Thursday, 07 February 2019 09:47

Too many eggs in China's basket?

Written by 
Doug Steel. Doug Steel.

China's market share of NZ’s primary exports is material and raises the issue of concentration risk, says BNZ rural economist Doug Steel.

Read: Bank picks flat prices for 2019.

“For agricultural and forestry products overall, China accounts for about 28% of NZ exports. 

“It’s not nearly as much concentration as NZ ran with the UK prior to the 1970s, but it’s not insignificant. Of course, this doesn’t mean NZ shouldn’t sell more produce to China just because it already sells a lot there,” he explains. 

“But it does pay to be aware of the rising concentration and potential fallout if conditions were to deteriorate rapidly in that market and plan accordingly.”

Meat has seen big Chinese market share changes over recent times, including last year. 

“China now takes 30% of NZ’s sheepmeat exports and 24% of beef exports. Ten years ago these shares were 3.2% and 0.1% respectively. 

“Most recently, African swine fever in China may have generated extra demand for imported meats including beef and lamb, as consumers look to replace any shortfall in domestic pork supplies,” Steel says.

“Gains in China’s market share for NZ sheepmeat has also coincided with the UK’s share dipping sharply after the June 2016 Brexit vote. The EU’s share has drifted lower.”

Bank picks flat prices for 2019

 

More like this

Mixed signals — despite high prices

The rural property market is lacking ‘zing’ despite high primary product prices and low interest rates, says BNZ’s agribusiness report Rural Wrap.

The sad demise of Westland Milk

Selling Westland Milk Products to the Chinese dairy giant Yili may be the right thing but will be the sad end of the cooperative, says Barrytown farmer Richard Reynolds.

 
 

» Latest Print Issues Online

The Hound

Fail!

PM Jacinda Ardern may have many talents, but an understanding of business is clearly not one of them.

The good life?

Your canine crusader admires those people in high positions who do not take their own self-importance too seriously and are…

 
 

» Connect with Rural News