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Overseas Merchandise Trade: July 2016
Embargoed until 10:45am  –  24 August 2016
Commentary

This commentary refers to trade in goods only.

See Goods and Services Trade by Country: Year ended March 2016 for information on trade in goods and services.

All comparisons are between July 2016 and July 2015, unless otherwise stated.

Exports fall 4.9 percent

In July 2016, goods exports were valued at $4.0 billion, down $205 million (4.9 percent).

Meat and edible offal lead fall in exports

Meat and edible offal (New Zealand’s second-largest export commodity group) had the largest fall in July 2016, down $97 million (19 percent). Lamb led the fall (down $65 million or 29 percent) – quantity was down 25 percent. Beef fell $33 million (15 percent) – quantity exported was down 2.8 percent.

The top destination (ranked by annual exports) for New Zealand beef is the United States of America, while the top destination for lamb is the European Union. Beef exports to the USA fell $25 million (23 percent) in July 2016 – the quantity was down 11 percent. Lamb to the EU fell $16 million (19 percent) – the quantity exported was down 7.1 percent.

Meat and edible offal values were at a record high in early 2015, with July 2015 being 31 percent higher in value than the average of the previous five July months.

Milk powder, butter, and cheese (the largest export commodity group) fell $88 million (9.5 percent) in July 2016. The movements within this commodity group included:

  • milk powder, which fell $118 million (23 percent). The fall was price driven as the quantity exported rose 0.9 percent.
  • milk fats (including butter), which rose $13 million (7.2 percent). The quantity exported rose 28 percent. 
  • natural milk consistent products, which rose $8.1 million (14 percent). The quantity exported was up 64 percent.
  • cheese and curd, which rose $1.9 million (1.4 percent). The quantity exported was up 20 percent.

The large fall in milk powder exports this month was led by a fall in value to Algeria, down $49 million (55 percent). The quantity exported to Algeria was down 45 percent. Algeria is our third-largest destination for milk powder exports (ranked by annual exports) behind China (the largest) and the United Arab Emirates.

Logs, wood, and wood articles had the largest rise in July 2016, up $57 million (19 percent). The rise was led by rough wood (logs in their natural felled state). Treated logs rose $23 million (to $30 million) and untreated logs rose $25 million (to $178 million). In July 2016, log exports made up 59 percent of the total export value of the wider logs, wood, and wood articles commodity group.

Other key changes in export commodities were:

  • ships, boats, and floating structures, up $52 million to $60 million, due to the export of a tanker and a sailboat
  • preparations of cereals, flours, and starch, up $37 million (47 percent), led by food preparations for infant use
  • wool, down $27 million (40 percent) with quantity exported down 33 percent
  • crude oil, down $27 million (34 percent) with quantity exported down 6.5 percent
  • fruit, down $17 million (5.7 percent) with quantity exported up 3.9 percent.

Exports to Australia rise while exports to other top destinations fall

Of our top export destinations, Australia was the only one with a rise in value in July 2016. The actual movements for July 2016, for our top export destinations (ranked by total annual goods exports), were:

  1. China – down $30 million (4.3 percent), led by falls in meat and edible offal (down $32 million), milk powder (down $24 million), and wool (down $23 million). Logs, wood, and wood articles rose $38 million (34 percent). A rise in rough wood (up $41 million) was partly offset by a fall in sawn wood (down $3.5 million).
  2. Australia – up $37 million (5.2 percent), led by rises in food preparations for infant use (up $24 million); ships, boats, and floating structures (up $19 million); and aircraft and parts thereof (up $16 million). Exports of precious metals, jewellery, and coins fell $17 million (24 percent).
  3. USA – down $42 million (8.7 percent). The fall was led by a fall in beef exports, down $25 million (23 percent) in value and 11 percent in quantity. Milk albumin (milk protein) fell $10 million (64 percent) and iron and steel articles fell $9.8 million. The largest rise was wine, up $5.8 million (17 percent) in value and 34 percent in quantity.
  4. EU – down $43 million (9.8 percent), led by a falls in meat and edible offal (down $22 million) and green kiwifruit (down $18 million). Casein and caseinates fell $9.2 million (67 percent). The largest rise was pharmaceutical products, up $5.4 million (60 percent).
  5. Japan – down $26 million (9.3 percent), led by a fall in kiwifruit, down $15 million (37 percent) in value and 37 percent in quantity. Wood pulp and waste paper fell $12 million (98 percent), while logs, wood, and wood articles rose $6.6 million.

Imports fall 10 percent

In July 2016, imported goods were valued at $4.4 billion, down $503 million (10 percent).

When we exclude petroleum products (such as crude oil) from the total import value for July 2016, the net movement for all other imported goods was a $300 million fall (down 6.9 percent).

Intermediate goods lead fall in imports

All three main broad economic categories fell in value.

Intermediate goods

fell $296 million (15 percent) with falls in:

  • crude oil, down $181 million (48 percent)
  • processed industrial supplies (eg chemicals and metal scraps), down $83 million (8.8 percent)
  • primary industrial supplies (other than food or beverages), down $30 million (40 percent)
  • parts and accessories of capital plant (eg electrical and specialised machinery), down $24 million (10 percent).

Excluding crude oil, the net movement of intermediate goods in July 2016 was a $115 million fall (7.4 percent).

Consumption goods fell $114 million (9.6 percent) led by:

  • semi-durable goods (eg clothing and toys), down $41 million (13 percent)
  • durable goods (eg household appliances), down $16 million (7.7 percent)
  • non-durable goods (eg.clothing and chemical sprays), down $11 million (3.8 percent).

