17 Nov 2017 - Dealing with irregular bearing is a problem the New Zealand avocado industry needs to solve, according to AVOCO the nation's largest marketing company for the fruit. Martin Napper, Export Marketing Executive at Primor Produce, part of the AVOCO venture which owns the AVANZA brand, says at a time when consumption and demand is increasing strongly, the market still provides some inconsistency.
"At the moment it seems that we spend one year building markets and the next apologising for short supply," Mr Napper said. "A very frustrating situation especially when demand is so strong in all of our markets and many other markets AVANZA is yet to enter, such as Taiwan and China. With larger crops expected over time a lot of research is being directed toward this (irregular bearing)."
AVOCO is a joint venture marketing company between Primor Produce Ltd and Southern Produce Ltd. AVANZA is a brand of AVOCO used in markets outside of Australia, which is the major export market at around 80 per cent. It also supplies to Asian markets including Korea (7%), Japan (5%), Singapore (3%), as well as small volumes to Thailand, Malaysia, and India.
Mr Napper says AVOCO volumes are half that of last year, but values are up around 30 per cent. Some reasons behind this is the lower than predicted volume from within Australia has seen the Australian market a lot firmer than expected for this time of the year, with current values usually seen in January and February when Australian volumes are at their lowest. He anticipates prices staying firm with retail prices currently at AU$3.90/piece which challenges consumption.
The Export Marketing Executive adds there are plenty of positives, with higher returns and optimism in the category has seen about 1,000 hectares of new plantings over the past year, meaning there is currently a three year waiting list for trees. In addition, early forecasts are encouraging for a bigger crop in 2018 as well as China market access is close with protocols ready to be signed-off soon. This access could in time open up a big opportunity for New Zealand.
"The country's avocado industry is a very cohesive industry able to adapt quickly to customer export requirements, such as nil detectable chemical MRL’s in Korea and new China protocols," Mr Napper said. "With a quality offering it is well placed to take up future opportunities for growth. Avocado continues to defy gravity with its popularity and social media interest."
AVOCO/AVANZA’s share of New Zealand industry is around 64 per cent, and the company is also reporting that industry export volumes are around half of last year; 2.5million (5.5kg) trays compared with 4.8m last year. But he sees plenty of future opportunity in the medium to long term for expansion in the company's major market, to meet the rapidly growing demand across the Tasman.
"There is still some industry uncertainty as to final crop volume," Mr Napper said. "In Australia we are flowing fruit to fit programmes through to late February. Australian consumption just keeps on increasing and it is predicted that with an increase in per head consumption from 3.5kg to 5kg coupled with increasing population growth they will move from the current 16 million trays to 24 million over the next 8-10 years. With seasonality of supply, a proportion of this demand will need to be supplied from New Zealand."
Korea has also shown rapid growth from 250,000 trays three years ago to 500,000 last year and now fast approaching 1 million trays this year from all origins and at good value, including New Zealand, California and Mexico. Mr Napper says Korea is a good market for AVANZA as it prefers large size fruit, which suits New Zealand’s crop profile.
16 Nov 2017 - The International Energy Agency’s new forecast that demand for natural gas will increase 45% by 2040 is a major opportunity for New Zealand, says the Petroleum Exploration and Production Association of New Zealand (PEPANZ). “Global demand for natural gas is only going to grow because it has half the greenhouse emissions of coal. This means that producing and exporting it from New Zealand has the potential to be a win-win outcome for global emissions and for our economy,” says PEPANZ CEO Cameron Madgwick.
“The report clearly highlights the role natural gas can play in reducing emissions by replacing coal in industrial processes and power generation. This reinforces the need for new exploration and development of our natural resources, benefiting New Zealand and the world.
“Liquefied natural gas (LNG) is going to be a major growth industry and this is great news for New Zealand given our potential deposits.
“Much of the demand is likely to come from China, India and other Asian countries. Other nations are eager to meet this demand and by the mid-2020s the United States is projected to become the world’s largest LNG exporter.
“This is an export industry New Zealand can and should be a part of. It could mean more jobs, exports and earnings for the Government through royalties and taxes.
“Taranaki is the only region currently producing but we know other areas have great promise. The recent report by New Zealand Oil and Gas looked at the Barque prospect off the coast of Oamaru and predicted it could generate $32 billion in taxes and royalties for the Government over the life of the field.”
