Dec 12, 2017 - The growth in New Zealand’s primary industry exports is impressive and provides the sector a strong base to deal with the challenges ahead, says Agriculture Minister Damien O’Connor. The latest Situation and Outlook for Primary Industries report shows the sector’s exports will grow by 8.5 per cent in 2018, to $41.4 billion.
“This would be the largest annual increase since 2014 when dairy prices rose to very high levels,” says Mr O’Connor.
“Growth this year is spread across all sectors and these gains are expected to be built on a more sustainable foundation.”
Mr O’Connor says dairy exports are leading the way, with a forecast increase of 15 per cent to $16.8b in 2018 despite the wet spring affecting production.
“Despite a decline in cow numbers, there has been some better value for exporters. The sector continues to provide a solid base for a better future.
“Meat and wool exports are forecast to grow 4.2 per cent to $8.7b, with lamb prices looking really good and beef, mutton, and venison also doing very well.
“The forestry sector is on pace for a third consecutive year of strong export growth with exceptional demand from China. Forestry exports are forecast to reach nearly $5.7b in 2018.”
Mr O’Connor says New Zealand’s primary industries are evolving.
“Our horticulture sectors are leading the charge in producing high-value products tailored to target markets overseas. This isn’t just true for kiwifruit, wine, and apples - there are also emerging opportunities for cherries, avocados, and berries.
“We are also seeing a huge shift to high-value products in the dairy sector. For example, infant formula exports are forecast to exceed $1b in 2018 for the first time. UHT milk, yoghurt, and other specialty products are also doing very well.
“We are a primary producing nation and it is very encouraging that the prospects for the primary industries look so bright. However, New Zealand and other primary producing nations face the global challenge of sustainability – we need to provide good quality, nutritious food for a rapidly rising global population but we must do this in a way that is sustainable.
“This means placing an even greater focus on high-value production, sustainable resource use, managing the risks posed to our primary sector by harmful pests and diseases, and meeting ever changing consumer demands.”
The news is also good for other sectors:
* Horticulture exports are forecast to grow 5.2 per cent in 2018 with broad-based growth across the sector. Wine, kiwifruit, and pipfruit are all contributing to this growth story, and there is a high level of investment supporting further growth.
* Rising prices for wild capture fisheries products and aquaculture volumes are expected to contribute to a 4.4 per cent increase in seafood exports to $1.8b.
* Honey export volumes are forecast to resume growth after a dip in 2017, while exports of innovative processed foods, including dietary supplements products, are expected to resume their growth.
DEc 11, 2017 - New Zealand exporters need to maintain a dialogue with Government about issues encountered in overseas markets at a time when New Zealand is looking to expand, and possibly reshape, its trade law framework, says Daniel Kalderimis, partner and head of Chapman Tripp’s International Law practice.
"International trade policy is entering choppy waters, and the rise of China, the Trump Administration’s America First philosophy and Brexit will all bear directly on New Zealand in ways that are difficult to predict.
"Although the prognosis looks good post the APEC Summit for the Comprehensive and Progressive Trans-Pacific Partnership (CPTPP), there will be continuing uncertainty until the agreement is signed.
"If CPTPP comes into force, export businesses should engage in medium to long-term planning to ensure the smooth operation of global supply chains," Kalderimis said.
So far, we have not seen a retreat from globalisation and liberalised trade that we feared when President Trump was elected, he said.
But there are changes in the wind.
"There is an emerging view that free trade agreements (FTAs) need to address global issues such as climate change and rising inequality and there may be a trend away from investor-state (as opposed to state-state) dispute settlement clauses, which allow corporates to sue governments."
Governments will always do things to support their own constituents, and sometimes that may mean protectionist or complicated rules that increase expense for exporters, said Tracey Epps, trade law consultant at Chapman Tripp and former senior advisor in the Ministry of Foreign Affairs (MFAT) Trade Law Unit.
"But systems are in place that allow the government to address those kinds of actions, as evidenced by New Zealand’s successful claim in the World Trade Organisation (WTO) against Indonesia earlier this year.
"There are benefits to businesses engaging early and well to bring sticking points to the attention of relevant officials."
