28 Feb 2014

Dairy leads China export increase

11:00 am on 28 February 2014

Exports to China in January were double those to New Zealand's former largest trading partner, Australia.

 Aspiring middle class consumers drive rising demand for NZ milk.

Aspiring middle class consumers drive rising demand for NZ milk. Photo: AFP

Sales to China jumped to a third of total exports, helping push the country to its highest-ever trade surplus for a January month.

Official figures show a surplus of $306 million, the third consecutive month the trade balance has been in the black.

Exports rose 22 percent to $4.1 billion due to increased sales of milk powder, butter and cheese overseas.

Dairy products led the $1.2 billion worth of goods sold to China, while exports to Australia fell by $80 million to $556 million due to lower sales of crude oil and unwrought gold and silver.

Imports rose a modest 3.5 percent to $3.8 billion, and on an annual basis the country posted a surplus of $310 million.

Bank of New Zealand economist Craig Ebert says dairy and forestry are driving the exports. He says there are a lot of positive indicators in these figures and the trade numbers are consistent with ongoing growth at the start of this year and a shrinking current-account deficit.