Soaring prices for dairy products and a surge in exports to China last month left New Zealand with its lowest October trade deficit in almost two decades, the government statistics agency said Wednesday.
The October trade deficit was 168 million NZ dollars (137.53 million U.S. dollars), or 4 percent of exports, the lowest October trade deficit since 1996, according to Statistics New Zealand.
"The low trade deficit was due to exported goods recording the highest value for an October month," industry and labor statistics manager Louise Holmes-Oliver said in a statement.
"It was the highest value for exported goods for any month since March 2013."
The value of exported goods rose by 783 million NZ dollars, or 23 percent, year on year to 4.2 billion NZ dollars, led by exports of milk powder, butter and cheese, which were up 690 million NZ dollars (85 percent) to 1.5 billion NZ dollars, while quantities increased 22 percent.
The value of imported goods rose by 237 million NZ dollars (5.7 percent) to 4.4 billion NZ dollars.
Exports to China exceeded exports to Australia for the first month since March 2013, and only the fourth month ever, with total annual exports to Australia down 13 percent to 794 million NZ dollars, and exports to China up 133 percent to 1.1 billion NZ dollars, led by whole milk powder, and pine logs.
New Zealand Federated Farmers president Bruce Wills predicted that China would overtake Australia as New Zealand's biggest export market next year.
"In the past 12 months our exports to China are up a staggering 38.5 percent. While Australia remains our No. 1 export destination, I need to add 'just' because its lead over China is down to a mere 310 million NZ dollars in the year to October," Wills said in a statement.