Economic prospects for the primary sector are bright despite the significant challenges from COVID-19, according to the latest Situation and Outlook for Primary Industries (SOPI) report.
The report, released on Tuesday afternoon, forecasts food and fibre export revenue of more than $47.5 billion for the year ending June 2021, and a record $49.2 billion the following year, Agriculture, Trade and Export Growth Minister Damien O’Connor said.
“This strong performance is testament to the sector’s ability to adapt to keep businesses operating and workers in jobs. Producers are working to keep staff and communities safe from COVID, and provide the food and fibre products needed at home and abroad. Our primary sector can be proud of the way it has responded as part of our broader community.
“The star performers this year include the horticulture sector. Its export revenue is forecast to hit nearly $7.1 billion, an increase of 8.9 percent from the previous year. It’s driven by successful harvests in early 2020 and continued strong demand for our fresh fruit and wine.
“Further increases in export revenue of 5.3 percent are expected for the arable sector for the year ending June 2021, on the back of a bumper 23 percent increase the previous year.”
Forestry Minister Stuart Nash says forestry exports are showing good signs of recovery. “Strong demand for logs from China and for sawn timber from the United States is driving recovery in our forestry exports,” Mr Nash said.
“Exports are expected to increase by eight percent to almost $6 billion for the year ending June 2021. This reflects the resilience and hard work of our forestry sector, which should be commended.”
Mr O’Connor says export revenue for some sectors are forecast to drop for the year to June 2021 but expected to bounce back even stronger the following year.
“Dairy export revenue is forecasted to decrease 4.6 percent to $19.2 billion for the year to June 2021, driven by weaker global dairy prices, as markets continue to deal with the impacts from COVID-19,” says Mr O’Connor.
“However, this should be offset by high demand for our dairy products, particularly from China, to support strong sector profitability over the medium-term, with export revenue expected to reach $20.1 billion in the year ending June 2022.
“Meat and wool export revenue is expected to decrease 8 percent to $9.8 billion for the year ending June 2021, mostly due to food service closures from COVID-19, and competition from poultry and other lower priced proteins. It’s expected to rebound to almost $10.1 billion the following year.”
Oceans and Fisheries Minister David Parker says COVID-19 continues to affect seafood exports, but this is expected to be short-term.
“The seafood sector continues to bear significant impacts from the international downturn in hospitality, tourism, and dining out due to lockdowns caused by COVID-19,” says David Parker.
“Export revenue is forecast to dip 1.4 percent to $1.8 billion. However seafood exports are expected to hit a record high of $2.02 billion the following year.
“The sector continues to navigate challenges from COVID-19. It’s been a tough year for the sector, but demand for New Zealand’s high-quality seafood is expected to pick up,” says David Parker.
Mr O’Connor says while the impacts from COVID-19 will be seen for some time, New Zealand is well placed to recover. “Our Fit for a Better World – Accelerating our Economic Recovery roadmap launched earlier this year will guide our recovery,” says Mr O’Connor.
“It aims to add $44 billion in export earnings over the next decade through diversified, higher-value product offerings, with strong environmental credentials, which will also create jobs.
“In November New Zealand signed the Regional Comprehensive Economic Partnership (RCEP) Free Trade Agreement (FTA), the largest free trade agreement in the world. It will reduce non-tariff barriers, make trade simpler and reduce compliance costs for our exporters. This should help to further boost our food and fibre exports and our bottom line.
“The Government is committed to continuing its work with the food and fibres sector to tackle challenges brought about by COVID-19 and seize opportunities to help drive New Zealand’s recovery.
“New Zealand’s success in combatting COVID-19 – along with our solid elimination strategy – provides a good base from which to build back better than before,” Mr O’Connor says.
- Link to December SOPI – https://www.mpi.govt.nz/dmsdocument/43345