New Zealand Unexpectedly Posted Small Trade Surplus in January

Auckland, New Zealand.

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New Zealand unexpectedly posted its first trade surplus in eight months in January, driven by exports outside the troubled dairy industry.

The South Pacific nation had an NZ$8 million ($5.4 million) trade surplus in the first month of 2016, its first since May last year, Statistics New Zealand said in Wellington Friday. Economists expected a NZ$271 million deficit, according to the median of 12 forecasts in a Bloomberg survey.

“The result highlights the strong export performance of non-dairy sectors,” said Nathan Penny, rural economist at ASB Bank in Auckland. “Of the 10 largest export categories, eight recorded higher values over the January 2016 year.”

New Zealand’s income from dairy products, its biggest export, has slumped after prices plunged amid a global milk glut. The impact has been partly offset by rising sales of other goods such as meat, fruit, seafood and wine. Total exports make up about 30 percent of the economy.

The New Zealand dollar rose after today’s report, buying 67.42 U.S. cents at 12:35 p.m. in Wellington from 67.01 cents beforehand.

Still, with the value of dairy exports down 17 percent in the year through January, the country’s annual trade deficit widened to NZ$3.58 billion.

“Despite today’s positive surprise, the overarching themes dominating the external trade environment remain -- ongoing falls in export prices, softer agricultural production and weak oil prices,” said Philip Borkin, senior economist at ANZ Bank in Auckland. “We continue to expect the underlying trend in New Zealand’s trade performance to be one of deterioration.”

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