Exports

Some bright spots in a difficult trading year

Monday May 22, 2017 Dr Ganesh Nana

The year to March was disappointing in terms of revenue from New Zealand’s merchandise exports.  The total of $46.9bn just pipped the $46.5bn of the previous year, but was well down on the peak $49.3bn for the 12 months to September 2014. However, within this static total are components that are painting a dynamic picture of NZ’s export scene.

 

 

merchandise export receipts2

 

 

The largest contributor remains dairy, with just over $11bn having added a respectable $260m over the year. Dairy will be looking to slowly add to this total in light of the slow, but gradual, recovery in milk powder prices.

 

The other big-ticket categories remain meat and forestry – with movements over the year essentially cancelling each other out. The troubled meat sector saw export revenue decline by nearly $600m this year, in contrast to forestry that added close to $520m as it recovered from a patchy 2015.

 

Bigger pluses, though, were registered across the board in horticulture and viticulture sectors. Increases in revenue from kiwifruit, wine, apples, avocados, other fruit and honey exports show a wide-ranging resurgence in non-agriculture primary sectors. Together these categories added a further $550m to annual revenues. Indeed, these expansions are, arguably, more promising as many combine both higher production levels but also product-mix and marketing gains showing through in substantial price increases. For example

  • kiwifruit export returns averaged $3.30/kg in the year to March; up from $3.17/kg last season, and well up on the $2.86/kg received four years ago.
  • apple export returns averaged $1.90/kg in the year to March; up from $1.82/kg last season, and well up on the $1.32/kg received four years ago.
  • avocado export returns averaged $5.58/kg in the year to March; well up on the $5.00/kg received four years ago.
  • mīere (honey) export returns averaged $38.33/kg in the year to March; up from $32.56/kg last season, and dramatically higher than the $17.52/kg received four years ago.

 

miere export price

 

 

The improvement in kiwifruit export prices can be largely attributed to the success of the gold variety in yielding higher prices for the fruit. To a lesser extent, the introduction of new varieties (e.g. Jazz and Pacific Queen) is also a factor in higher revenue yields for apple exports.

 

However, the recent success story is, without doubt, the honey export sector. Revenue has more than doubled in past four years from $150m to now be well over $300m, arising from a close to doubling in price. The explanation, again, is in changes to the product mix – with most of the expansion attributable to the highly-prized and sought after mānuka variety.

 

The other export performance worthy of note is that of mussels and squid with $288m in annual export revenue. This total surged a remarkable $80m (or nearly 40%) over the year, a result of further expansions into Asian markets.

 

In contrast, an over $200m slump in annual wool export revenues, along with a $150m decline in manufacturing machinery exports, resulted in the overall total to effectively stand still.

 

This difficult merchandise trade performance serves to reinforce just how opportune the extraordinary performance of the tourism (as well as other services) sector exports has been.