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Japan number one market for New Zealand chilled beef

Japan is now New Zealand’s number one market for chilled beef driven by tariff cuts under the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). However the gains may be eroded following a US-Japan agreement, according to the Meat Industry Association. In the eight months up until the end of August 2019, NZ beef exports to Japan have increased 22% and 15% by value. In August alone, New Zealand dispatched 679 tonnes of chilled beef to Japan, 26% of the total and a 19% increase compared to August 2018. Sirma Karapeeva, Trade and Economic Manager at the Meat Industry Association, says since the CPTPP came in effect in December last year, overall beef exports to Japan have increased 22% by volume and 15% by value. “So far, we have seen two rounds of tariff cuts on beef into Japan. Pre-CPTPP, our beef exports faced a 38.5% tariff that has now been reduced to 26.6% and will continue to decrease to 9% over the next 15 years. “Effectively, the CPTPP has already saved around $14 million in tariff costs on New Zealand beef exports into Japan.” Prior to CPTPP, New Zealand’s beef market share had been dropping. Across the Tasman, Australia’s 2015 trade agreement with Japan saw its beef exports to Japan soar by $NZ1 billion, while New Zealand’s fell by $NZ25 million. “Under the CPTPP we have now achieved parity with Australia in the market and we are already seeing a rebalance of market share as New Zealand beef has become more competitive.” However, the announcement of a US/Japan trade deal is a cause for concern, says Ms Karapeeva. “Despite the US not being part of the CPTPP and their beef exports to Japan attracting a 38.5% tariff, US exports remain strong. “We are keeping a close eye on the […]

Organic Food Industry Undergoing Consolidation

The global organic food industry is undergoing consolidation. In the last week, three major deals have involved established organic food companies in Europe and North America. Ecovia Intelligence (formerly known as Organic Monitor) expects more such deals as rationalisation continues. Royal Wessanen, one of the largest and oldest organic food enterprises in Europe, has just been acquired by an investment consortium. With headquarters in Amsterdam, the company owns a portfolio of European organic and free-from food brands, including Bjorg, Kallo, Allos, Whole Earth, Clipper, Alter Eco, Tartex and Isola Bio. The investors have paid EUR 885 million (USD 1 billion) for the company with the aim of strengthening its position in the sustainable & organic food market. Earthbound Farm, the leading organic salads company in North America, has been purchased by Taylor Farms for USD 400 million. Established in 1984, the Californian company has grown into an international supplier of organic fruits, vegetables and salads. Bought by Whitewave Foods in 2013, it came under the ownership of Danone USA in 2016. The French multinational has divested the company as it plans to focus on plant-based dairy alternatives. Another sale involves Bolthouse Farm, a leading supplier of organic and natural beverages, in North America. Campbell Soup purchased the company in 2012, and has now sold it to the private equity firm Butterfly for USD 510 million. Bolthouse Farm organic carrots, juices, smoothies and dressings are a feature in natural food shops across the US. Ecovia Intelligence (www.ecoviaint.com) sees more such ‘sell-offs’ on the horizon as the organic food industry undergoes consolidation. The industry has traditionally been fragmented with many operators involved in production and distribution. Rationalisation is occurring with large companies looking to take significant positions. Apart from large food companies and retailers, recent years has seen the entry of unconventional […]

Synlait embarks on business transformation for growth and diversification

Synlait has chosen Infor CloudSuite Food & Beverage to support its supply chain and manufacturing operations and growth as part of a five-year business transformation plan. The goal is to modernise and streamline operations for the integrated dairy business, one with over 150,000 metric tonnes of annual sales volumes across domestic and international markets including Asia, Africa, Middle East, and Australasia. An existing Infor customer, Synlait is looking to improve employee engagement and increase operational efficacy and efficiency by aligning to best dairy industry practices. This will be facilitated and enabled by Infor’s food and beverage dairy industry specialised CloudSuite software-as-a-service (SaaS) enterprise solution. “The foundation of our business is all about partnering with other businesses and people who share our passion and commitment to excellence, integrity, and quality,” said Chris France, director of strategy and business transformation, Synlait. “Infor is a strategic partner for our business transformation plan with its ability to help us leverage dairy industry expertise, data insights and real-world knowledge via its innovative Infor CloudSuite F&B solution.” “Infor understands the unique challenges of the food and beverage industry in the Australia and New Zealand markets, and is committed to continue delivering finely-tuned industry-specific solutions in the cloud to help our customers maximise efficiencies and accelerate growth,” said Helen Masters, Senior Vice President and General Manager, Infor Asia Pacific and Japan.

