STILL GRIM: Statistics New Zealand figures show exports fell 5.4 per cent in the June quarter, while imports were down 3.4 per cent.

New figures are highlighting fears that the improvement in New Zealand's trade performance is in danger of petering out.

Data published today by Statistics New Zealand (SNZ) showed this country posted a $417 million trade deficit in June, dramatically different from the median forecast among economists of a $265m surplus.

While the result was heavily skewed by the importation of several large aircraft for the start of domestic services by Jetstar, the figures also showed up worrying trends in major agricultural exports.

Excluding the aircraft, which were valued at $571m, the trade balance would have been a surplus of $154m, SNZ said.

But Goldman Sachs JBWere New Zealand strategist Bernard Doyle said the major disappointment was with exports, which fell 11 percent or $395m from June 2008 to $3.2 billion last month.

Declines in dairy and meat exports were the key driver, and not surprising as those sectors were booming a year ago.

But volume data told a more concerning story, with dairy export tonnage up a "massive" 54 percent in the June quarter from a year earlier.

"This is clearly unsustainable and suggests dairy exports will underperform over coming months as volumes normalise," Mr Doyle said.

The strength in dairy volumes had masked the impact of weak prices, while the rise in the New Zealand dollar was showing signs of weighing on other sectors.

At the same time, recovery in the domestic economy was likely to see import growth pick up.

"In other words, NZ's nascent trade recovery is in danger of being snuffed out prematurely," he said.

SNZ's figures put the value of imports for June at $3.6b, down $192m or 5.1 percent from June 2008.

Until the June deficit, New Zealand's trade balance had been in surplus for four consecutive months.

ASB economist Jane Turner said that the trade surpluses had been driven by recovery in dairy production, following last season's drought, and weakness in import demand due to recession.

"As we head into a new dairy season, dairy production will no longer be making a strong contribution to export strength and the underlying weakness in export demand will become apparent."

With exports falling and imports likely to be flat, trade surpluses were not likely to carry on throughout the second half of 2009.

For the year to June, the country recorded a trade deficit of $3.18b.

The value of exports for the year to June rose 7.5 percent from a year earlier to $43b, while imports rose 3.8 percent to $46.2b.

For the June quarter exports fell a seasonally adjusted 5.4 percent from the preceding three months to $10.2b, while imports fell 3.4 percent to $10.4b.

The seasonally adjusted trade deficit for the latest quarter was $217m, following an almost nil deficit in the March quarter.

NZPA