Rising import prices drive increase in trade deficit

The total trade deficit increased in the September 2022 quarter to $7.5 billion, driven by increases in import prices, Stats NZ said today.

Compared with the September 2021 quarter, total imports of goods and services rose $5.6 billion (23 percent) to $29.7 billion, while total exports of goods and services rose $4.5 billion (25 percent) to $22.2 billion.

QuarterExportImport
Jun-172011604183218091728156
Sep-171736093578419440111346
Dec-172104357049220979385332
Mar-182168187663418891377663
Jun-182139134739720202954083
Sep-181907589984922723388807
Dec-182178763019122671104605
Mar-192311774417419915611508
Jun-192246094188621071078419
Sep-191939417400723187325557
Dec-192276599949223464963706
Mar-202394596136219816263936
Jun-201924434485215980099609
Sep-201634106891818329795481
Dec-201849381233719772574533
Mar-211761545538118767514010
Jun-212123813556420431613892
Sep-211784549019224160076128
Dec-212074571545425653510304
Mar-221993874890523635615171
Jun-222338481321125571605403
Sep-222242245175529721715073

Goods imports rose $3.7 billion (19 percent) to $22.7 billion, while goods exports rose $3.1 billion (21 percent) to $17.5 billion. These increases were driven by rising prices, with import prices (up 25 percent compared to the previous September quarter) rising faster than export prices (up 18 percent).

QuarterExportImport
Jun-171138795
Sep-171119772
Dec-171180802
Mar-181154800
Jun-181183817
Sep-181225847
Dec-181203859
Mar-191172829
Jun-191210843
Sep-191231844
Dec-191269846
Mar-201267850
Jun-201297850
Sep-201190818
Dec-201185803
Mar-211176796
Jun-211273835
Sep-211331869
Dec-211368902
Mar-221474966
Jun-2215291025
Sep-2215761090

Petroleum and petroleum products led the increase in import prices this quarter.

QuarterFood and beveragesPetroleum and petroleum productsIron and steel
Sep-19113318251373
Dec-19116217891375
Mar-20117418201323
Jun-20124711781360
Sep-20119011831268
Dec-20119111141255
Mar-21118412671230
Jun-21120716101385
Sep-21124218431597
Dec-21125519931817
Mar-22134122381994
Jun-22143131972053
Sep-22152038772187

Petroleum and products imports have been driving the increase in goods imports over the past 12 months. Petroleum and products imports (especially diesel and petrol) have risen 90 percent in value compared with a year ago.

QuarterProcessed fuel and lubricants pricesProcessed fuel and lubricants volumeMotor spirit pricesMotor spirit volume
Sep-192087152018751100
Dec-192088174818381103
Mar-202073183518771087
Jun-201602144912451118
Sep-201349248411841372
Dec-201347129712111138
Mar-211443203913741665
Jun-211764164816641024
Sep-211946174718521211
Dec-21222015812066847
Mar-222398170122751003
Jun-223612302231771686
Sep-224336352237302046

The Marsden Point refinery ceased operation in April 2022 .

Other commodities to contribute to the increase in goods import values in the September 2022 quarter were:

  • electrical machinery and equipment, up $313 million (20 percent)
  • mechanical machinery and equipment, up $219 million (8.5 percent)
  • vehicles, parts, and accessories, up $190 million (7.4 percent).

“Inflation is a global reality, which means New Zealand importers are paying more for goods, many of which are essentials like fuel,” international trade manager Alasdair Allen said. “A falling New Zealand dollar also has an upward effect on import prices and their New Zealand dollar values.”

Return of widespread international travel boosts both imports and exports

In the September 2022 quarter, there was an increase in the number of international travellers. This has led to an increase in both exports and imports of travel services.

QuarterExportImport
Jun-1836106235841574449172
Sep-1828587158412022546485
Dec-1838860554811647150833
Mar-1954501284871383040149
Jun-1935445139461540306242
Sep-1929693181441950577060
Dec-1940235715981653007292
Mar-2053762768891282012549
Jun-201338394313270345325
Sep-201103656371323215596
Dec-201050693324351793097
Mar-211072065405293923544
Jun-211373396072351209818
Sep-21851252334393101950
Dec-21755523184432116443
Mar-22786026304386583691
Jun-221295748669558663407
Sep-221806546939804020713

While international traveller numbers increased for both arrivals and departures, neither has yet returned to pre-COVID levels .