The WTO system is extremely valuable for New Zealand, and as a small country we rely heavily on a rules-based system, she said.
"A real concern at present is that the WTO’s dispute settlement system is under threat from US actions in blocking the appointment of members to the Appellate Body."
Also valuable is New Zealand’s growing network of FTAs, she said. "New Zealand negotiators will have their work cut out for them in Geneva to ensure continued agricultural market access on favourable terms to the United Kingdom and the EU27 following Brexit."
The lawyers were commenting on the release of Chapman Tripp’s publication, International trade law - trends and insights.
Dec 7, 2017 - A new arrangement signed recently will simplify New Zealand's meat product exports to Egypt, the Ministry for Primary Industries (MPI) said today. Under the new arrangement, Egyptian authorities will no longer have to visit each individual meat premise that wishes to export to Egypt.
The arrangement was signed by MPI Director-General Martyn Dunne and Egyptian Deputy Minister for Agriculture Dr Mona Mehrez in Wellington.
"This the first time Egypt has agreed this type of arrangement with any country, and is a clear demonstration of the strength of New Zealand's meat regulatory programme and our good relationship with Egypt that has developed through years of export, engagement and audit," says Mr Dunne.
"It's pleasing New Zealand's meat regulatory programme meets the expectations of the Egyptian Government. New Zealand has a world class meat regulatory programme, and signing of the arrangement with Egypt further reinforces this"
The signing was part of a visit by Dr Mehrez and a delegation of senior Egyptian veterinarians to learn about New Zealand's meat regulatory programme and explore opportunities for collaboration.
This arrangement will make it easier for New Zealand exporters to access the important Egypt market for New Zealand meat products. In the year to 30 June 2017, we exported about $52 million worth of meat products to Egypt.
"New Zealand is proud of its long history of agricultural exports to Egypt," says Mr Dunne. "We are committed to growing this important trade, a key part of which is through simplifying exporting processes. This arrangement is a great example"
"Both New Zealand and Egypt have committed to working together to identify areas we can cooperate in, particularly in animal health and husbandry," says Mr Dunne.
"We look forward to deepening New Zealand's trading relationship with Egypt even further through sharing our respective knowledge and experience"
Dec 04, 2017 - Eagle-eyed planespotters are noticing increasing visits by cargo planes to Christchurch Airport at the moment. This signals the start of the key export season and highlights the valuable contribution local producers and exporters make to the local economy. Tasman Cargo Airlines National manager Gerry Bray says the company's Boeing 757 Freighter came into Christchurch last Sunday, bringing a variety of goods to the South Island.
He says it left with a range of high value fresh produce bound for Auckland, Sydney and beyond.
"The B757F has a payload capability of 32,000kgs and the aircraft moved nearly 24,000kgs of Sydney-bound general and perishable cargo on the first service" he says.
"The charter flight operated we operated last weekend was the first of many we hope to operate over the coming summer months," he says. "The aircraft will visit Christchurch at least weekly through December.
"It signals the start of the South Island's peak perishables export production season, with air freight in high demand for all primary producers from dairy, to fresh meat, to stone fruit and more," he says.
Christchurch Airport's Chief Aeronautical and Commercial Officer, Justin Watson, says in the year ended June 2017, more than 30,000 tonnes of air freight transited through the airport.
"Indications already suggest a bumper season of South Island exports," he says. "Our international airline partners, including Air New Zealand, Singapore Airlines, Qantas, China Southern Airlines, Emirates and Cathay Pacific, are also taking freight out every day to some of the world's leading hubs, such as Sydney, Hong Kong, Singapore, Dubai and Guangzhou.
"We anticipate a repeat of peak demand for high quality South Island produce for Chinese New Year, with extra flights this year taking cherries, chilled meat and live crayfish, among other things, to dinner tables across Asia."
| A Christchurch Airport release || December 4, 2017 |||
Nov 30, 2017 - Amazon's arrival in Australia brings with it opportunities for New Zealand firms writes Wellington consultant Hamish Conway in his company, Sell Global blog. Amazon is in 11 marketplaces around the world, with 123 fulfilment centres, and buying customers in 189 countries. The States is the biggest, with the UK able to fulfil to the other 26 European countries. They’re in Japan, and China but they’re having a tough time in China. AliBaba and the WeChat Group just dominate the Chinese market, with Amazon only having something like a 5% share of the market and consistently struggling there.
