, he said.

After removing seasonal effects and irregular movements, meat exports had fallen 31% from their peak in September last year.

''The fall was mainly due to lower quantities, but lower prices also contributed,'' Mr Attewell said.

simon.hartley@odt.co.nz

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