The International Energy Agency also forecasts that global oil demand will continue to grow to 2040. While fuel efficiency and electric vehicles will reduce use by passenger cars, other sectors such as trucks, planes and shipping will continue to drive demand.
16 Nov 2017 - The NZ deer industry has agreed to support one of South Korea’s largest pharmaceutical companies in its plans to develop and market a product with proven health benefits based on NZ deer velvet. The Chief Executive of Yuhan Corporation Mr Jung Hee Lee, and the Chief Executive of Deer Industry New Zealand (DINZ), Mr Dan Coup, this morning signed a memorandum of understanding in Wellington, witnessed by the Minister of Agriculture Damien O’Connor and the Ambassador for the Republic of Korea, Mr Seung-bae Yeo.
Mr Lee said Yuhan’s objective is to successfully develop, register and market a health food product containing scientifically validated components of New Zealand deer velvet.
“This will be a world-first. In recent years a number of Korean companies have developed easy-to-consume formulations of traditional herbal products based on deer velvet, but none have commissioned supporting research in New Zealand to the same level of detail that Yuhan will do,” he said.
“AgResearch and Yuhan scientists will be working together to build on existing scientific knowledge. AgResearch is recognised internationally for its knowledge of velvet processing techniques, the composition of deer velvet and the potential health benefits.”
Mr Coup says DINZ and Yuhan have a shared interest in the registration of NZ deer velvet as a health food.
“If this is achieved it will further strengthen the reputation of NZ deer velvet as a natural, safe and quality food ingredient in Korea.”
He says DINZ will work with Yuhan to help promote the “New Zealand velvet story” and support the successful launch of its velvet products where appropriate.
“The two parties may also co-fund some specific areas of research and marketing activities, but these will be subject to separate agreements.”
Ms Ashley Kyung-in Chung, head of Yuhan’s food and health marketing team, said the company would be investing a minimum of $1.5 million on research with AgResearch and had budgeted for the substantial costs involved in registering a functional food claim and taking a product to market.
She said Yuhan had chosen New Zealand as the source of velvet because of the country’s transparency on three fronts – the farming environment, animal welfare and the traceable and hygienic supply chain.
“Yuhan is one of the most respected companies in Korea – consumers trust us and trust our partners. We travel the world looking for ingredients that are produced in systems as close to nature as possible and where animals are treated with care – that’s why we have come to New Zealand. Velvet from other countries does not have the same standards as New Zealand.”
As part of its market positioning, Yuhan has also signed an agreement with Alpine Deer Group.
“In our marketing we will be using images and videos of one of Alpine’s iconic high-country deer stations that will be one of our main sources of velvet. Our marketing materials will strongly reflect our connection with New Zealand as both the source of our velvet as well as the technology we are using to bring innovative velvet-based products to the market,” Ms Chung said.
Yuhan Corporation was established as a health company in 1926 by Dr Ilhan New. Today it is one of South Korea’s largest pharmaceutical companies, formulating and marketing high quality and innovative health products.
Yuhan’s 2016 sales turnover was approximately US$1.18 billion. Approximately 9% of its revenue was reinvested into research and development.
Yuhan’s mission is to create a balanced portfolio of health food products and supplements from the most natural sources for every life stage. Yuhan has been awarded the most respected company title in South Korea for the last 14 consecutive years (2017).
Yuhan has 220 highly trained scientists involved in product development and commercialisation.
For more information on Yuhan Corporation, refer to www.yuhan.co.kr
Deer Industry New Zealand (DINZ) is a marketing authority established by the Deer Industry New Zealand Regulations 2004 pursuant to the Primary Products Marketing Act 1953. Functions of DINZ relevant to the MOU with Yuhan are:
a. to promote and assist the development of the deer industry in New Zealand b. to assist in the organisation and development of the marketing of products derived from deer c. to assist in the development of existing and new markets for products derived from deer.
DINZ works closely with New Zealand’s leading Crown Research Institute, AgResearch, and has a joint venture partnership with AgResearch called Velvet Antler Research New Zealand (VARNZ).
14 Nov 2017 - Portland’s year-long effort to attract regular liner services back to Oregon’s only container port took an important step forward Monday with the announcement that Swire Shipping will initiate a monthly service that will carry truck exports to Australia-New Zealand and containerized imports from Asia.
