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New Zealand’s trade surplus narrowed in June as a seasonal decline in farm production and falling prices curbed exports, according to a Bloomberg report.

Trade surplus shrank to NZ$276 million from a revised $768 million in May, Statistics New Zealand was quoted as saying. The amount is less than the $368 million median estimate in a Bloomberg News survey of seven economists.

New Zealand’s commodity-export prices eased in June from a record high the previous month, led by dairy and aluminum, according to the report. Exports, which make up 30% of gross domestic product, are expected to be underpinned by demand from China, the biggest customer for New Zealand milk.

“Exports are likely to be continuing to benefit from high commodity prices and Chinese demand,” Philip Borkin, an economist at Goldman Sachs JBWere Ltd. in Auckland, was quoted by the report as saying.

The monthly figures aren’t seasonally adjusted and New Zealand’s exports typically increase between February and May as milk, wool and meat production peaks, the report says.

The surplus compared with a $331 million deficit a year earlier. As a result, the annual trade surplus widened to $639 million, the most since March 2002.

Exports fell 9.8% from a record in May to $3.78 billion, led by slower sales of dairy products, meat, crude oil and fruit.

From a year earlier, exports rose 17% percent, led by a 44% surge in dairy sales. Overseas sales of logs and aluminum also increased. Export prices rose 53% from June last year, according to the ANZ National index.

Exports to China increased 16% from a year earlier to $528 million. China now buys 10% of total annual exports and is New Zealand’s second-largest customer after Australia.

Imports rose 2.3% from May to a 12-month high of $3.51 billion, led by fuel and machinery, according to the report. Vehicle imports were little changed.

Crude oil imports fell 13% from May, as prices dropped 14%.

From a year earlier, imports fell 1.6% because there was a $571 million purchase of aircraft in June last year. Excluding aircraft, imports jumped 17% from a year ago, led by fuel and vehicles, according to the report.


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