17 Jun 2021

Primary industries outlook predicts export rebound after 1.1% fall

12:11 pm on 17 June 2021

The food and fibre sector is expecting a 1.1 percent drop in export revenue due to covid related issues, but is expected to bounce back.

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Arable export revenue is expected to fall to $270 million. Photo: 123RF

The Ministry for Primary Industries' outlook for primary industries (SOPI) report was released at Fieldays this morning.

Exports amounted to over $47 billion and the forecast for the year ending June 2022 was for exports to reach a record $49.1 billion - a 3.4 percent increase on the year just ending.

Sustained growth is forecast year on year, hitting a further record of $53.1 billion for the year to June 202-5.

The sectors hardest hit by Covid-19-related shipping delays, labour shortages and demand decreases were seafood, dairy, arable and the meat and wool industry.

Arable export revenue is expected to fall to $270 million in the year ending June down 6.8 per cent from 2019-20 which was a record high.

Yield crops fall

Most crop yields in 2020-21 are in line with long-run trends, but down from last year, as seasonal conditions were not as favourable, the report said.

Covid-19 had helped stimulate demand for some seeds, but it had created freight issues for exports. In the longer term, gradual export revenue growth was forecast for all categories except other grain and seeds.

The seafood sector was also hard hit, with less people around the world eating out suppressing demand. Exports are expected to fall 4.1 per cent to $1.8 billion.

Minister for Oceans and Fisheries, David Parker, said demand did slow considerably during the pandemic, but export volumes and prices for products such as rock lobster were recovering well.

The Meet and Wool sector is facing a fall of 2.8 per cent to $10.4 billion in the year ending June 2021.

Despite China's increased appetite for New Zealand meat due to African Swine fever - prices had been negatively impacted by Covid-19 related food service closures.


The seafood industry was hard hit. Photo: RNZ/Conan Young

Dairy decrease

Dairy export revenue is forecast to decrease 5.4 percent to $19 billion in the year ending June 2021, due to Covid-19-related disruptions, and an appreciation of the New Zealand dollar.

"In the first half of the year, dairy revenue was down substantially due to global supply chain and market disruptions, and low prices for key commodity, the report said.

Some sectors still booming

Forestry looks to the strongest part of the sector, it's forecast to reach $6.3 billion this year an increase of 12.8 percent.

Forestry Minister Stuart Nash said that was down to higher export volumes and prices.

"Harvest and log export volumes are also set to increase 14.5 per cent and 21.4 percent respectively. This is testament to the forestry sector's resilience and hard work, something they should be very proud of.

"In January we also successfully signed our FTA upgrade with China, which included eliminating tariffs for 99 per cent of New Zealand's nearly $3.3 billion wood and paper trade to China. This will have enduring benefits for our forestry sector," Nash said.

Horticulture continued it's upwards trajectory - it's export revenue is forecast to hit $6.6 billion up 2.3 percent for the year ending June 2021.

The rise is being put down to larger crops and export volumes of kiwifruit and avocados.

Demand for New Zealand fresh fruit and wine from overseas markets has remained strong despite Covid-19-related disruptions, and this was expected to continue the report said.

But it said the seasonal labour shortage and freight issues were expected to result in reduced or static planted areas for some crops in the short term.

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