When compared with the same period of the previous year, monthly values of consumption goods imports have been rising since August 2014. The fall in the value of consumption goods in July 2016 marks the end of a 22-month long rise in values.

Capital goods fell $52 million (4.1 percent) led by:

  • machinery and plant (e.g. electrical and office machinery), down $87 million (12 percent)
  • transport equipment (e.g. road vehicles), up $36 million (7.1 percent).

In other categories of goods:

  • petrol and avgas fell $43 million (34 percent)
  • passenger motor cars fell $4.9 million (1.3 percent).

Imports fall from four of our five top import partners

The monthly movements for July 2016 for our top import partners (ranked by total annual goods imports) were:

  1. China – down $83 million (9.3 percent), led by a fall in clothing (down $23 million), computers (down $20 million), and electrical machinery (down $8.9 million). Imports of fertilisers from China were up $15 million.
  2. EU – down $191 million (21 percent), led by a fall in aircraft and aircraft parts (down $118 million), railway coaches (down $22 million), and mechanical machinery (down $15 million). Potassium fertilisers rose $12 million.
  3. Australia – down $33 million (6.2 percent), led by falls in aluminium oxide (down $15 million) and pharmaceutical products (down $7.1 million). The largest rise was vegetable oils (up $4.3 million).
  4. USA – up $83 million (13 percent), led by a rise in the value of aircraft and aircraft parts (up $129 million). The rise was partly offset by falls in commodities such as electrical machinery (down $9.2 million).
  5. Japan – down $4.3 million (1.4 percent), led by televisions (down $14 million) but partly offset by a rise in aircraft (up $6.5 million).

Due to the timing of large petroleum shipments, the values of petroleum imports fluctuate for specific countries. In July 2016, petroleum influenced the large movements in the value of imports from: United Arab Emirates, Saudi Arabia, and Malaysia which had large decreases; Indonesia and Russia had large increases.

United Kingdom's component of trade with European Union

Exports to the UK were 25 percent of New Zealand’s total exports to the EU in July 2016.

If the UK and the rest of the EU are regarded separately, the respective movements in exports for July 2016 were:

  • UK – down $15 million (13 percent) led by a fall in lamb (down $7.5 million)
  • EU (excluding the UK) – down $28 million (8.6 percent) led by kiwifruit (down $20 million) and lamb (down $8.8 million).

Imports from the UK were 14 percent of New Zealand's total imports from the EU in July 2016.

The respective movements in imports for July 2016 were:

  • UK – down $14 million (12 percent) due to falls over commodities such as chemical and pharmaceutical products
  • EU (excluding the UK) – down $177 million (22 percent) due to aircraft (down $117 million).

Goods trade has deficit in July 2016

In July 2016 there was a goods trade deficit of $433 million (11 percent of exports). This compares with an average deficit of 12 percent of exports for the previous five June months.

For the year ended July 2016 there was an annual trade deficit of $3.0 billion. 

Seasonally adjusted exports rise 2.2 percent

The seasonally adjusted value of exported goods in July 2016 rose 2.2 percent ($90 million) from June 2016. This follows a 0.9 percent fall in June 2016 compared with May 2016.

The trend for goods exports has been generally increasing since January 2015, and was 3.9 percent higher in July 2016 than at the most-recent low point in December 2014.

Contrasting movements in seasonally adjusted exports

The seasonally adjusted movements in July 2016, compared with June 2016, for our main export destinations were:

  • China – down $87 million (9.7 percent) to $814 million. The trend is 22 percent lower than the series peak in December 2013.
  • Australia up $77 million (12 percent) to $742 million. The trend is 22 percent lower than the series peak in July 2011.
  • EU down $17 million (4.0 percent) to $418 million. The trend is 17 percent lower than the series peak in December 2008.

Changes in seasonally adjusted export values

Fruit fell 16 percent ($39 million) in July 2016, following a 6.6 percent increase in June 2016. The seasonally adjusted quantity fell 3.3 percent.

Meat and edible offal fell 9.3 percent ($50 million), following a 4.9 percent fall in June 2016. The seasonally adjusted quantity fell 8.4 percent.

Logs, wood, and wood articles fell 1.5 percent ($5.5 million), following a 1.0 percent fall in June 2016. The quantity for logs, wood, and wood articles is not seasonally adjusted.

Milk powder, butter, and cheese rose 0.6 percent ($5.4 million), following a 10 percent rise in June 2016. The seasonally adjusted quantity rose 1.3 percent.

Trend for meat and edible offal continues to fall

The trend for meat and edible offal has been falling since October 2015. The trend is 17 percent lower than the most-recent high in September 2015.

Milk powder, butter, and cheese has risen for the third month in a row. Before the rise in May 2016, this commodity had fallen for 10 consecutive months.

Recent trends for values of other leading commodities:

  • Logs, wood, and wood articles has been rising for 13 months.
  • Fruit  fell in July 2016 after rising for six consecutive months.

Seasonally adjusted imports rise 5.6 percent

Seasonally adjusted goods imports in July 2016 rose 5.6 percent ($235 million) from June 2016. This fall follows a 1.0 percent fall in June 2016 (compared with May 2016). Excluding petroleum and products, seasonally adjusted imports rose 6.3 percent in July 2016 from June 2016.

 

Exchange rate movements

The Reserve Bank’s trade weighted index showed that the New Zealand dollar was 1.4 percent higher in July 2016 than in June 2016, and 8.4 percent higher than in July 2015.

 

For more detailed data, see the Excel tables in the ‘Downloads’ box.

See DataInfo+ for information on definitions, data quality, and revisions. These sections were previously included in this release.

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