Falling dairy prices drive growing New Zealand trade deficit

New Zealand's trade deficit grew last year as dairy prices plunged, the government statistics agency said Thursday.

Falling oil prices failed to stop the value of imports last year hitting a record 52.5 billion NZ dollars (33.84 billion U.S. dollars), up 2.5 percent from the previous year, according to Statistics New Zealand.

The average price of crude oil last year was about a third lower than it was in 2014 and the value of imports fell by 33 percent or 1.6 billion NZ dollars (1.03 billion U.S. dollars).

"The depreciating New Zealand dollar has an upward effect on import and export prices," international statistics senior manager Jason Attewell said in a statement.

"Imports rose 1.3 billion NZ dollars (837.98 million U.S. dollars), but exports fell 1.1 billion NZ dollars (709.06 million U.S. dollars) as the impact of falls in world prices, such as for dairy products, was greater than the upward exchange rate effect."

Annual exports were valued at 49 billion NZ dollars (31.58 billion U.S. dollars), down 2.2 percent from 2014.

The value of New Zealand exports to China, the country's top export destination, was down by 1.4 billion NZ dollars (734.96 million U.S. dollars) or 14 percent.

In the pillar dairy sector, milk powder, butter, and cheese exports fell by 3 billion NZ dollars (1.93 billion U.S. dollars) to 11.5 billion NZ dollars (7.41 billion U.S. dollars), with China accounting for two-thirds of the fall.

Despite the fall in value, the quantity of exported milk powder, butter, and cheese rose by 2.9 percent to a new record 2.9 million tonnes.

The quantity exported to China was 21 percent of the total in 2015, down from 28 percent in 2014.

The annual trade deficit last year grew by 7.2 percent to 3.5 billion NZ dollars (2.25 billion U.S. dollars), the largest New Zealand trade deficit since 2008. Endit