Deficit gets help from dairying

By JIM EAGLES

A healthy increase in the value and volume of dairy exports has held the November trade deficit to not much more than the long-term average.

Leading the growth charge were butter exports, which were more than 90 per cent above the previous November.

Cheddar cheese exports also had a good month, with returns up more than 50 per cent.

Overall returns from dairy products were up 17 per cent on a year ago.

The director of Fonterra's global sales network, John Shaskey, said the figures showed the success of a move to turn the extra output from the peak production months of October and November into cash as quickly as possible.

"Prices were quite firm at the time," he said, "and we had plenty of product so we were quite aggressive in the market."

Shaskey said the results were very pleasing and dairy exports since then had continued to be strong.

"December and January are typically fairly quiet, because the world closes down, but the volumes we've achieved this time have been quite encouraging.

"Prices have held up, too, and have even firmed a little over the past two months."

Statistics New Zealand figures issued yesterday show exports during the month earned $2.4 billion.

That was 3 per cent less than in November 2002, and with imports continuing to flourish it resulted in a $411 million trade deficit for the month.

At 17.3 per cent of exports, that figure was close to the 10 year average for the month of 16.6 per cent.

It was also a big improvement on the October deficit of $731 million, or 32 per cent of exports, and the September deficit of $753 million or 34 per cent of exports.

Statistics NZ said the improvement resulted from a steady improvement in export returns, despite the soaring exchange rate, led by the dairy industry.

As well as butter and cheese, milk powder sales show a big improvement.

Volumes of whole milk powder were up 33 per cent, earning the country an extra $37 million during the month, an improvement of 28 per cent on a year earlier.

Volumes of skim milk powder were up 18 per cent, earning $19 million more than the previous November, an improvement of 24 per cent.

On the other side of the coin the November trade figures showed sharp falls in returns from fish, wool and meat on 12 months ago.

Fish exports fell $34 million or 29 per cent, wool was down $24 million or 29 per cent and meat dropped $17 million or 5.5 per cent.

The sharpest decline was in sales of fish fillets. Sales of fish fillet blocks fell 70 per cent, frozen hoki fillets dropped 37 per cent and frozen orange roughy fillets were 50 per cent lower than a year before.

The numbers

Trade figures for November 2003

* Merchandise exports $2.379 billion

* Down 3pc on November 2002

* Trade deficit $411 million