New Zealand's Trade Surplus Fueled by Strong Steel and Dairy Exports, Despite Challenges in the Chinese Market
Source: The DairyNews
According to Statistics New Zealand, in June, there was a trade surplus of $8.8 million due to a $1.1 billion decrease in imported goods and a 1.3% improvement in exports valued at $1.6 billion. Milk powder, butter, and cheese exports notably increased by $170 million, reaching $1.8 billion, contributing to the overall export growth. On the other hand, petroleum product imports saw a significant decline of $374 million, and iron and machinery imports were down by $94 million compared to the previous year.
Over the past year, goods exports reached $72.8 billion, showing a substantial increase of $5.5 billion from the previous year. However, the annual trade deficit for the year ending in June was $16 billion, marking a $5 billion rise from the prior year. The quarterly seasonally adjusted trade balance remained a deficit of $2.7 billion.
While strong steel and dairy product exports have driven the trade surplus, economists have pointed out that exporters face a long-term challenge due to lackadaisical demand in China. Monthly data tends to be volatile, but three significant trends include stagnation in China and concerns about a potential property bubble burst, resulting in consumer pessimism and frugality. In China, dairy products are viewed as discretionary or luxury items, making them vulnerable to shifts in consumer behavior.
