There has been a substantial improvement in the country's trade balance in January.
Exports rose by $729 mln - or 22% - compared with the same month a year ago. They were $4.076 billion in the January 2014.
Most of that increase was for milk powder, butter and cheese, and most of that went to China.
In fact, of our five top export destinations, only exports to China grew - they declined to the other four big markets, Australia, the United States, japan, and Korea.
The fall away of Australia as our top export destination has been dramatic - we now sell twice as much to China as the lucky country.
More than half of all our exports (53.5%) now go to China.
And our trade surplus is growing even as our currency is strong.
Import growth in January from the same month a year ago was more modest, up only 3.5% to $3.77 billion. Most of that increase is accounted for by purchases of new vehicles.
The result was a trade surplus of $306 million in the month, building on the $909 million trade surplus for the past three months, and a $312 million trade surplus for the year to January. That is a big turnaround from the $288 trade deficit in calendar 2013.
Imports of capital goods are driving what we buy.
Machinery and plant rose $50 million, led by well-sinking and boring machinery. Mechanical shovels, mobile telephones, and tractors also contributed to this increase. Transport equipment rose $43 million, led by goods transport vehicles and railway coaches.
Intermediate goods showed a little increase, up only $7.0 million. This was led by processed fuels and lubricants, and partly offset by primary industrial supplies and crude oil.
The import of consumption goods actually fell $12 million due to non-durable consumer goods (such as clothing).
Trade balance, monthly
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17 Comments
Yeah so it's not really a case of big drops in exports to everywhere other than china, but the effect on our currency of china's surging demand. China exports growing so fast, even the appreciating exchange rate can't stop export values to china climbing, but the static/mildly increasing demand to everywhere else coupled with high NZD means you get a drop off in export NZD$ terms to those countries.
I don't think we should be worried. We should be prudent with whats happening and not extend the trend line and do future number crunching assuming this will continue indefinately. The money from this needs to go to R&D where NZ significantly underinvest. This will build more diversity.
For the year ended June 2013:
Share of Chinese import in the World market Share of Chinese import in the NZ market Beef 3.5% 8.0% Sheepmeat 17.0% 20.8% Whole milk powder 23.5% 37.2% Skim milk powder 9.7% 23.9% Butter 5.6% 8.7% Retail infant formula 19.2% 35.2% Logs 51.4% 70.1% Timber 20.8% 21.7%
I'd say the perception of NZ's export being not-very-diversified market-wise is simply because that the world market is becoming less and less diversified.
Enjoy.
This is a commodity play. Its dangerous and around the world milk powder sales to China are booming. In the EU they worry that the spring flush is going to overwhelm driers
Fron Cailfornia milk producers.
Competitors overseas have enjoyed nearly ideal conditions and are outpacing American milk production growth. A mild winter in Europe and green pastures in New Zealand have allowed for stunning increases in milk output. December production in the EU-28 was up 4.6% from the prior year. Season-to-date production in New Zealand is up 5.4% from the 2012-13 season, and USDA expects full season production to exceed last year by 7 to 9%. Much of this excess milk will be dried. Among all dairy products in New Zealand, milk powders have the highest margin. European processors are worried that the spring flush will overwhelm drying capacity. Milk powder production is formidable, the limit up moves in NDM futures are particularly impressive. Prices indicate that supply growth has not been able to overwhelm pent-up demand for milk powders. When it goes bust we are going to be very exposed to some very cold winds. One thing we know from the financial crisis in the USA is that experts are very poor when it comes to predicting future events. Lets not even start on Iraq, weapons of mass destruction and elaborate tunnels in Afghan mountains harbouring advanced weapon systems. The question we should be asking is, whats the fall back position if China stops buying? This now needs to include Beef, Lamb, Pelts and Wool. Mr Fekete Antal Fekete: As money flows from the commodity market to the bond market, commodity prices fall along with interest rates (because bond prices rise). Under a gold standard this process would be stopped sooner or later as commodity prices cannot fall to zero. Under our global fiat money experiment, however, the central bank is compulsively halving interest rates again and again, unwittingly causing further price declines in the commodity market. There is a vicious downward spiral in operation: falling commodity prices chase interest rates lower, and falling interest rates chase commodity prices lower. It is crazy. It is unbelievably stupid, but there it is. The central bank in blind faith in the Quantity Theory of Money is destroying the economy. Everybody is expecting hyperinflation, but what we are getting is hyperdeflation. http://www.professorfekete.com/articles/AEFThirdDailyBellInterviewRev11…"Under a gold standard this process would be stopped sooner
or later as commodity prices cannot fall to zero."
Huh? in the real world there is a cost of extrcation....ergo a commodity cant fall to zero, ever....its cost someone something, somewhere.
On top of that look at commodity prices, they are rising....
regards
Paul Buchanan was talking about what Edward Snowden will reveal about spying upon China and that we need to have a prepared plan of response. he says that China does things like hold up product on the wharves. Imagine if we decided to curb immigration to New China?
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