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High kiwi overshadows benefits of Chinese deal

New Zealand Herald, Auckland

High kiwi overshadows benefits of Chinese deal

30 October 2009

By Kate Foley

The benefits of the New Zealand-China free trade deal have been overshadowed by the high dollar and plunging export values in September, figures from Statistics New Zealand show.

The September overseas merchandise trade statistics showed overall value of exports fell by 11 per cent to $2.8 billion and imports fell by 27 per cent to $3.2 billion when compared with September last year.

Milk powder, butter and cheese exports fetched $95 million less, despite a 56 per cent jump in the quantity exported.

Petrol products recorded the largest fall in import values, down $242 million or 34 per cent. The drop was led by crude oil - which halved in price since September 2008.

In spite of these falling volumes, New Zealand’s exports to China leapt by $1.3 billion, almost 60 per cent.

Westpac chief economist Brendan O’Donovan said several factors were responsible for the growth in exports to China.

"Some of it is because of the free trade agreement, some of it is because China is growing and the rest of the world isn’t, part of it was the melamine fiasco," he said.

"China was looking for purchase of safe dairy product."