New Zealand Trade Surplus Rises To NZ$464 Mln, Exports At Record High.

New Zealand's trade surplus increased in March, backed by exports, which reached a record high value during the month, data from Statistics New Zealand showed Friday.

The trade balance posted a surplus of NZ$464 million in March, more than the NZ$200 million forecast by economists. In February, the surplus amounted to NZ$193 million.

Exports rose 11.1 percent year-on-year during the month, while imports climbed 17.2 percent. Total exports amounted to NZ$4.5 billion, which is the highest monthly figure ever recorded.

The rise in exports again owed to higher exports of milk powder, butter, and cheese, thanks to strong demand from emerging economies, in particular China, JP Morgan economist Helen Kevans said in a note today.

Exports to China rose 41.6 percent year-on-year during the month, while that to Japan increased 18.3 percent. Shipments to India climbed 40.8 percent.

During the three months ended March, merchandise exports increased 3.2 percent to NZ$11.6 billion in seasonally adjusted terms. Higher quantities of dairy products was the major contributing factor to the increase.

The value of imported goods increased 8.9 percent on quarter to NZ$12.0 billion. Higher prices for crude oil and processed industrial supplies were the major contributors. For the march 2011 quarter, the seasonally adjusted trade deficit was NZ$428 million, representing 3.7 percent of the exports.

On Thursday, the Reserve Bank of New Zealand left interest rates unchanged at historic lows, and signaled they were likely to remain there for the time being. The RBNZ left its Official Cash Rate (OCR) at 2.50 percent for a second month.

The OCR was reduced by 50 basis points at the March meeting. The move was made in an attempt to restore confidence in the economy following the Christchurch earthquake.

Announcing the decision, governor Alan Bollard said the outlook for the economy remains very uncertain following February's Christchurch earthquake. He said the trading partner growth remains robust, helping push New Zealand's export commodity prices higher.

Along with relatively favorable climatic conditions, the improved price outlook is supporting a pickup in on-farm investment. However, he pointed to higher oil prices and strong New Zealand dollar as unwelcome factors that are dampening the economic activity.

Source : rttnews.com