Falling exports to China drive New Zealand trade deficit

New Zealand's October trade deficit was the highest in six years as exports to China plunged, the government statistics agency announced Thursday.

Total goods exports were down 215 million NZ dollars (169.21 million U.S. dollars), or 5.1 percent, year on year in October, according to Statistics New Zealand.

Goods exports to China led the fall, plunging by 433 million NZ dollars (340.73 million U.S. dollars).

Milk powder led the fall in exports to China, down 459 million (361.19 million U.S. dollars) or 77 percent), with quantities down 67 percent.

New Zealand's pillar dairy industry took the biggest hit with milk powder, butter and cheese exports to all countries falling by 361 million NZ dollars (284.07 million U.S. dollars).

"Milk powder exports to China fell after the record prices and quantities of late 2013, contributing to a 40-percent fall in exports to China," international statistics manager Jason Attewell said in a statement.

Exports to Australia rose by 32 million NZ dollars (25.18 million U.S. dollars), or 4 percent, led by crude oil, and putting exports to Australia 185 million NZ dollars (145.61 million U.S. dollars) higher than those to China, compared with October last year when they were 280 million NZ dollars (220.38 million U.S. dollars) lower.

"Since June this year we've sent a higher value of goods to Australia than to China, but China is still ahead for the 12 months ending October," Attewell said.

The value of imported goods rose by 12 percent to 4.9 billion NZ dollars (3.85 billion U.S. dollars) year on year, led by capital goods, including aircraft, helicopters and goods vehicles.

The October deficit of 908 million NZ dollars (716.71 million U. S. dollars), or 23 percent of exports, was the largest October deficit since 2008.

The trade balance for the year ended October was a deficit of 107 million NZ dollars (84.46 million U.S. dollars), falling from a trade surplus of 1.8 billion NZ dollars (1.42 billion U.S. dollars) for the August 2014 year.

The main opposition Labour Party said the figures showed the government's target of an operating surplus this financial year was at risk.

"The trend for exports has been falling since January, showing this is a long term trend," Labour finance spokesperson Grant Robertson said in a statement.