Thursday, 07 February 2019 09:47

Too many eggs in China's basket?

Written by 
Doug Steel. Doug Steel.

China's market share of NZ’s primary exports is material and raises the issue of concentration risk, says BNZ rural economist Doug Steel.

Read: Bank picks flat prices for 2019.

“For agricultural and forestry products overall, China accounts for about 28% of NZ exports. 

“It’s not nearly as much concentration as NZ ran with the UK prior to the 1970s, but it’s not insignificant. Of course, this doesn’t mean NZ shouldn’t sell more produce to China just because it already sells a lot there,” he explains. 

“But it does pay to be aware of the rising concentration and potential fallout if conditions were to deteriorate rapidly in that market and plan accordingly.”

Meat has seen big Chinese market share changes over recent times, including last year. 

“China now takes 30% of NZ’s sheepmeat exports and 24% of beef exports. Ten years ago these shares were 3.2% and 0.1% respectively. 

“Most recently, African swine fever in China may have generated extra demand for imported meats including beef and lamb, as consumers look to replace any shortfall in domestic pork supplies,” Steel says.

“Gains in China’s market share for NZ sheepmeat has also coincided with the UK’s share dipping sharply after the June 2016 Brexit vote. The EU’s share has drifted lower.”

Bank picks flat prices for 2019

More like this

Cold comfort

One of the most galling aspects of the tariffs whacked on our farm exports to the US is the fact that, now more than ever, US farmers are being propped up by government welfare – a direct result of Trump’s hardline on its trading partners.

Strong wool eyes China

China looks set to play a key role in helping the New Zealand wool sector shift away from trading as a commodity supplier.

Featured

McClay: “Go hard, go fast!"

Opening a new $3 million methane research barn in Waikato this month, Agriculture Minister Todd McClay called on the dairy sector to “go as fast as you can and prove the concepts”.

$2b boost in NZ exports to EU

New Zealand’s trade with the European Union has jumped $2 billion since a free trade deal entered into force in May last year.

National

Machinery & Products

» Latest Print Issues Online

The Hound

Red faced

OPINION: The Greens have taken the high moral ground on the Palestine issue and been leading political agitators in related…

Cold comfort

One of the most galling aspects of the tariffs whacked on our farm exports to the US is the fact…

» Connect with Rural News

» eNewsletter

Subscribe to our weekly newsletter