Red meat exports slump, thanks to China
Weaker pricing and demand from China continue to impact New Zealand red meat export earnings.
More than 75% of New Zealand’s dairy exports to China are still subject to tariffs the industry thought would by now be cut.
The NZ China free trade agreement (FTA) was to eliminate all import tariffs on all dairy products in 2024. But under present transition arrangements less than 25% of the products enter China at lower tariffs.
Dairy Companies Association of NZ (DCANZ) chairman Malcolm Bailey says the rapid expansion of Chinese consumer demand for dairy products was not anticipated when the deal was made.
Bailey hopes negotiations announced last week towards an FTA upgrade will help exporters.
“DCANZ’s priority is for more comprehensive coverage of trade during the transition to full tariff elimination from dairy products in 2024, in recognition of strong Chinese import demand,” says Bailey.
“Extending the coverage of tariff preferences will reduce tariff related costs for Chinese consumers. It will also ensure that NZ exporters do not end up at a tariff disadvantage to Australian exporters as we transition towards tariff elimination.”
Bailey points out that the Australia China FTA does not have the same quantity limits on tariff preferences for butter and skim milk powder. NZ exported NZ$2.77 billion of dairy products to China in 2015.
Fonterra chairman John Wilson says the upgrade of the FTA will allow a strengthening of the dairy relationship between NZ and China.
“The leadership of both countries recognises the value of improving the FTA. We [will keep building] our business in China and the FTA will remain the key to that growth.”
Fonterra has operated in China for 40 years and now has farms, and sells ingredient products, foodservice and consumer brands including Anchor, Anlene and Anmum.
The co-op’s investments include a partnership with Beingmate, a leading Chinese infant and child food manufacturer.
It has completed two farming hubs and is working on a third in partnership with Abbott. It employs 1500 people in China.
Prime Minister John Key announced at APEC the upgrading of the China NZ FTA. This followed a meeting of Trade Minister Todd McClay and Chinese Commerce Minister Gao Hucheng.
Farmer-led charity, Meat the Need is calling for donations to enable it to supply more meals to families in need.
Weaker pricing and demand from China continue to impact New Zealand red meat export earnings.
Fonterra has cemented its position as the country’s number one cheesemaker by picking up nine NZ Champion of Cheese trophies this year.
New Zealand dairy processors are welcoming the Government’s commitment to continuing to push for Canada to honour its trade commitments.
An educational programme, set up by Beef + Land New Zealand, to connect farmers virtually with primary and intermediate school students has reported the successful completion of its second year.
Horticulture NZ chief executive Nadine Tunley will step down in August.