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New Zealand Annual Trade Deficit Widens to Most Since 2009

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Jan. 10 (Bloomberg) -- New Zealand’s annual trade deficit swelled to the widest in more than three years in November as imports rose to a four-year high and a rising currency curbed returns from exports.

Imports exceeded exports by NZ$1.46 billion ($1.2 billion) in the 12 months ended Nov. 30, compared with a revised NZ$1.33 billion shortfall in the year through October, Statistics New Zealand said today in Wellington. Exports fell 2.1 percent from the year ended Nov. 30, 2011, while imports rose 1.7 percent.

New Zealand ended two years of annual trade surpluses in April, and deficits are widening as slowing demand in global markets curbs prices for dairy products, which make up a quarter of all overseas shipments. The New Zealand dollar’s 5.7 percent gain in the past 12 months compounds weaker returns for farmers and exporters while reconstruction of earthquake-damaged Christchurch city may fan demand for imported building materials and other goods.

“The high New Zealand dollar, import requirements from the rebuild and volatile global scene illustrate the direction of risk, with a further widening of the deficit on the cards,” Mark Smith, senior economist at ANZ Bank New Zealand Ltd. in Wellington, said in an e-mailed note.

The local currency was little changed after the report, buying 83.99 U.S. cents at 1:05 p.m. in Wellington.

Weaker Commodities

Prices for the nation’s commodity exports fell 5.2 percent in December from a year earlier, according to an index from ANZ Bank released today. The annual decline is narrowing amid a 7.5 percent recovery in prices from the 28-month low reached in July.

The annual trade deficit was near the NZ$1.45 billion median estimate in a Bloomberg News survey of seven economists. It was the biggest gap since the 12 months ended Sept. 30, 2009.

New Zealand had a monthly trade deficit of NZ$700 million, near the NZ$698 million shortfall predicted by economists and wider than the NZ$577 million gap in November 2011, today’s report showed.

Exports rose to a four-month high of NZ$3.81 billion in November, led by dairy products as prices recover and the seasonal resumption in milking boosts shipments. Economists predicted NZ$3.53 billion.

Oil Shipments

Still, exports fell 2.4 percent from a year earlier, with dairy sales 10 percent lower while crude oil and fruit also declined, the figures showed. Aluminum, meat and lumber exports increased.

Imports were little changed in November from a year earlier at NZ$4.51 billion, the most since October 2008. Economists predicted NZ$4.23 billion.

Excluding the one-time purchase of aircraft in November 2011, imports would have risen 5.9 percent, the statistics agency said.

Petroleum imports rose 46 percent from the year earlier month. The statistics agency said it received late information which may result in revisions to the petroleum imports figures, and advised to treat that data with caution.

To contact the reporter on this story: Tracy Withers in Wellington at twithers@bloomberg.net

To contact the editor responsible for this story: Stephanie Phang at sphang@bloomberg.net

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