Dairy plays a key role in latest economic success

The dairy sector is thrilled to see that its significant contribution to the New Zealand economy is affirmed in the latest Situation and Outlook for Primary Industries 2019 report. “It is great to see this acknowledgement of the huge part that the dairy sector plays in the economy,” DairyNZ chief executive Dr Tim Mackle says. The Ministry for Primary Industries March 2019 report says dairy export revenue is forecast to rise 5.5 percent to $17.6 billion for the year ending June 2019, up from 13.3 billion in 2016, 14.6 billion in 2017 and 16.7 billion in 2018. Increased milksolids production translated into higher export volumes; and a reversal of declines in key dairy commodity prices at the end of 2018 continued into 2019. Total dairy exports for the six months ended December 2018 grew 3.8 percent to $8.7 billion compared to the previous year. There continues to be strong international demand for dairy, including from China. Dairy exports to China, as our largest trading partner, are up 16.6 percent to $3.2 billion for the six months ended December 2018 compared to the previous year. “For New Zealand’s dairy farmers, the strong production, a recovery of export commodity prices, and a weaker NZD should help ease downward pressure on farm level profitability for the current season. We have accordingly adjusted our all company average farm gate milksolids payout forecast for the 2018/19 season upwards to $6.41 (including dividend),” the MPI report says. Dr Mackle says the dairy sector contributes to national and regional economic development, supports New Zealanders’ wellbeing and employs more than 46,000 workers nationwide. The latest dairy achievements align with the dairy sector’s strategy, Dairy Tomorrow, which has an aspiration to improve the lives of New Zealanders with every drop of milk, Dr Mackle says. “The continuing success of […]

Fonterra has new Bangladesh partnership

Fonterra is breaking new ground in South Asia’s rapidly growing dairy market, with the signing of a new distribution agreement that will make Anchor available to millions more consumers in Bangladesh. The deal is part of the Co-operative’s ongoing efforts to win in key overseas markets, by spreading the goodness of dairy nutrition. The population of Bangladesh has grown by more than 10 per cent in the last 10 years reaching over 160 million people and it now makes up over two per cent of the world’s total population. Matched by strong economic growth, consumers in Bangladesh are looking for affordable healthy nutrition options, such as high-quality dairy. Fonterra’s Managing Director of Sri Lanka and Indian Subcontinent, Sunil Sethi said Anchor is well placed to drive growth, while improving the wellbeing of Bangladeshis. “The Bangladesh market creates an exciting growth opportunity. Partnerships like the one we’re announcing today will enable us to bring dairy nutrition to even more consumers across the country, so we can do well, by doing good. “Our Anchor Full Cream Milk Powder, for example, comes with more than 23 vital nutrients including protein, calcium, vitamins and minerals. Anchor is specially formulated with ‘NutriShakti™, a nutri-bundle that supports growth, energy and immunity.” Managing Director, ACI Agrolink Limited, Dr. F H Ansarey said, “Anchor is a renowned global dairy nutrition brand and we have a shared vision alongside Fonterra to enrich people’s lives by supplying safe, high-quality dairy nutrition to the people of Bangladesh.”

Environment and agriculture can both benefit from trade agreement

The Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTTP) trade agreement has the potential to transform the agricultural sector and at the same time benefit the environment, agribusiness expert Dr Nic Lees of Lincoln University says. However, he added, the public needed to be convinced of that. The CPTTP is the re-negotiated Trans Pacific Partnership after the USA withdrew, and is a free trade agreement between Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam. Negotiations have concluded between the countries but it is yet to be ratified by New Zealand. The TTP had met some public and political opposition. The CPTTP could change the sector from relying on low cost commodities to a focus on high value exports intimately connected to a pristine environment, Dr Lees said. “Where New Zealand producers are exporting high value branded products we see an associated increase in concern for the environment. These producers know that they need to meet consumers demand for products to be produced ethically and sustainably.” He said tariffs on New Zealand beef exports to Japan will drop from 38.5% to 9%, saving the industry $25 million. “This reduction in tariffs will give New Zealand and Australia a competitive advantage over the USA beef in the high value Japanese market. “It will encourage New Zealand beef farmers to target high value beef cuts in the Japanese market rather than export commodity hamburger beef to the USA,” Dr Lees added. Tariffs on kiwifruit exports to Japan, the largest importer of New Zealand kiwifruit, will be eliminated. Tariffs on wine exports to New Zealand’s fourth largest market Canada will also be removed. Overall the CPTPP could provide approximately $222m of tariff savings each year. However, he said, the public need to be convinced of these benefits. “There is […]

US market offers huge potential for New Zealand wines

New Zealand wine exports to the United States are growing faster than to our traditional international markets of Australia and the UK, and that pace is being matched by increasing recognition at the top competitions. In the five years from 2010-2015, exports of Kiwi wines increased three times faster than the UK and Australia. For the 12 months ended April 2015, New Zealand exported 5.88 million cases of wine to the US – up three million since 2010. During that period, exports to Australia increased to 6.4 million (4.8 million five years ago), and in the UK to 6.3 million (4.7 million). Giesen Wines began exporting to the US in 1997 and these exports now make up 10% of total sales. Alex Giesen said the US market is changing dramatically from a New Zealand perspective. “This is the fastest growing mature market and is increasing at a faster rate than Australia and the UK. We think it will become New Zealand’s biggest market by value and volume in the next 12-24 months. At the moment, it’s second by value and third by volume. “With the growth the US has experienced in sales of New Zealand Sauvignon Blanc over the past 10 years, we’re quickly gaining the reputation as a serious winemaking country.” Giesen’s wines are winning impressive plaudits from international judges at US competitions. At the LA International Wine Competition Giesen won two Best of Class medals, five golds, three silvers and three bronze. And at the most recent New York International Wine Competition, it was named Marlborough Winery of the Year. “The US has a real thirst for our wines, and particularly Marlborough Sauvignon Blanc. It’s a very easy drinking, fruit forward varietal that’s always popular. Marlborough Sauvignon Blanc is really driving this category in the US now and […]

