Ukraine conflict will impact NZ

O'Connor says it will have a massive flow-on effect, the consequences of which we still don't fully understand. He says Russia, like NZ, is a big exporter of food and that country's inability to produce the food it normally does will impact on international food markets.

"It might see a short-term uplift in prices, but NZ won't gain anything long term from this conflict and the kind of disruption that we will see is harmful to international trade and relations," he told Rural News. "The impact on costs across the globe - through supply chain disruption and shortage of raw materials - means that we are in for some volatile times."

O'Connor adds that the latest outbreak of Covid in China is also a worry given that it is our single biggest market. There are reports of ports being closed and this is likely to cause disruption to NZ exports.

He says the other consequence of the Russia/Ukraine conflict and the possible short-term upsurge in export prices is the impact this may have on food prices in NZ. Prices in NZ are closely linked to international prices and there are fears that some food prices to consumers may rise further.

O'Connor admits this is an issue.

"It's a challenge for all of us in the food procuction sector that all New Zealanders have access to affordable food that is one of our primary responsibilities even at time of record returns.

"We can't have NZ going hungry when the vast majority of food we produce is sent off shore. Everyone is going to have to exercise social responsibility and work creatively and innovatively to deal with this issue."

EU FTA Still Months Away

On his recent overseas trip, Damien O'Connor had talks with EU politicians and officials to try and breathe some oxygen into the FTA currently being negotiated.

However, progress to date has been slow - compared with the speedy resolution of the UK/NZ FTA.

Internal EU politics is complicated and while the trade talks are seen as important, things such as the French elections and more especially the Russian/Ukraine conflict are distracting factors for the talks.

It seems that a deal will not be agreed to anytime soom with O'Connor conceding it will be the latter part of the year before any progress will be seen. He notes that both sides are reluctant to put a deadline on when a deal may be reached. However, he still remains optimistic that agreement can be reached on some of the harder issues such as agriculture.