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obal agribusiness earch analysts aring market outlooks
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RURAL NEWS // JULY 17, 2018
MARKETS & TRENDS 23
COUNTRIES
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900,000
50,000,000
720,000
40,000,000
540,000
30,000,000
360,000
20,000,000
180,000
10,000,000
0
trays exported
Peru Avocado Exports to Key Asian Markets and World
trays exported
0 2011
2012 China
2013
2014
China / HK
2015 Japan
2016
2017
World (RHS Axis)
Source: UN Comtrade, Rabobank 2018.
risein in both avocado and exports, absolute growth of over 30m export trays have for the period theA significant 20% lift New Zea-production deals they negotiSince 2011,with Peru avo2011-2017. land’s wool exports for cado exports have growth ated. Peru is already an the season to May 2018. from around 15m trays Although a big year-onto over 44m in 2017. This year gain, export volumes is an absolute growth of still trail 2015/16 (Juneover 200%. The main May) shipments by 14. markets remain NetherNZ/US dollar Cross Rate On the other hand, wool lands, Spain, the US and 0.76 finer than 28 micron has the UK. performed strongly and Sales to countries in 0.74 offers for both 27 and 28 Asia have risen signifimicron wool made some cantly, from below 1% in 0.72 strong gains in the later 2011 or 23,000 trays, to 0.70 South Island sales. The 4% in 2017 or 1.8m trays market in Australia was over the same period. 0.68 electric through May. Of particular interest to New Zealand grow0.66 ers, will be how Peru and Horticulture others – such as Chile PERU CONTINUES to and Mexico – pursue new grow its avocado producSource: RBA, Rabobank 2018 markets under free trade tion and export markets.
established exporter to China – a relatively new market for NZ – and has this year begun exports to India, with the first sea freight shipment due to arrive in early July 2018. Peru recently hosted South Korean officials to continue work on satisfying phytosanitary requirements for entry into South Korea. South Korea and other Asian markets are a focus for NZ avocado exporters as part of a diversification
strategy away from Australia, which comes off the back of Australia’s domestic production growth and other Southern Hemisphere producers seeking market access into Australia.
Exchange rate AFTER TREADING ground in May, the $NZ resumed its slide against the $US in June, losing US cents 2.5 during the month. As Americans were toasting 4 July, NZ
NZ Dollar Slides Further in June
NZD/USD
season has come to a close, with the coarse crossbred market, while certainly improved from the early months of the season – quite subdued and steady through the final few sales. As eyes now turn to the 2018/19 season, the improving – albeit slowly – Chinese demand for broad wool will be the key driver for the crossbred market. Broker reports have indicated that good types of second shears and coarse crossbred have been selling well, but lesser quality types have struggled across both North and South Island sales. Clearance in June was down on the relatively strong performance in May. However, positively for the 2018/19 outlook, clearance rates in New Zealand have lifted the bales sold at auction some 37% compared with last year, helping to alleviate some of the stock pressure accumulated in the 2016/17 season. Supporting this is
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exporters were celebrating a currency that had fallen below USc 68: its lowest level in two years. In the US, as anticipated, the Fed raised the target range for the federal funds rate to 1.75%2.00%, from 1.50%-1.75% in June – the second rate hike this year. For now, we are sticking with our expectations that there will be one more US rate hike this year (likely September). We are more sanguine about the outlook for the US economy as it pushes into 2019 than many commentators, and for now expect no rate hike in the first half of that year. The case for any increase in central bank rates in NZ is far weaker. • Want to keep up-todate with the latest food & agribusiness insights? Tune into RaboResearch Food & Agribusiness Australia & New Zealand podcast channel.
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