Growth in exports to China drives NZ trade surplus

Chinese demand for logs, milk powder and meat has widened New Zealand's surplus. Photo / APN

New Zealand's trade surplus widened last month, driven by Chinese demand for milk powder, logs and sheepmeat.

Exports exceeded imports by $818 million or 22 per cent in February, pushing the annual trade surplus to $649 million, from $264 million a month ago.

In the year ended February, exports at $49.4 billion were $3.5 billion or 7.6 per cent higher than in the previous year. The increase is entirely explained by 26 per cent increases in exports of both dairy products and logs, and by a 53 per cent increase in exports to China.

New Zealand's trade with China was $2.6 billion in surplus over the past year.

The increase in exports to China offset declines in exports to the next three largest destination countries, Australia, the United States and Japan, though exports to the European Union rose 6.8 per cent to $4.8 billion.

Concentration risk has increased over the past year. The top three export commodities - dairy products, meat and forest products - comprised 48.3 per cent of all goods exports, up from 43 per cent the year before.

The largest five export destinations' share of exports rose to 57.9 per cent from 56.5 per cent the year before.