US tariffs threaten NZ horticulture exports
"Unwelcome" is how the chief executive of the Horticulture Export Authority (HEA), Simon Hegarty, describes the 15% tariff that the US has imposed on primary exports to that country.
That's one of the findings of a group of horticulture exporters who visited the country last month.
The 'reconnaissance mission' before Christmas included representatives of kiwifruit, apples and pears, onions and avocado sectors, and the Horticulture Export Authority.
One of the organisers of the trip, Onions NZ chief executive James Kuperus, says the main purpose of the trip was to be there to look, learn and listen and find out how everything in India operates.
"And that's what we achieved," he told Rural News.
Kuperus says that firstly people shouldn't look at India as a substitute market for China. He says the two are completely different in terms of their markets, their economies and their way of operating.
"But what is clear is that the Indian economy is doing extremely well and, with the increased purchasing power, some Indian consumers are changing their habits and buying more imported products and that is positive for NZ horticulture.
"But we have to be realistic and understand that it is a market that will evolve over time," he says.
Kuperus is quick to point out an important factor that NZ will have to navigate: that India has hundreds of millions of farmers who form a significant voter block. He says any policy direction around trade that could impact on their prosperity would be difficult for the Indian government.
"NZ can't assume that it will have more liberal trade with India because we want it. We need to invest in the relationship first and foremost and develop that over time rather than expecting a quick liberalised trade agreement," he says.
Another factor that will need to be resolved before NZ can export some of its high value horticultural crops in India is to get a direct air freight link there. Currently NZ apple and kiwifruit exports attract a tariff rate of 50% and 30% respectively.
Kuperus says the full potential of the Indian market probably won't be realised until the air link is in place - something he believes is not that far away.
Good Season
The onion harvest in NZ is now underway and is expected to reach its peak soon.
James Kuperus says the quality of the crop looks good which is important for the export trade. He says quality is something that NZ prides itself on.
Overall, the growing season for the crop has been good despite some cold wet weather in some regions which slowed growth a little.
"It hasn't been a home run of a season but most people describe the weather as being kind and forgiving," he says.
On the export front, the early news is encouraging with good interest from Taiwan in particular. But the biggest gain has been the coming into force of the NZ/EU FTA which has seen the 9.6% tariff on our onion exports there removed - a saving of $3 million a year to NZ growers. Kuperus says the industry is very grateful for the work of politicians and trade negotiators who secured the FTA.