So, that’s all interesting, but obviously they are about to arrive in Australia. I was recently in Australia meeting with Fabio, from Amazon, who’s setting it up and running it, and they’re hiring now, looking towards a late November/December launch. Initially this is going to be a soft launch. They don’t want to over promise and under deliver around Christmas time.
Certainly a Q1 start is when it’s going to be happening. But, they have been building the catalogue over the next few months. They are getting their catalogue full, so when they do launch, this is a great opportunity for New Zealand companies that want to really stamp their mark on the Australian market, using Amazon as a channel.
Getting in early on Amazon, and getting on that page one should be the goal of all product selling companies in NZ. 86% of sales come from being on a page one search. Getting in first, and putting your stake in the ground and going, “right, I’m going to claim the peanut butter category on Amazon,” or whatever that category might be is going to be a huge advantage. Getting there and keeping it is far easier than coming in late and trying to claim that spot.
There are all sorts of categories that’ll just be open for business. According to a recent survey, one third of Australians who shop online, which is millions of people, they have said that they will switch to Amazon. They’ll definitely be looking at Amazon when it arrives. I suspect it would be more than that once it does launch, and they start to prove their worth. Amazon is going to really change the landscape. Not only in Australia, but in New Zealand as well. They look at Australia and New Zealand as one. New Zealanders will be buying from Australia.
Amazon has its own products that they sell, largely the tech products, like Alexa and Kindle. They will also buy products from you, like wholesale. So, if they like the look of your product, they’ll go we’ll buy that. They’ll pay you as little as possible, and take for as long as they can to pay you. But enough people do that because they just think that that’s the right way to go. Actually Amazon doesn’t really look after it that well, but they do it. If you look at some products on Amazon, it’ll say “Ships and sold by Amazon” even though it’s a brand you might be aware of. Or, you can be a third party seller, of which any third party sellers can go and set up their products on Amazon.
The products that are currently in America don’t necessarily end up in Australia, so it’s going to be a whole lot of new products that are Australia and New Zealand centric. People from the States or from Asia will be sending products down to Australia into the Australian warehouses there for purchase. People probably still could shop in America for awhile, but once the inventory and catalogue builds up over time, as more suppliers or third party sellers put product in, that’s when it’s going to become bigger and bigger, and a really great opportunity for New Zealand and Australian businesses.
What is the impact from that? If you are a retailer, a brick and mortar retailer, it’s absolutely a problem. If you are a brand owner it’s good news. Being on Amazon gives you so much free traffic, and free brand awareness. For small companies breaking into Australia, it has previously been quite a tough gig, going through the traditional approach and maybe trying to get into supermarkets or through big pharmacy chains, or whatever it might be with what you’re selling. Being on Amazon, people are searching and if you’re there then they’re seeing your brand.
If you control your brand, and the distribution of it, and you’ve got your own e-Commerce store as well, Amazon is going to be a major support for that. If you’ve got products that you don’t control the distribution of then you’re in trouble. The bottom line is that it’s a huge opportunity for any business, whether they’re small and just getting going, or bigger businesses, who will need to be there, and be protecting their brand on that platform. If you aren’t selling your products on Amazon, other companies, other people, other distributors might start selling it there instead.
Nov 30, 2017 - Zespri Shipping Manager Mike Knowles says Seatrade has decided to exit the Meridian shipping routes to Northern Europe and East Coast North America. CMA CGM has agreed to step in and provide uninterrupted service on these routes for New Zealand exporters. “We’ve partnered with Seatrade for many years and enjoyed excellent and loyal service from the company for which we thank them."
“While it’s sad that they won’t be operating in New Zealand anymore, we’re confident that CMA CGM will run an excellent service for the NZ kiwifruit industry in future. CMA CGM will provide a fixed-day weekly service with a best-in-class 32-day transit to Zeebrugge next season which is based around the purpose-built Seatrade colour class ships and water-cooled containers."
