NZ trade deficit hits record for August as fuel costs bite

New Zealand had a trade deficit of $1.5 billion in August. Photo/123RF.

Higher fuel costs helped propel New Zealand imports to near record levels in August, contributing to the largest ever monthly goods trade deficit.

The country had a $1.5 billion trade deficit in August, bigger than the $1 billion average August monthly deficit during the past five years and the highest ever recorded, Stats NZ said. Economists surveyed by Bloomberg had expected a deficit of $925 million. The New Zealand dollar dropped as low as 66.33 US cents after the data was released, from 66.43 cents immediately prior. It was recently trading at 66.39 cents.

Monthly imports rose 14 per cent to $5.5 billion, the third-highest total on record, outpacing a 9.9 per cent lift in exports to $4.1 billion, the statistics agency said.

"This month's rise in imports to near record levels occurs at the time of year when exports are typically at a low point," international statistics manager Tehseen Islam said. "The high values for total monthly imports in the last four months helped push the annual trade deficit to a nine-year high."

The leading contributor to the monthly rise in imports was petroleum and products, up 50 per cent, or $186 million, to $563 million. The increase was led by crude oil, up $98 million, and diesel, up $73 million.

Stats NZ noted imports of crude oil and other petroleum products tend to fluctuate from month to month. The quantity of crude oil imported in August this year fell 13 per cent from August last year, but prices rose by about 60 per cent. The latest unit price for crude oil remains 31 per cent lower than the most-recent series peak in May 2012, it said.

Imports of vehicles, parts, and accessories also rose in August, up $55 million. Imports of buses, cars, and trucks all had similar contributions to this rise.

Meanwhile, the leading contributor to the rise in exports was meat products and edible offal, up 43 per cent, or $137 million, to $457 million. The increase was led by sheep meat, up $83 million or 55 per cent, and beef, up $45 million or 31 per cent.

"New Zealand is exporting more beef and lamb, and getting better prices too," Islam said.

Dairy products, the country's biggest commodity export group, increased by 17 per cent, or $80 million, to $540 million, led by an increase in butter and other milk fats, up $63 million.

Forestry products rose 18 per cent, or $74 million, to $477 million, led by a rise in untreated logs, up $58 million.

The high values for monthly imports during the past four months helped push the deficit in the year to the end of August to a nine-year high of $4.8 billion, Stats NZ said. That compares with a $3.1 billion deficit a year earlier and economist expectations for a $4.6 billion annual deficit.

Annual imports increased 14 per cent to $61.4 billion, while exports rose 11 per cent to $56.6 billion.

- BusinessDesk