The value of exports fell $94 million - down 2.4% - to $3.8 billion in November 2012, compared with November 2011, data released by Statistics New Zealand showed.
This was despite a 60% increase in exports to China.
Exports to the USA rose 25% in November y-on-y.
Decreases for other countries resulted in total exports falling, compared with November 2011.
The value of imported goods has been flat at $4.5 billion for the month. Without one-off capital imports in November 2011, merchandise imports would have risen 5.9% and this would have been the largest increase since July 2012.
The trade balance for the November 2012 month was a trade deficit of $700 million, which was in line with market expectations according to ASB economists. The exchange rate showed no reaction at all to the news.
November month trade balances are typically deficits, and the current month deficit is equivalent to 18% of exports and that compares with an average deficit of 13% of exports over the previous five November months.
Seasonally adjusted exports increased 8.9% in November 2012, compared with October 2012. Milk powder, butter, and cheese led this increase. Seasonally adjusted imports rose 11% in November 2012.
The trend for exports appears to have been declining in recent months, and is 7.3% lower than its highest-ever peak of November 2011.
The trend for imports has shown little change in recent months, and is 4.8% lower than its record high of September 2008, Statistics NZ said.
Jane Turner, an economist at ASB made these comments on the data:
The monthly trade balance slipped into deficit for much of the second-half of 2012. The gradual pace of domestic recovery has resulted in a slight pick-up in imports.
Meanwhile, export receipts have declined as export commodity prices (particularly dairy prices) declined over the first half of 2012 from elevated levels. In addition, slowing demand from Australia and the US also appears to have impacted manufactured exports.
Looking ahead, we expect to see some improvement in export conditions over 2013 – with an improvement in meat and dairy prices (as a result of the US drought) and a recovery in demand from Australia and the US.
Nonetheless, conditions for exporters are likely to remain challenging, with the recovery in global demand likely to be only modest and the elevated NZD continuing as a headwind.
Trade balance, monthly
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25 Comments
Might it be a case of exporters heavily discounting USD export prices to remain globally competitive?
The popular New Zealand wine Oyster Bay is being sold at home for nearly double the price seen in the United States -read NZ Herald article
Stephen,
Am sure it is partly that effect; to the credit of exporters they no doubt are trying to stay in business. It does end up being a free gift either to foreign consumers at the cost of our consumers and producers; or a gift to foreign exporters at the cost of our consumers and import substituters.
A company in Auckland has recently been advertising half price new Audi cars; just that they have been first bought and registered in the UK. They are effectively the same car. It's absolutely clear that nearly all brands coming in to NZ have not dropped their prices by 40% even though the exchange rate suggests they should have. They have kept the margin, primarily for profit reasons, but also for brand maintenance reasons. Dropping the price annoys people who bought the same car the year before. Only products that are easily bought online from overseas websites seem to ahve come into line. So for every car coming in we are donating $30-40k unnecessarily to the Germans.
Keeping a more or less stable exchange rate over time clearly makes pricing and production planning massively easier. Hedging is possible- you will know more about it then me- but has very significant limitations.
Dropping the price annoys people who bought the same car the year before. Only products that are easily bought online from overseas websites seem to ahve come into line. So for every car coming in we are donating $30-40k unnecessarily to the Germans.
I was ecstatic when a car dealer offered me a channel stuffed preregistered brand new Japanese import Subaru Legacy a while back - I had been buying new ones at NZ retail prices at least NZD18,000.00 more than I should have.
Same in the UK, I used to be able to get brand Mercedes Benzs at near cost from a private entrant world rally driver with European car factory contacts - amazing Stg savings.
The retail markups do not go to the factory but to the local NZ dealers - my Grandmother played rest home cards with a multi-millionaire heiress of a local Wellington BMW dealership.
The car dealers indeed must be enjoying life now; my understanding though is that in many cases pricing is not based on a standard wholesale retail pricing structure. When we bought a couple of German cars 3 years ago, the dealer consulted with the German car company before authorising any discount. My clear take out was that the dealer's relationship is now largely an agent, taking a preset margin, with the price of any trade in and new car being largely set by the manufacturer. Could be wrong though.
I dont agree.
Twelve months ago our company lost half our export business to our parent company in Australia .Its cheaper for them to import product from South America because of the high Aussie dollar vs USD.
Net result less export sales and a couple of dozen staff sent down the road.