Within the travel category, personal travel led the increase, up $635 million from the September 2021 quarter to $905 million.

QuarterBusiness travel Education-related travel Other personal travel
Sep-1927248809910826535591611110486
Dec-1941570684010847415362520089222
Mar-2029580650410381964564039162929
Jun-2042475694856002152439916467
Sep-2029542845802670631271442895
Dec-2029559438786929237234204649
Mar-2129570482784137454258357469
Jun-21178133417760975512434287143
Sep-2188921258492596032269735044
Dec-2167514523455963707232044954
Mar-2268516500424452041293057763
Jun-22236050382424452041635246246
Sep-22323502502577875307905169130

“While we have seen increasing numbers of international visitors to New Zealand, the tourism industry has not yet fully recovered. Although we did see tourists in the September quarter, for example visiting our ski fields, many visitors have been taking the opportunity to visit friends and family,” Allen said.

Australia dominated both travel exports and imports in the September 2022 quarter.

CountrySep-19Sep-20Sep-21Sep-22
Australia48227935081195030135383370460893602
China648866346277675429191988749277934647
India1970061641859910209326162463487478
Other1368678185529252047341697333680728710
CountrySep-19Sep-20Sep-21Sep-22
Australia6248492792794413374444192376818183
United States204019334135950289855926103142434
United Kingdom18967360467504527696704130132138
Other932034843274925983301105128193927958

“September quarters are traditionally the peak time for New Zealanders to travel overseas,” Allen said. “This year, many New Zealanders took advantage of the relaxation of travel restrictions to spend some time in the sun, or to visit friends and family.”

QuarterSea transportAir transport
Jun-18500915098627908588
Sep-18544792032680262995
Dec-18576382874687220221
Mar-19530888087657606699
Jun-19509875354680981801
Sep-19553509582717901540
Dec-19586219098701105821
Mar-20561437321548756190
Jun-20455667440142413876
Sep-20477837107177624284
Dec-20546183895201466712
Mar-21621698162177928165
Jun-21687356145251882883
Sep-211004508846248256022
Dec-211214014102270663508
Mar-221071478395379923052
Jun-221209000517553204953
Sep-221477909757765978465

“Increased international travel doesn’t just lead to increases in travel services, but also other categories like aircraft maintenance services, transportation services in the form of airfares, and demand for fuel,” Allen said.

Higher prices lead to rise in exports

Total export prices have been increasing since the March 2021 quarter. Dairy prices led the increase in export prices in the September 2022 quarter. Dairy export values rose $1.4 billion (49 percent) to $4.4 billion, compared with the September 2021 quarter.

Other commodities to contribute to the increase in goods export values were:

  • meat and edible offal, up $412 million (22 percent)
  • preparations of milk, cereals, flour, and starch (includes infant formula), up $198 million (40 percent)
  • casein and caseinates, up $167 million (64 percent).
QuarterMeatDairyCasein
Sep-17127713641014
Dec-17136814571010
Mar-1813341359930
Jun-1813831402916
Sep-1814021489980
Dec-1813981404928
Mar-1913901297926
Jun-19145914351047
Sep-19152715701119
Dec-19167915371125
Mar-20155315491187
Jun-20154316121320
Sep-20140714141245
Dec-20141113771200
Mar-21139013441153
Jun-21148415501231
Sep-21164416591420
Dec-21173916471532
Mar-22181618031734
Jun-22184620241893
Sep-22186521272211

Services exports rose $1.4 billion (43 percent) to $4.7 billion compared with the September 2021 quarter.

The movements of our top services export categories in the September 2022 quarter compared with the September 2021 quarter were:

  • travel services, up $955 million to $1.8 billion
  • transportation services, up $309 million to $673 million
  • other business services, up $71 million to $659 million
  • telecommunications, computer, and information services, up $21 million to $442 million
  • charges for the use of intellectual property services, up $20 million to $419 million.

/Stats NZ Public Release. This material from the originating organization/author(s) may be of a point-in-time nature, edited for clarity, style and length. The views and opinions expressed are those of the author(s).View in full here.