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FARMERS WEEKLY – farmersweekly.co.nz – July 11, 2022
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Groser upbeat on primary export future Annette Scott annette.scott@globalhq.co.nz WHILE there are challenges ahead for exporters in the smaller countries of the world, New Zealand should not get hung up on disappointing free trade agreements. That was the message from former trade minister and ambassador to the World Trade Organisation (WTO) Tim Groser in his keynote address to farmers at the Silver Fern Farms conference. “Naturally, NZ farmers are interested in what is going on in the world as nine out of ten consumers they supply are not living in NZ.” But Groser says today’s challenges are not just on NZ farms but the ecosystem around us. “We have a first-class system in place that has proven time and time again it has demonstrated resilience. “We will be fine. We will get through this,” Groser said. There will be changes in the macroeconomic environment that will affect NZ. “It is clear now that the tightening cycle has begun. “Peak inflation matters as the higher it is the worse off we are,
but the real thing is the duration of the inflation. “The global macroeconomics are clearly heading south and going to crush demand and we are going to have to work our way through it.” That will be either in food or energy. “The business we are in is food so there’s a natural avenue there.” The geopolitical situation becomes more difficult and challenging and Groser said one thing it will affect is business models. “The more recent political unease will see giant multinational corporates slicing and dicing the supply chain and that will see a move towards somewhat different business models. “It’s just an evolution in a slightly different way. “Don’t believe the doom and gloom that this is the end of globalisation – this is an adjustment to current globalisation.” NZ must trust that the existing system does not fall apart. The WTO is capable of taking some steps forward, albeit baby steps taken at glacier speed. “I’m obviously disappointed with the EU FTA, but it would have
MACRO: Former trade Minister and ambassador to the World Trade Organisation Tim Groser says today’s challenges are not just on NZ farms but the ecosystem around us.
I would love to see us make a model FTA with an African country. Tim Groser From been complete fantasy to think we were going to get something comparable with the UK and Australia. “While NZ has no FTA with China, the US, or the US with the EU and so on, their trade is still governed under the WTO system.
“This basic system is very important for NZ, as out alone we will be gone.” Groser is confident NZ’s farming resilience will pull it through. “Sure, we face global challenges and enormous threats but we have made huge progress in recent years. “I’m sure we will get through with resilience to invest in innovation, keep listening and above all keep faith – let’s celebrate successes. Groser questioned the notion that NZ is too dependent on China. “In the past we had a shocking dependency on, for example, the UK at 50% in 1973.
Less meat exported, but for bigger returns
“At 22% of global exports we are far less exposed to China than we have been in the past. “And we have options – in terms of market diversification we are not in a that exposed position.” As for the likelihood of future FTAs, the biggest challenges are demographic. “China’s population will fall dramatically over the next 40 years. “I think about this trend and what next? “I say Africa, one of four fastest growing economies in the world. “The direction of that massive young population, I would love to see us make a model FTA with an African country,” Groser said.
New biosecurity boss for grain and seed Annette Scott annette.scott@globalhq.co.nz
Staff reporter RED meat exporters may be selling less product, but they are earning more for it according to sales data for May. The Meat Industry Association reports that during the month exporters made more than $1.1 billion in sales, 28% higher than a year earlier, despite a 6% decline in volume. The volume of beef exported was 1% higher but the value of sales was up 34% to $484m. MIA chief executive Sirma Karapeeva says the higher values were helping to absorb the impact of continued market volatility and higher costs. May figures were not an anomaly. “So far this year, we have exported 183,000 tonnes of sheepmeat, which is 14% less than the same period last year. “However, the value of sheepmeat exports so far this year is $2.2b, which is 8% higher than the same period last year.” It is a similar story for beef. “So far this year, we have exported 6% less beef than the same period
for 2021, however the value of beef exports so far this year is $2.2b, which is 29% higher than the same period last year.” Sheepmeat exports to China dropped in May compared to a year earlier, but exports to all other markets increased, particularly to the United Kingdom. Despite the drop in volume, values of exports to China remained strong during May, with the overall FoB value for sheepmeat at $12.74/kg. Beef exports to China increased 27% year-on-year and the 20,794 tonnes was the largest monthly volume so far for 2022. The value of these exports was up 27% to $207m. The 5376 tonnes exported to the UK was the largest monthly volume since March 2020 but due to ongoing supply chain issues, only 8% was chilled compared to 40% per in March 2020. Exports to the United States, down 30% compared to May last year, continues the trend this year of lower export volumes to that market. “This can be attributed to increased domestic US production as a result of drought, impacting the demand for imported beef.”
BUFFER: MIA chief executive Sirma Karapeeva says the higher values were helping to absorb the impact of continued market volatility and higher costs.
Prices for beef remained strong, and the value of exports to the US only dropped 5%, to $125m, compared to last May. Beef prices in all the other major markets remained very strong, and the average FoB value increased to $10.43/kg. It was also another strong month for co-products with exports worth $189m, up 26% compared to last May.
INCREASING workload and regulation have prompted the grain and seed association to expand its team with the appointment of a biosecurity manager. New Zealand Grain and Seed Trade Association (NZGSTA) general manager Thomas Chin said the import and export seed-lot regulatory environment has reached the point of needing specialist management. The association has appointed Cressida Patrick biosecurity manager. She brings expertise in the biosecurity and phytosanitary areas, with a Master of Science from Otago University and 10 years’ experience working with contacts in the regulatory area. Patrick has a good understanding of the challenges and opportunities faced by the
sector, Chin said. “We are delighted to welcome Cress to the association and look forward to working with her,” he said. “Her extensive experience in the regulatory area especially around plant health and market import and export seed-lot processes will be very useful as the association continues to work with official agencies to pursue these critical areas for the benefit of our members.” Patrick said she is looking forward to working with the grain and seed industry. “I’ve had a long working relationship in the horticulture and arable industries and consider this a great opportunity to support the seed and grain sector and make sure they have good advice on emerging regulatory policy, rules and processes,” Patrick said.