Lots of NZ companies will be facing extreme pressure exporting to Australia when the Aussie is strong against other currencies>Thats my perspective ;)
Thats the point really. Commodity currencies such as us and the Aussie are relatively strong but we havent moved much against the Aussie at all over twelve months and have weakened a fair bit over the last five years or so. I bet your aussie parent isnt importing from Brazil on the basis of their weak currency.
Xenophobia is not necessary here.
NZ is like a professional ballet dancer, moving beautifully between USA and China. NZ cares about $ not political non-sense, which is absolutely right and should be encouraged.
Nevertheless, which product decrease most or increase most in the Nov export?
I think you are out of order. An opinion is valid, and an external opinion looking in is something to be considered. Since when did Nzers or our Govn standup to obnoxious Nations? Take Tibet as an example, our Govn steers clear of the dalai lama and has done so for a considerable time. I can but see that as a bigger interest in $s than morals.
regards
Since when did Nzers or our Govn standup to obnoxious Nations?
Try these post WW2 examples, they not only stood up, but died doing thier duty.
Money-wise/Trade-wise/GDP-wise OR
Political-wise/Freedom-wise/National security-wise?
The graph below may provide answers for the first line.
Follow the money.
HISTORY has a habit of repeating itself. The Goldrush. The Australian minerals boom of the 1800's began with the discovery of much gold in Victoria, establishing Melbourne as the centre of government until it was re-located to Canberra 100 years later.
In Victoria in 1860, Chinese were 10% of the population and 20% of the diggers in the Victorian goldfields, which led to the "Lambing Flats" riots and the introduction of "The Chinese Migration Restriction Act of 1861" which became the forerunner of the "White Australia Policy" which lasted for 90 years
Lambing Flat Riots
Events on the Australian goldfields in the 1850s led to hostility toward Chinese miners on the part of many Europeans, which was to affect many aspects of European-Chinese relations in Australia for the next century. Some of the sources of conflict between European and Chinese miners arose from the nature of the industry they were engaged in. Most gold mining in the early years was alluvial mining, where the gold was in small particles mixed with dirt, gravel and clay close to the surface of the ground, or buried in the beds of old watercourses or "leads". Extracting the gold took no great skill, but it was hard work, and generally speaking, the more work, the more gold the miner won. Europeans tended to work alone or in small groups, concentrating on rich patches of ground, and frequently abandoning a reasonably rich claim to take up another one rumoured to be richer. Very few miners became wealthy; the reality of the diggings was that relatively few miners found even enough gold to earn them a living.
The Chinese generally worked in large organised groups, covering the entire ground's surface, so that if there was any gold there, the Chinese miners found it. They lived communally and frugally, and could subsist on a much lower return than Europeans. The rural background of most of the Chinese diggers suited them very well to life as alluvial goldminers: they were used to long hours of hard outdoor work as a member of a disciplined team, accustomed to simple sleeping quarters and basic food, and were satisfied with a much smaller return of gold than the majority of Europeans.
European resentment of the apparent success of the Chinese first surfaced as petty complaints: Europeans made stereotyped claims that the Chinese muddied the water holes, they worked on the Sabbath, they were thieves, they had insanitary habits, they accepted low wages and would drive down the value of labour. There is no evidence that any of these things were true. But because the Chinese were distinctive in appearance, language and dress, they became classic targets for xenophobia, and surly resentment became systematic hatred.
These pressures gave rise to several violent protests against government policies across Victoria and New South Wales in the late 1850s and early 1860s. The first anti-Chinese demonstration occurred in Bendigo in July 1854. Some of these incidents took the form of outright attempts at excluding the Chinese from a goldfield, or a portion of it. Disputes between European and Chinese miners flared into brawls at Daylesford and Castlemaine. A party of Chinese en route to the Victorian diggings from Robe discovered a new goldfield at Ararat, and were driven off their find by Europeans. Similar events occurred in New South Wales, which was just feeling the impact of significant Chinese immigration. European miners drove Chinese off the diggings at Rocky River in New England (Australia) in 1856. Serious confrontations followed at Adelong in 1857 and Tambaroora in 1858. In Victoria the Buckland River goldfield was the scene of repeated incidents, culminating in a major riot in July 1857.
There are two sub-texts to that narrative
(a) If AU had not enforced a "white australia policy", both australia and new zealand would not be the same as they are today.
(b) Follow the money .. where the money is .. they'll be there, extracting it better than anyone else
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