Total exports increase despite coronavirus outbreak

Wednesday, 25 March 2020

Higher prices for dairy products are offsetting plummeting demand for logs and fish due to the coronavirus outbreak, Stats NZ says.

Preliminary data for the week ending last Wednesday shows New Zealand's exports rose 3.7 per cent while imports fell 11 per cent. 

The data may provide some encouragement over how the economy might cope with the crisis created by the coronavirus pandemic. 

Imports during the week fell in value to $1 billion while exports increased to $1.32 billion, despite a drop in trade with China, that saw both Chinese imports and exports fall by 14 to 15 per cent.  

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The data came after the announcement of a 4.5 per cent ($212 million) increase in the total value of goods exports in February compared with the same month last year. 

Dairy products, particularly milk powder, led the increase to $4.9 billion, Stats NZ international statistics manager Darren Allan said.

'Dairy product exports to China remained high, but logs, meat, and fish exports were lower.'

Milk powder exports rose 28 per cent to $191 million, although quantities were little changed, he said. 

The increase in total good exports was despite falls in exports of logs and fish, particularly to China, in the wake of the Covid-19 outbreak.

Forestry products were down $124 million or 27 per cent, while exports of fish fell 27 per cent to $47 million. 

The total value of meat exports fell 1.4 per cent, with higher quantities exported to the United States instead of China, Allan said.

A fall in sheep meat was partly offset by a rise in beef and average prices per tonne were up for both. 

'The value of monthly beef exports to the US was higher than to China for the first time since early 2019,' Allan said.

'Higher quantities of New Zealand beef exports were sent to the US, rather than China, following the Covid-19 outbreak in China.'

In contrast to rises in exports to all New Zealand's other main markets, exports to China fell $120 million in February.

The leading contributors to the fall in exports to China were untreated logs (down $80 million), sheep meat (down $73 million), beef (down $65 million), and fish (down $40 million).

These falls were offset by a rise in milk powder, up $90 million on February 2019, led by a 30 per cent increase in average values. The quantity exported also rose, up 13 per cent.

Federated Farmers dairy chairman Chris Lewis said as a primary producer, it was pleasing to see exports up in the face of the virus.

'It's very humbling as a farmer at the moment that we can still operate and carry on, with strict rules, to contribute to New Zealand's exports.'

ASB senior rural economist Nathan Penny said while the overall impact of COVID-19 on exports was modest during February, the pandemic's effects were likely to continue to be uneven by export category.

In addition, the data only effectively reflected the impact of the outbreak in China and the impact of the global pandemic would be seen over the coming months, he said.

While exports increased last month, the value of goods imports fell 9.9 per cent to $475 million from February 2019, with falls across all major categories. 

The leading contributor to the fall was industrial transport equipment, like aircraft, down $161 million from high levels a year ago.

Products imported for the production of other goods and services, such as crude oil, fell $134 million; consumer goods fell $92 million.

Imports fell across many of New Zealand's top markets, except for the US, with the largest fall from China, down $218 million or 22 per cent.

The monthly trade balance in February 2020 was a surplus of $594 million. In the previous 10 February months, there were eight surpluses and two deficits.