NZ Merchandise Trade: Soft underneath – ANZ

Following the release of New Zealand (NZ) trade numbers for December, analysts at the Australia and New Zealand Banking Group (ANZ) anticipate short-term damages to upcoming NZ trade data due to China’s coronavirus impact.

Key quotes

NZ December’s unadjusted trade balance saw a surplus of $547 million, above expectations, due to softer imports, but this may be timing related. Exports lifted on the back of the usual seasonal increase in production and with prices elevated. The annual deficit narrowed to $4.3bn.

We will be watching these data in the coming months. Developments associated with coronavirus are creating uncertainty and it is far too early to know the impact the outbreak will have.

Going forward, exports are expected to soften due to the typical wind‑down in milk production and lower-than-usual demand for food services (due to coronavirus) flowing through to prices to some degree.

There could be wider impacts should the outbreak continue. Over the medium term, export returns are expected to remain favorable. Imports are expected to remain supported by domestic demand.