“It’s a first step, but a critical first step,” said Keith Leavitt, Portland’s chief commercial officer.” He added, “This is important to us because we have to demonstrate to the trans-Pacific that Portland is back to work.
In addition to its thriving breakbulk and bulk services, Portland for years was an important gateway for containerized exports from Oregon and western Idaho and imports of consumer merchandise, primarily from Asia. At its peak, Portland handled about 340,000 TEU a year.
Portland in 2012 began to experience labor problems when the International Longshore and Warehouse Union became engaged in a jurisdictional dispute with another union. That event escalated into a bitter, three-year confrontation between the ILWU and ICTSI, operator of Terminal 6 at the time. Productivity plunged as the ILWU engaged in work slowdowns that caused Hanjin Shipping, Hapag-Lloyd, and Westwood Shipping to end their liner services.
ILWU officials in Portland accused ICTSI, an international terminal operator based in the Philippines, of running Terminal 6 as a “third-world” operation. Bill Wyatt, the port’s executive director at the time, said the union was upset because when ICTSI took over operation of Terminal 6 in 2010, it began to pull back on wasteful and inefficient work practices that had been common for the many years that Portland managed the terminal as an operating port.
Leavitt said port managers the past year have had a number of meetings with the ILWU locals and they are confident that a return of shipping services will be greeted with improved productivity. “I feel like we’re in a good spot,” he said.
Swire Shipping, which is based in Singapore, will be in charge of handling containers at Terminal 6 when the service begins operating in January. Leavitt said Swire has no presence in Portland and may contract with a stevedore to discharge and load containers. The port will continue to contract with Harbor Industrial Services for the breakbulk stevedoring work. Port authority staff have been working with the ILWU to get the cranes and other cargo-handling equipment back into good working order, he said.
As a river port with draft limitations, Portland is unable to accommodate the mega-ships of 10,000-TEU capacity and greater that are common today at West Coast ports. Nevertheless, Portland is a good gateway for north-south services and niche carriers that do not operate mega-ships, Leavitt said. The base cargo for the new service will be trucks manufactured in Oregon by Daimler Trucks North America. Portland was once a profitable port for importers of containerized merchandise destined for importers in the region. Importers and exporters have been shipping most of their cargo the past two years through Seattle-Tacoma.
The new service will be triangular, carrying mostly non-containerized cargo and trucks from Portland to Australia and New Zealand. The vessels will steam to China and South Korea and will load containerized imports for Portland.
13 Nov 2017 - Recent changes to the TPP agreement, now called CPTPP, appear to be a step forward, particularly with the potential removal of some of the more controversial parts, such as Investor State Dispute Settlement (ISDS) clauses. Yet, we need to remind ourselves that the primary target of these FTAs is the reduction of tariffs, providing benefits to our primary commodity exporters, but little relief to our high value manufacturers, who frequently encounter obstacles to free trade in the form of non-tariff barriers.
“Non-tariff barriers are the ‘dirty little secrets’ rarely written into trade agreements, but a matter of daily practice far away from glamorous trade talks. And probably, just as harmful to local manufacturers is the almost complete lack of enforcement of product standards in our domestic markets, allowing imported goods to trade on a price advantage. Not to mention government procurement practices that in most cases pay lip service only to the principle of giving local manufacturers a fair chance, says Mr Dieter Adam, CE, The Manufacturers’ Network.
“The removal of some of the contentious parts of the previous agreement is a positive move from the Government, giving the eventual agreement broader support in New Zealand. However, we know from past experience that the really hard work starts once the agreement comes into force, in working to remove the non-tariff barriers that form the biggest challenges for high-value manufacturers making the most of the markets involved, says Mr Adam.
“Quality trade agreements are a vital component of improving our export competitiveness, especially when non-tariff barriers that effect manufacturers are properly addressed. We cannot ignore the fact, however, that in spite of a string of recent FTAs, such as the China and Korean FTAs, the share of exports in GDP has been dropping over the past decade, rather than growing by 25% - the goal the previous Government had set itself not long after coming into power in 2008. As the new Government is rightly pointing out, New Zealand’s future prosperity can only be secured by significantly growing our exports of high-value products and services. And one of the key preconditions for that lies in improving our productivity, which has lagged through successive governments. Improving productivity and thus increasing our ability to create high-value goods and services is where the new Government should focus.
