Figures released yesterday by Statistics New Zealand showed another changing of the guard in regard to markets.
For the June quarter, New Zealand reported a seasonally adjusted trade deficit of $669 million. Exports fell 4.7% and imports increased 1%.
Australia regained its position as the top export destination for New Zealand in the second quarter with $2.3 billion of New Zealand goods exported to Australia in the three months compared with $2 billion of New Zealand goods exported to China.
However, the value of goods exported to Australia fell 8.3% over the year to the end of June in contrast to the 19% increase in the value of goods exported to China in the same period.
ASB economist Christina Leung said there was uncertainty over the growth outlook of both Australia and China but she expected the growing middle class in China would underpin continued strong demand for New Zealand's commodity food exports.
Exports increased 13.5% for the June month. The increase was driven by a rebound in meat exports with volumes increasing 24% in the month. Meat exports in China were delayed early this year due to certification issues which were only resolved at the end of May.
Ms Leung said the rebound in meat exports probably reflected the clearing of the backlog.
There had been a second hold-up in China in recent weeks. Along with the recent fall in livestock slaughter, she expected meat export volumes would ease in coming months.
Dairy exports fell 4.2% in June, with the fall in volumes only partially offset by the increase in prices.
''Milk production has declined as farmers dry off their herds early in the wake of the drought earlier this year. We expect the continued effects of the drought will weigh on dairy export volumes over the coming months.''
Forestry exports continued to recover in June on both volume and prices, Ms Leung said. The Canterbury rebuild, along with the recovery in demand for housing construction in the United States, was expected to support global forestry prices in the coming year.
Imports fell 0.3% in June with a fall in imports of consumption and intermediate goods.
Trade balance
• Stronger-than-expected June surplus of $414 million
• Meat exports drive increase
• Australia regains largest market status
• Value of exports to China rises substantially
