PGG Wrightson Revenue Tops $1.1b as Profit Jumps 46%
After delivering a strong financial year, rural trader PGG Wrightson says the coming months will depend on customer confidence and weather.
Speaking at the recent HortNZ conference, he said that the geopolitical tensions between the US and China and the Middle East and Russia are having a significant impact on NZ's trade. He added that the supply chain challenges that have emerged are a refreshing reminder of what we faced during Covid.
Vitalis says in the future NZ needs to be more focused on resilience and how that needs to be handled in an international context. He says this is so that the supply and value chains that we have developed and rely on to export can be sustained.
"The second big feature in the trade policy sense is rising protectionism and that is well and truly back. I think there was a time when some of us were briefly optimistic that protectionism was reducing and the future was looking good for agricultural exporters, but unfortunately, it's not possible to be quite so optimistic anymore," he says.
The other issue he noted was the rise in non-tariff trade barriers. It's well-known that many economies are finding novel and interesting ways to protect their ag sector, often to the detriment of NZ.
One example of this is the USA which has, for whatever reason, imposed 12.5% tariffs on many of our exports. Other countries have from time to time mad last minute 'technical changes' such as new food labelling rules which delay or prevent exports reach destinations.
Vitalis says another factor that NZ is having to deal with is a focus by some key export destinations on the issue of food security. With problems in the Middle East, jurisdictions such as the EU are now thinking about what they call 'strategic autonomy' - code for protectionism and food security.
"So, given all these things, the jungle has grown back and there will be more disorder and uncertainty," he says.
Vitalis says NZ's trade strategy is now about getting a more rules-based trading environment, developing resilience and innovating to try and mitigate the problems we face. He says we are a small country and need to be creative in developing new free trade agreements and dealing with the plethora of non-tariff trade barriers.
More FTAs
Trade Minister Todd McClay says he'll be making a concerted effort over the next five years to obtain more FTAs.
He says the process has already begun with Switzerland with an agreement to establish a Trade and Investment Dialogue. He says Switzerland is an important partner for NZ and one of the world's most innovative and advanced economies.
Two-way trade between the two countries were worth NZ$1.88 billion as at the end of last year.
McClay says the Trade and Investment Dialogue will lead to closer economic cooperation and enhanced collaboration, through bilateral trade and investment forums like the World Trade Organisation, the OECD, and the FIT Partnership.
"At a time of growing global economic uncertainty, it is more important than ever that like-minded countries work together to strengthen trade and investment," he says.
Beside Switzerland, McClay says Brazil and Columbia are high on the agenda for trade talks, as are Sri Lanka and Bangladesh - the latter country, which has 170 million people, has done a trade deal with the USA. He says NZ is also looking towards Africa and in particular Rwanda and Nigeria.