“The other critical enabler to a more balanced approach to growth in our economy is a more favourable and fair exchange rate, especially against the Australian Dollar, given that Australia is a key market for our manufacturing exports. And in that context comments made by the Acting Governor of the RBNZ, Grant Spencer, at the November MPS press conference that “We’re happy with this [the current] level of our currency, it’s in the vicinity of fair value” are certainly not helpful and point to a change from recent RBNZ statements under Graeme Wheeler, setting around 60 cents as a target rate. It will be interesting to see the response of the new Government to this new assessment of ‘fair value’ by the RBNZ. Addressing our exchange rate, which has remained significantly above trends in the previous decade, need to be part of the discussion in the upcoming review and appointment of a new Governor, said Mr Adam.
| A The Manufacturiers Network release || November 13, 2017 |||
12 Nov 2017 - Minister for Trade and Export Growth David Parker has welcomed the 11-member Comprehensive and Progressive Agreement for the Trans-Pacific Partnership (CPTPP) which incorporates the TPP. A Ministerial Statement has been issued today by all eleven Ministers in Da Nang, Viet Nam, which confirms the core elements of the deal are now agreed, with just four issues requiring further technical work and discussion.
"My Ministerial counterparts and I also agreed this week to suspend a number of the most controversial parts of the of the original TPP in the new Agreement,” says Minister Parker.
“At the same time, there will be no change to the goods market access outcomes contained in the original TPP.
“This is a now an improved deal for New Zealand.
“The overall outcome satisfies the five conditions that the Labour-led Government laid out for a revised TPP:
• It achieves meaningful gains in market access for farmers and supports the more than 620,000 New Zealanders whose jobs depend on exports. The CPTPP will also provide New Zealand for the first time with preferential market access into Japan, the world’s third-largest economy, as well as Canada, Mexico and Peru;
• It upholds the unique status of the Treaty of Waitangi;
• It preserves New Zealand’s right to regulate in the public interest. We have also retained the reciprocal agreement with Australia, which is the source of 80 per cent of our overseas investment from this new grouping, that ISDS clauses will not apply between our countries. We continue to seek similar agreements with the other countries in this new Agreement. In addition, the scope to make ISDS claims has also been narrowed;
• The Pharmac model continues to be protected. Further improvements now achieved include suspension of patent extensions which could have increased the cost of medicine to the government; and
• The ability to control the sale of New Zealand homes is being preserved by separate legislation in New Zealand.
“New Zealand will now be focused on working together with our partner countries toward signature, including on the four specific items to be finalised by the date of signature of the new Agreement.
“I expect negotiators will need to meet again in the next few months to take this forward.
“In the meantime, I want New Zealanders to have the opportunity to understand what has been agreed and what it means for them, their families and their country, before anything is signed or ratified.
“Like all free trade agreements, the Foreign Affairs, Defence and Trade Select Committee will scrutinise the CPTPP and Parliament will consider the necessary legislative changes needed to give effect to the agreement.”
The CPTPP was negotiated between Australia, Brunei Darussalam, Canada, Chile, Japan, Malaysia, Mexico, Peru, Singapore, Viet Nam, and New Zealand.
The four remaining specific items to be finalised by the date of signature are included at the end of the list of suspended provisions. Beehive.govt.nz
9 Nov 2017 - New Zealand’s exports in semi-processed casings are set to resume in the next few weeks following successful talks between New Zealand and China. Semi-processed casings are thin tubular cases used as sausage skins. Agriculture Minister Damien O’Connor says trade discussions have been successful.
“The Ministry for Primary Industries and Chinese authorities have successfully completed talks to enable exports of semi-processed natural casings from New Zealand to China to resume.
“In 2013, New Zealand voluntarily suspended exports in semi-processed casings in response to discussions with Chinese authorities about the processing steps for these casings.
"New Zealand was able to provide information to Chinese authorities and work with them on revised certification requirements to enable trade to resume next month,” says Damien.
“International trade is built on good working relationships between countries and I’m pleased that trade in semi-processed casings will resume soon.
“Natural casings from New Zealand have traditionally been in high demand in China.
“New Zealand currently exports fully processed casings to China. Access for semi-processed casings will provide industry with opportunities to increase export value and returns.
“China will be a significant market for our semi-processed casings, with exports expected to exceed $100 million.
“This progress is further demonstration of the positive relationship New Zealand shares with China."
