MPI’s Diana Reaich: Building global trade relationships
Relationships are key to opening new trading opportunities and dealing with some of the rules that countries impose that impede the free flow of trade.
New Zealand's primary sector exports are expected to increase strongly in the current year, according to the Ministry for Primary Industries.
MPI’s September quarter ‘Situation and Outlook for Primary Industries’ predict primary sector exports will reach $38.1 billion for the year to June 2017 – up 2.4% on the previous year. This is mainly thanks to a 10.1% rebound in dairy exports after two poor years in 2015 and 2016.
However, meat and wool exports show a steep decline, dropping 9.2%.
Looking ahead, primary sector exports are expected to increase 9.2% to reach $41.6b for the year to June 2018, with dairy continuing its strong growth (up 18.5% to $17.4b) and meat and wool recovering slightly (up 1.5% to $8.5b). Most other sectors are expected to post solid growth, with forestry up 5.0%, horticulture up 5.1%, seafood up 6.1%, arable up 7.3% and ‘other’ up 0.8%.
These forecasts are little changed from the previous June quarter ‘Update’.
Dairy prices slipped in the last Global Dairy Trade auction. Overall, the GDT Price Index was down by 1.0%, with whole milk powder down 0.5% and skim milk powder down 5.6%.
The only product that rose in price was anhydrous milk fat, up 5.2%. The average winning price was US$3204 and 35,669 tonnes were sold.
This is the sixth decline out of nine auctions held over the past four months, with the index down by 5% over that period. However, prices are still 16% higher than the same time last year.
This week’s drop was a little unexpected given the impact of wet spring weather on milk production which saw Fonterra reduce its forecast growth in milk collection for the season from 3% to 1%. So far buyers seem unfazed.
Looking ahead, if New Zealand’s milk production remains flat this should provide support for prices but increasing European and US milk production could negate this. Some but not all economists now think Fonterra’s $6.75/kgMS payout forecast will need to be trimmed.
• Nick Clark is general policy manager at Federated Farmers.
According to ASB, Fonterra's plan to sell it's Anchor and Mainlands brands could inject $4.5 billion in additional spending into the economy.
New Zealand’s trade with the European Union has jumped $2 billion since a free trade deal entered into force in May last year.
The climate of uncertainty and market fragmentation that currently characterises the global economy suggests that many of the European agricultural machinery manufacturers will be looking for new markets.
Dignitaries from all walks of life – the governor general, politicians past and present, Maoridom- including the Maori Queen, church leaders, the primary sector and family and friends packed Our Lady of Kapiti’s Catholic church in Paraparaumu on Thursday October 23 to pay tribute to former prime Minister, Jim Bolger who died last week.
Agriculture and Forestry Minister, Todd McClay is encouraging farmers, growers, and foresters not to take unnecessary risks, asking that they heed weather warnings today.
With nearly two million underutilised dairy calves born annually and the beef price outlook strong, New Zealand’s opportunity to build a scalable dairy-beef system is now.
OPINION: Voting is underway for Fonterra’s divestment proposal, with shareholders deciding whether or not sell its consumer brands business.
OPINION: Politicians and Wellington bureaucrats should take a leaf out of the book of Canterbury District Police Commander Superintendent Tony Hill.