“This service is based on the FDD principle (Fast, Dedicated and Direct) and we’re confident that this service will be successful for both parties."
The announcement has been welcomed not only by the kiwifruit industry, but by many NZ perishable shippers as well who want to get their goods quickly into this key European market.
| A FreshPlaza release by Rachel Lynch || November 30, 2017 |||
Nov 29, 2017 - KORU® is a new apple variety which has been grown in New Zealand for a few years now and exported to the US market. Now it is also being grown in the States and the area will increase considerably in years to come writes Nichola Watson for FreshPlaza.
"We import this apple in February and March," explains Jim Allen from New York Apple Sales. "Now we are growing it in the States too. It is an excellent eating apple, a cross between the Braeburn and Fuji apples. The Fuji gives it that high flavour and sugars and the low acid Braeburn combines them together."
Jim was at the Amsterdam Produce Show promoting the KORU® apple as it is also sold in Europe. "We are planting heavily in the US and have already harvested the New York and Washington state crops. We are in a group of three different marketers who have the right to market the apple for a grower's cooperative group who have the right to grow it. This year we harvested between 700 and 800 bins in New York and 1,500 bins in Washington state. Volumes will be increasing threefold each year in the States, just as they are in New Zealand."
The current New Zealand production is around 160,000, by 2020 they are looking at 300,000. It is a good yielding variety and a good sized apple which colours very nicely.
"We have been importing it now for 3-4 years," said Jim. "This is our second year of domestic production and KORU® is in the major retailers such as Walmart, Cosco and others. It is a hard apple which holds up very well and we are very excited about it. We think it is one of the best new apples around."
US production starts in October and runs through to January, then in February and March apples are imported from New Zealand. "What we have done this year is put some of our domestic crop in storage, we expect to bring those out a month before the new season starts. New Zealand stocks will last until August - September making an almost year round supply. This is the first year that we have put a lot in CA storage, but we have a lot of confidence that the quality will still be very good, the characteristics of the apple already point to a great storage apple."
Nov 24, 2017 - New Zealand structural log prices rose to the highest level in 24 years and A-grade export logs hit a record as local mills compete with the export market to secure supply for the domestic construction market amid strong demand from China.
The price for structural S1 logs increased to $130 a tonne this month, from $128 a tonne last month, marking the highest level since 1993, according to AgriHQ's monthly survey of exporters, forest owners and saw millers. Export log prices lifted between $2-to-$5 a tonne for the majority of grades, with the price for A-Grade logs touching $128 a tonne, up from $127 a tonne last month and the highest level since AgriHQ began collecting the data in 2008.
New Zealand is experiencing strong demand for its logs from China, which has clamped down on the harvesting of its own forests and reduced tariffs on imported logs to meet demand in its local market. AgriHQ said Chinese demand for softwood logs remains strong, lifting back to record levels in the latest data for September with Chinese imports of New Zealand logs currently tracking 10 percent ahead of last year.
"Those trading in the domestic log market are continuing to receiver near-record returns and there's nothing to signal that this situation will change anytime soon," said AgriHQ analyst Reece Brick. "Looking forward, all prospects will be determined by the direction the export log market takes."
Brick said wharf gate values climbed through October and early November and will likely hold high until the Chinese New Year period. Also known as the 'spring festival', the Chinese New Year falls on Feb. 16 next year, and the festival will last until March 2, about 15 days in total. As an official public holiday, Chinese people can get seven days' absence from work, from Feb. 15 to 21.
"Beyond that point, it's still a wait-and-see situation," Brick said.
He noted the latest situation and outlook report released by the Ministry of Primary Industries continues to shed a positive light on forestry's prospects over the next two years.
"They predict strong Chinese interest in logs over the short-medium term, underpinned by its ban of commercial logging of natural forests, falling Russian log supplies, and a 2 percent reduction on its imported log tax."
Brick said "the only proper negative" when it comes to the export market is shipping rates, which are rising faster than log values. However, this was being masked by a weaker New Zealand dollar, he said.
