KEY POINTS:
New Zealand had a trade deficit of $524 million in June, twice as bad as expected, figures from Statistics New Zealand today show.
The median forecast of economists in a Reuters poll had been for a deficit of $269 million.
For the year to June the deficit was $6.23 billion, compared to the $5.95 billion forecast.
Imports in June were worth $3.28 billion, slightly down on the $3.3 billion expected.
Exports were worth $2.75 billion, compared to forecasts for $3.01 billion.
Between them, the meat and edible offal group and the milk powder, butter and cheese group accounted for almost two-thirds of the decrease, SNZ said.
A $56 million drop in the value of frozen beef exports and a $37 million drop in the value of milk powder exports contributed most to the decreases.
The $3.28 billion of imports was up 3.5 per cent on June last year to the highest value recorded for a June month, with the importing of the naval vessel Canterbury a main contributor.
Overall, imports in the ships, boats and floating structures group were up $165 million.
Petroleum and products imports also increased, up $70 million, with a $39 million increase in automotive diesel contributing most to the rise, partly offset by a $19 million fall in crude oil imports.
For the June quarter, the seasonally adjusted value of merchandise exports dropped 3.8 per cent, or $331 million, following an increase of 0.9 per cent in the March quarter.
For the quarter meat and edible offal exports were down 8 per cent, with frozen been and lamb particularly making an impact.
Milk powder, butter and cheese exports were down 3.5 per cent for the quarter.
The seasonally adjusted value of imports, excluding one-off items valued at $100 million or more, fell 1.7 per cent, or $177 million, in the June quarter, following 10 consecutive quarterly rises, SNZ said.
The seasonally adjusted fall in imports for the quarter was led by intermediate goods, which were down 5.5 per cent.
Consumption good imports were down 6.3 per cent in the quarter and transport equipment down 24.4 per cent.
Deutsche Bank chief economist Darren Gibbs said the bottom line was that clearly the export sector was under pressure from the high currency.
"With dairy we haven't seen the impact there of higher prices, but this stuff's all pretty volatile, no doubt that'll pick up over the coming months."
ANZ-National Bank senior economist Khoon Goh had a similar opinion, saying he guessed the export weakness was due to high dairy prices not really feeding through into the exports numbers yet.
"It could also be a reflection of the fact that the high currency is really putting a strain on the other parts of the export sector," he said.
"If these numbers keep printing this way any improvement in our trade balance is still a long way off despite strong dairy prices."
- NZPA
