Sharechat Logo

Dairy rebound tips NZ primary sector exports into growth for 2017, MPI says

Tuesday 4th April 2017

Text too small?

A jump in the value of dairy exports is enough to restore growth to New Zealand's 2017 primary sector exports for the June 2017 year, according to the March edition of the Situation and Outlook for Primary Industries.
Dairy exports are forecast to rise 8.7 percent to $14.5 billion in the 12 months ending June 30, the Ministry for Primary Industries latest SOPI says. That's an improvement from the projection in December when growth of 3 percent was forecast, reflecting rising prices but declining production. The improvement means total primary sector exports are now expected to rise 1.4 percent to $37.5 billion in the year, compared with December's prediction for a 0.8 percent decline.
A pickup in the value of dairy, forestry and horticulture more than offsets a slightly weaker projection for meat and wool in the ministry's latest forecasts. 
"We expect dairy prices to continue to remain relatively stable (at higher levels than in the previous year) over the remainder of the season, buoyed by lower production coming out of the Southern Hemisphere," the ministry says. "In addition, record forestry harvest volumes are expected to drive an increase in log exports, particularly for use in the Chinese housing market."
The ministry echoed concerns cited this year by the Reserve Bank about the rise of trade protectionism as a threat to the New Zealand economy. "Protectionist sentiment is on the rise in Europe and the US, which will have direct effects on New Zealand as these are major trading partners," it said. "There also could be indirect effects through the impact these policies can have on China and the rest of Asia."
Meat and wool exports are forecast to fall 11.2 percent to $8.2 billion in the year ending June 30, reflecting lower production volumes, especially for beef, the ministry says. With record harvest levels, forestry exports are seen rising 5.8 percent to $5.4 billion, driven by strong demand from China for logs and lower shipping costs.
Horticulture exports are projected to rise 3.8 percent to $5.2 billion, driven by apples and wine, spurred by a record apple harvest and strong demand for New Zealand wines, it said. Lower production of green kiwifruit meant overall kiwifruit exports would be little changed.
Seafood exports are forecast to rise 0.8 percent to $1.78 billion as strong global demand combines with declining stocks of major wild fish species to drive up prices. Volume growth would be driven by aquaculture, mainly mussels and salmon, it said. Exports of arable products are forecast to drop 12 percent to $180 million, reflecting low demand for herbage seed and the impact of a strong New Zealand dollar, it said.
Exports of other primary sector products, which include innovative processed foods, confectionery, honey, cereal products, live animals, soups and condiments, are forecast to fall 4.5 percent to $2.27 billion, reflecting a weather-related drop in honey production, the ministry said.
For 2018, total primary sector exports are forecast to rise 9.7 percent to about $41.1 billion, just below the projection in December of $41.2 billion, with the forecast for dairy revised down to $16.8 billion from $17 billion while forestry exports are revised up to $5.9 billion from $5.6 billion.

  General Finance Advertising    

Comments from our readers

No comments yet

Add your comment:
Your name:
Your email:
Not displayed to the public
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:

MARKET CLOSE: Blue-chip stocks Meridian, A2 lead market lower
NZ dollar rises on Brexit hopes, rate cut reassessment
Three not failing, just needs a new owner - MediaWorks CEO
Major investors back new CBL class action targeting directors
Rip Curl purchase a done deal on Kathmandu proxies alone
Comvita chair Neil Craig eyes the exit once he finds a new CEO
Mercury raises guidance on increased storage, high spot prices
Eroad reports strong 3Q sales growth, eyes ASX listing
MediaWorks puts TV business on the block
NZ dollar benefits as preliminary Brexit deal improves risk appetite

IRG See IRG research reports