Imports fall leads to annual trade surplus
Imports fell nearly $1 billion in August 2020, leading to the largest annual trade surplus since 2014, Stats NZ said today.
The $1.3 billion annual goods trade surplus for the August 2020 year reflected a rise in exports and a fall in imports over the past months.
“The recent falls in imports and growth in exports resulted in an annual trade surplus not seen since the strong 2013/14 dairy export season, when product prices were high,” senior insights analyst Nicholas Cox said.
Imports of crude oil, cars, and other vehicles were much lower than usual in recent months after the COVID-19 pandemic. New Zealand’s demand for fuel dropped due to international and domestic travel restrictions, which were put in place to slow the spread of COVID-19. During the lockdown in April, imports of vehicles were particularly affected by international trade restrictions and the closure of vehicle dealerships as non-essential businesses.
Value of imports down in August
The value of monthly goods imports in August 2020 fell $940 million (16 percent) from August 2019. All main economic categories of goods fell in value: capital goods (products used to produce other goods and services), intermediate goods (products imported as inputs in the production of other goods and services), and consumption (consumer) goods.
Crude oil fell $346 million, industrial supplies (such as steel and plastics) fell $157 million, industrial transport equipment (such as trucks and vans) fell $154 million, passenger motor cars fell $133 million, and consumer goods (such as clothing and footwear) fell $123 million.
These falls were partly offset by a rise in diesel (up $84 million).
Exports rise in August
Higher exports of kiwifruit and aircraft helped boost the value of total goods exports by $349 million (8.6 percent) from August 2019 to reach $4.4 billion in August 2020.
Several of New Zealand’s main export commodity groups were up in value in August 2020 compared with August 2019.
Fruit rose $104 million (28 percent) to $470 million, led by gold kiwifruit (up $80 million or 48 percent). The rise was quantity-led, but the average unit value also rose, up 8.3 percent.
Exports of gold kiwifruit in the 2020 export season to date (March–August) were 29 percent higher in value and 18 percent higher in quantity than in the 2019 season. Exports of green kiwifruit were also up (by 7.1 percent in value and 3.2 percent in quantity).
“The increase in the value of kiwifruit exports in 2020 resulted from strong international demand, higher prices, and higher harvested volumes, particularly of gold kiwifruit,” Mr Cox said.
“The volumes exported are higher than in previous years, despite concerns earlier in the year of a potential shortage of labour during the harvest season in April and May.”
Dairy products were up $55 million (10 percent), and wine was up $30 million (18 percent).
The largest rise in total goods exports in August 2020 was for aircraft and parts, up $205 million.
“In August 2020, aircraft were sent to the United States for long-term storage as New Zealand’s border closure restricts international travel,” Mr Cox said.
Other contributors to the rise in exports in August 2020 were exports of live animals (up $77 million), mainly due to large shipments of cattle headed for China.
These rises were partly offset by falls in crude oil (down $39 million), fish (down $36 million), and mechanical machinery and equipment (down $22 million).
Monthly trade balance
The monthly trade balance in August 2020 was a deficit of $353 million. The average deficit in the previous five August months was $1.3 billion.