"There is still a level of uncertainty as to whether shipping rates have reached their peak or have a little more upswing to come," Brick said.
Still, he said "in terms of market fundamentals it is all still quite positive."
Nov 24, 2017 - Australia has reiterated the importance of New Zealand to its foreign policy direction in its latest white paper, with particular emphasis on the role it sees New Zealand playing in its economic engagement with Pacific island countries. In the Australian government's 2017 foreign policy white paper, released this morning, the relationship with New Zealand is described as "our most comprehensive" and the authors say Australia is committed to deepening it further.
Australia sees itself as "delivering a step change in our engagement with Pacific island countries", with an aim for "more ambitious engagement, including helping to integrate Pacific countries into the Australian and New Zealand economies and our security institutions". Its long-term angle is a region-wide free-trade area that includes all major economies.
The partnership with New Zealand will be central to advancing that agenda, the white paper says.
"New Zealand will remain an essential partner in support of the economic growth, stability and security of the region. Australia and New Zealand will align our approaches to the Pacific," the paper says. "Our cooperation has wider regional and global dimensions. We have high levels of police and military interoperability and collaborate on strategic planning, capability development and intelligence. This will continue to be essential to prosecuting shared interests, including in the Pacific."
The paper discusses the Pacific Agreement on Closer Economic Relations (PACER) Plus, an agreement signed in April this year by New Zealand, Australia, Cook Islands, Kiribati, Nauru, Niue, Samoa, Solomon Islands, Tonga, Tuvalu and Vanuatu. It built on existing trade deals and will come into force in mid-2019. As part of PACER Plus, both New Zealand and Australia committed to spending at least 20 percent of official development assistance as "aid for trade" in the Pacific region, to help address supply-side constraints and build Pacific island countries’ capacity to trade.
"Economic integration within the region and with Australia and New Zealand is vital to the economic prospects of the Pacific," the paper says. "Growth is constrained for most countries because of a combination of remoteness from markets, limited land and resource bases, the dispersal of people over many islands and environmental fragility.
"When in force, [PACER PLUS] will lay the ground for stronger trade and investment, increasing business confidence through transparent and enforceable rules. Australia will work to improve opportunities for growth and jobs and to strengthen the economic resilience of the region by increasing opportunities for labour mobility to satisfy unmet demand in our labour market, investing in skills, and helping countries to capture growth potential in sectors such as tourism."
The paper stresses the importance of Australia's relationships with the US and China for its interests in the Pacific, and its drive to forge closer relationships with both, even as the two super powers jostle for dominance in the Pacific region. New Zealand is still Australia's biggest tourism market, with 1.4 million Kiwis visiting the country in the latest year, but China was close behind at 1.3 million and had a growth rate of 10 percent compared to New Zealand's 2 percent.
Australia's alliance with the US is central to its approach in the region, and it will broaden and deepen its cooperation with that country, but the government is "committed to strong and constructive ties with China" and wants to strengthen its partnership there as well.
"To support a balance in the Indo–Pacific favourable to our interests and promote an open, inclusive and rules-based region, Australia will also work more closely with the region’s major democracies, bilaterally and in small groupings. In addition to the United States, our relations with Japan, Indonesia, India and the Republic of Korea are central to this agenda," it said.
Nov 21 2017 - New Zealand hopes to be exporting fresh avocados to China soon after talks to meet regulatory requirements. A protocol has been signed between the Ministry for Primary Industries and China's General Administration of Quality Supervision, Inspection and Quarantine.
AQSIQ will audit New Zealand's system for exporting avocados in mid-December.
New Zealand already exports fresh apples, kiwifruit, cherries, plums, citrus and persimmons to China and it's hoped a significant market can be built for avocados.
In the 2016/17 season, New Zealand produced a record 7.9 million trays of avocados worth more than $200 million.
About $155.5m worth of avocados were exported to markets such as Australia, Japan, Singapore, Korea and Thailand.
"China is very aware of the significant global increase in avocado consumption, the associated health benefits and the strong growth and huge potential in the avocado category," says New Zealand Avocado chief executive Jen Scoular.