Quarterly exports to China overtake those to Australia for first time; Trade surplus for March a bigger than expected NZ$718 mln

China overtook Australia as our top export destination for the first time in the March 2013 quarter, Statistics New Zealand said today.

The strong and continuing lift in exports to China helped New Zealand to a higher-than-expected overseas merchandise trade surplus of NZ$718 million (16% of exports) in March. The monthly figures are not seasonally-adjusted, while the quarterly figures are.

The March surplus compares with an average deficit of NZ$354 million (8.3%)  of exports over the previous five March months.

For the quarter, there was a seasonally adjusted trade surplus of NZ$52 million, equivalent to 0.4% of exports. This follows a deficit of NZ$59 million in the December 2012 quarter.

During the quarter, goods exported to China were valued at NZ$2.3 billion. That is up NZ$554 million, or 32% compared with the March quarter a year ago. The figures by country are not seasonally adjusted.

In just the month of March alone, exports to China showed the largest increase, up NZ$278 million or 47%. This was led by meat and edible offal, up NZ$91 million 247%, whole milk powder, up NZ$78 million (66%), and pine logs, up $74 million (102%).

In the March quarter exports to Australia - now our second-largest export market - were valued at NZ$2.2 billion.

Statistics New Zealand said that monthly exports to China overhauled those going to Australia for the first time in January this year and had continued to surpass the level of exports to Australia for every month of the quarter.

"Twenty percent of goods exported from New Zealand went to China in the March 2013 quarter," industry and labour statistics manager Louise Holmes-Oliver said. "This compares with 15% in the same quarter last year."

The seasonally adjusted value of exported goods rose 0.8% in the March 2013 quarter to NZ$11.6 billion. This follows a fall of 2.9% in the December 2012 quarter.

Milk powder, butter, and cheese led the increase in the March 2013 quarter – values were up 3.5% (NZ$96 million), and quantities were up 3.6%.

The seasonally adjusted value of imported goods decreased 0.2% in the March 2013 quarter to NZ$11.5 billion, following a 1.6% fall in the December 2012 quarter.

For the March 2013 month, export values increased NZ$213 million (5.1%) to NZ$4.4 billion compared with the same month in 2012, while imports decreased NZ$319 million (7.9%) to NZ$3.7 billion.

Economists said the strong increase in meat export volumes over the month were due to the drought, as farmers brought forward livestock slaughter in the face of increasingly dry conditions.