Sharechat Logo

NZ primary industry exports seen rising 7.1% this year

Thursday 13th June 2019

Text too small?

The government expects primary industry export revenue will rise 7.1 percent to $45.7 billion in the June year, but predicts growth will be flatter in the future. 

The lift marks the "second straight year of substantial export growth," said Agriculture Minister Damien O’Connor when he presented the Ministry for Primary Industries’ Situation and Outlook report for June 2019 at Fieldays. Export revenue was $42.7 billion in the prior year, up 11.7 percent. 

“Export performance is up nearly $7.5 billion over the last two years. That’s incredibly impressive considering the weakening global economic environment and a rising sense of uncertainty in global markets,” he said. 

Primary industries accounted for 80 percent of New Zealand's merchandise exports in the March year and the sector employs 15 percent of the country's total workforce. 

Dairy sector export revenues are seen rising 5.7 percent to $17.6 billion in the year to June 30, "supported by strong milk production and sustained global demand," according to the report. 

MPI expects that milk production lifted 2.3 percent in the season that just ended. A recovery in global prices, which began in late 2018, will see export revenue growth continue into 2020, supporting relatively strong farmgate milk payouts over the medium term.

Meanwhile, strong red meat prices are forecast to push meat and wool export revenues up 6.4 percent to $10.2 billion in the 12 months to June 30. Lamb export prices and schedule prices are forecast to fall in 2020 but will still remain high.

Prices have been slowly declining from their peak in August 2018, a result of production in Australia recovering from drought to meet growing Chinese demand. 

Total export revenue from forestry is seen at $6.9 billion, up 7.8 percent on the year. Log exports are forecast to reach a record $3.8 billion, led by demand from China raising prices and incentivising harvesting.

That will be an increase of 19 percent from 2018, the fourth consecutive year of robust growth. Export growth is expected to be moderate in the 2020 June year, assuming demand from China will stabilise at current levels, MPI said. 

Horticulture export revenue is forecast to lift 13.7 percent to $6.1 billion, largely on the back of a strong increase in kiwifruit exports. Seafood exports are tipped to be $1.9 billion versus $1.78 billion a year earlier. 

Looking ahead, "because current exceptional price levels are forecast to soften for New Zealand’s lamb exporters, and as volume growth slows in the larger export sectors, we are forecasting export revenues to soften slightly in the year ending June 2020 before gaining moderate momentum over the medium term, supported by the dairy, meat, and horticultural sectors."

It is forecasting export revenue to be $45.65 billion in the year ended June 2020, down 0.1 percent versus this year's forecast. It then ticks up to $46.7 billion in the year ended June 2021 and $47.5 billion the following year. 

(BusinessDesk)

  General Finance Advertising    

Comments from our readers

No comments yet

Add your comment:
Your name:
Your email:
Not displayed to the public
Comment:
Comments to Sharechat go through an approval process. Comments which are defamatory, abusive or in some way deemed inappropriate will not be approved. It is allowable to use some form of non-de-plume for your name, however we recommend real email addresses are used. Comments from free email addresses such as Gmail, Yahoo, Hotmail, etc may not be approved.

Related News:

NZ dollar headed for 1.3% weekly gain on expectations of a Fed rate cut
RBNZ knock-back gives Resolution chance to low-ball AMP - Jarden
Rail hubs may not boost Napier Port log trade
O'Connor looks to overhaul Biosecurity Act, improve animal tracing
Denton Morrell undefended at liquidation hearing
Contact steam to heat Norske Skog pellet business secured
Air NZ to amend booking engine after lawyer’s complaint
Ross McEwan to take helm at NAB
KPMG says bank capital proposals will wreck havoc on dairy farmers
Mild weather saps Vector's June-qtr volumes

IRG See IRG research reports