Two rockstars helping to prop up export earnings

Thursday May 05, 2016 Konrad Hurren

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The chatter in New Zealand has been focused on the woes of the dairy industry after successive falls in payouts to farmers and falling demand. With the way some commentary is focussed one would expect the entire export sector to be following suit. However, this is not the case. Bucking the trend,


among other things, has been the unexpected rockstar, wine. During the 1990s wine exports muddled along at under 20 million litres a year. Then, following a period of high growth in volume around 2005 (with year on year rates of up to 72%) coupled with prices of up to $9 a litre our wine export receipts surged. Since then, export receipts for wine have continued to march, briskly, upwards.


Both prices and volumes for wine make up export receipts. As shown, wine export prices have been relatively low, and flat, for the past six years.


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Export volumes, on the other hand, have surged and are expected to continue this trend. A recently released industry report, the VINEYARD REGISTER REPORT 2015-2018, details an expanding wine industry with an increase in area designated for wine production of 2% p.a. up to 2019.


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Wine has been helped by the small furry kiwifruit. The PSA virus outbreak was well covered and resulted in a sharp contraction of earnings for kiwifruit exporters. Since that crisis export receipts from kiwifruit have not only recovered, but have skyrocketed past historic highs.


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