Horticultural production tops $7 billion

Horticultural production has topped $7 billion for the first time, with good growth in nearly all the main industries, including wine, apples, potatoes, and onions. The latest edition of the industry publication Fresh Facts shows in the year to June 30 2014 the horticultural industry was calculated to reach $7.16 billion in production, up from $6.7 billion the year before. Exports rose by $300 million to $3.9 billion, an increase of nearly 7 percent on the previous year. Horticulture New Zealand chief executive Peter Silcock said New Zealand’s horticultural exports equated to more than three times the comparative return achieved by dairy merchandise exports because of the high productivity of horticultural land. Horticulture exports of $3.9 billion are produced off 1123,000 hectares of land, versus dairy exports of $16.9 billion from 1.7 million hectares. Silcock is confident the sector will achieve its target of $10 billion of production by 2020. The top export destination is Australia, which hit $872 million compared to $791 million in 2013, while the US has increased its intake from $415 million in 2013 to $489 million this year. Two of the top 10 export destinations decreased this year, with the Netherlands falling from $141 million in 2013 to $108 million this year and Spain down by $4 million to $70 million. Wine continues to be the biggest horticultural export at $1.3 billion in 2014 compared to $1.2 billion in 2013. Sauvignon blanc remains the dominant variety produced, at 310,240 tonnes of the 445,000 tonne total. The total wine grape tonnage was up 29 percent on the previous year, partly due to the average yield increasing from 9.8 tonnes per hectare to 12.6 t/ha. Kiwifruit is the largest fresh fruit export at $930 million, although that is down $65 million on 2010 figures, following the Psa virus crisis. […]

Chinese demand drives NZ lamb wool price rises to 6-week high

New Zealand lamb wool prices rose to a six week high on increased demand from China for the apparel fibre. Lamb wool rose 4.8 percent to $6.60 per kilogram at yesterday’s South Island auction compared with last week’s North Island auction, its highest level since it touched a four year high of $6.65/kg on March 12, according to AgriHQ. The average price for 35-micron wool, a benchmark for crossbred wool used for carpets and accounting for the majority of New Zealand’s production, was unchanged at $5.35/kg. New Zealand lamb wool prices have been buoyant this year, outpacing demand for other wool types. China is the largest buyer of New Zealand wool, accounting for 52 percent of the nation’s $794 million in wool exports last year, according to Statistics NZ data. “The lambswool market continues to ride high on what is seemingly strong demand from Chinese buyers,” said Georgia Twomey, a commodity analyst at Rabobank. “The market holding up at these levels is very promising, particularly with the New Zealand dollar at its highest level against the US dollar since January and a weighted currency indicator against all major wool trade currencies at its highest level since September 2014. “These positive demand signals have been reflected also in the Australian market, which has been rallying strongly since the Easter recess. Gains have been made across the board at auction with strong improvement across merino fleece types as well as consistent strength in the carding and crossbred markets.” There was good clearance at the latest auction with 92 percent of the 9,265 bales on offer sold at auction yesterday. Some 5,100 bales will be offered at next week’s North Island auction, according to New Zealand Wool Services International.

NZ beef exports to Indonesia double after quota restrictions removed

New Zealand beef exports to Indonesia more than doubled over the past year as the trade recovers from beef import quota restrictions imposed in 2011. The volume of New Zealand beef exports to Indonesia rose to 15,384 tonnes in the year ended June 30, from 6,516 tonnes a year earlier, the Meat Industry Association of New Zealand said in its 2014 annual report. The value of beef exports to Indonesia jumped to $76 million from $34 million. Indonesia ended volume-based import quota restrictions in September 2013, removing an impediment that had crimped New Zealand’s beef exports to the country since early 2011. Meantime, new price-based restrictions haven’t yet been triggered, helping Indonesia overtake the Philippines and regain its place as the largest market for New Zealand beef in South East Asia. Still, the association remains concerned that the new price-based rules could hurt New Zealand exports. Under the Indonesian system, meat and live cattle imports are allowed only when domestic beef prices increased by more than 15 percent from a specified parity price, initially set at 76,000 Indonesian rupiah, about US$6.60/kg. “Given the weakening of the Indonesia rupiah against all major currencies, and the increasing competition to purchase protein worldwide, the specified price has not yet been threatened in Indonesia,” the association said. “There are, however, still questions about how this policy will operate in the long term, including how often the parity price will be set and how it will be determined, what incentives will be offered to industry to bring the price down, what would happen in the event of imports increasing but prices not changing and how long new permits would be valid for,” it said. Indonesia still has regulations in place that prevent the import of certain cuts, despite the same cuts from domestic animals being […]

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