8 Nov - Auckland's largest trade delegation, totalling almost 100 delegates from 70 businesses, is convening in southern China for talks on growing the regional economy. Also taking part in the Tripartite Economic Alliance Summit from Wednesday to Friday is host Guangzhou and Los Angeles. "Businesses clearly see the advantage of interacting with our two sister cities at the summit," said Mayor Phil Goff, who is leading the Auckland delegation.
"Each are gateway cities to two of the most important and powerful economies in the world."
Mr Goff, Guangzhou Mayor Wen Guohui and Los Angeles Deputy Mayor Jeff Gorell will be among 830 representatives attending.
The Tripartite Economic Alliance, signed in November 2014, is designed to increase economic, trade and investment opportunities for local businesses.
"The summits provide real economic value and jobs to Auckland with deals ranging from hundreds of thousands to millions of dollars sealed as a result of the past two events," Mr Goff said.
Although Guangzhou will be the last of three summits, the parties have agreed to extend the relationship for three more years with opportunities for interaction outside the formal summit process.
8 Nov - Trade and Export Growth Minister David Parker says the Government will not shrink away from New Zealand’s leadership role on free trade - but it must be on our terms. Before heading to Apec, Parker spoke to Sam Sachdeva, Newsroom's Foreign Affairs and Trade EditorNewsroom's Foreign Affairs and Trade Editor about taking on “the excesses of globalised capital” and avoiding a public backlash. Befitting his status as one of Labour’s policy wonks, David Parker has been handed an array of challenging roles.
The economic development and environment portfolios, both areas where the Government has some ambitious plans, would be challenging enough, with the Attorney-General position adding more work again.
Yet Parker’s toughest role may be as Trade and Export Growth Minister, where he will be tasked with satisfying the scepticism of supporters regarding free trade deals while placating exporters and the business community.
Early signs have been positive, with a ban on foreign buyers fulfilling Labour’s pre-election pledge without jeopardising TPP talks and existing trade deals (with the exception of Singapore). Yet tougher obstacles may lie ahead.
FTAs 'sexy' but not enough
Under the previous National government, trade ministers Tim Groser and Todd McClay made a virtue of signing New Zealand up to as many free trade agreements as possible.
The Trade Agenda 2030 strategy, unveiled by McClay earlier this year, set a target of having 90 per cent of New Zealand’s exports covered by FTAs.
Parker is less convinced, saying of FTAs: “They’re sexy but they’re not the be-all and end-all.”
“Exports could go down and you could still meet that [90 per cent] target - FTAs are not the driver of investment in the new products and services that we need to sell to the world.”
A free trade agreement (FTA) between India and New Zealand has stalled, with one official describing the deal as surviving on “life support” write Shane Cowlishaw and Sam Sachdeva for Newsroom
While the focus is currently on the looming TPP deal and how that will be affected by New Zealand’s decision to ban foreign property buyers, it had been hoped some progress could have been made towards a deal with India, the world’s second most populous country.
Last year, then-Prime Minister John Key visited India and after meeting his counterpart Narendra Modi said great progress had been made.
"They were the most forward-leaning statements around a free trade agreement we've heard from the Indian government. (Modi) wants to make progress relatively rapidly and he wants it to be comprehensive," Key said at the time.
"Prior to coming here we weren't really going anywhere on the FTA - now you've got some very clear direction."
Despite that direction, no progress appears to have been made in the year since.
Several diplomatic and trade officials spoken to by Newsroom in India said there had been no movement and work was barely sputtering along on “life support”.
Dairy was the issue, with Indian businesses wary of letting New Zealand into the market and little chance of a change in stance.
A more plausible scenario was working towards a bilateral or multi-country deal involving Sri Lanka, and sending New Zealand goods to India through the close neighbour which had its own FTA with India.
Speaking to Newsroom in New Delhi, New Zealand’s High Commissioner to India, Joanna Kempkers, said there had been 10 rounds of negotiations between the two countries but admitted the deal was on a “slow boil”.
“It would be fantastic for New Zealand and it’s one of our key objectives but we’re realistic to the difficulties of that because, while New Zealand ourselves might not be a problem, we do have some sensitive sectors, dairy being one of them.”
While there were some “commonalities” between the New Zealand and Indian industries, there were areas where New Zealand could be of particular value, she said.