NZ commodity exports seen rising 9.2% in 2018

Dairy exports are expected to rise 19 per cent in 2018. Photo / File

New Zealand's primary sector exports are expected to rise 9.2 per cent in the year to June 30, 2018, according to the latest Situation and Outlook for Primary Industries, little changed from the assessment in June.

The Ministry for Primary Industries has begun publishing its SOPI on a quarterly basis. Total primary sector exports are forecast to be $41.62 billion in the June 2018 year, compared with the $41.57b estimate it gave in June. Its projection for the 2019 year was revised to $42.4b from $42.5b.

MPI said its forecasts are based on dairy prices remaining strong this season and "a return to normal productivity levels across most sectors following adverse weather last year."

Its projections for dairy barely budged between June and September. Dairy exports are expected to rise 19 per cent in 2018 to $17.35b before slipping back to $17.3b in 2019.
Dairy exports expanded by $1.3b in the 2017 year even as milk solids production on farm fell 0.6 per cent.

"Export prices began to recover midway through last year, and the continuation of that trend should flow through to another strong year of export revenue gains," MPI says. "We anticipate that New Zealand's milking herd numbers will stay near current levels, yet on-farm production is likely to increase, assuming climatic conditions improve."

Within dairy, whole milk powder exports are seen chalking up steady growth in the next two years, while butter, anhydrous milk fat and cream are forecast to surge in 2018 before slipping back in 2019.

Meat and wool exports are forecast to rise 1.7 per cent to $8.48b in 2018 and gain 2.9 per cent to $8.7b in 2019. Exports fell 9 per cent in the June 2017 year.

Forestry exports are expected to rise 5.2 per cent to $5.76b in the current year and 1.9 per cent to $5.88b in 2019, while horticultural exports are forecast to rise 4.9 per cent to $5.4b in 2018 and increase 5.8 per cent to $5.72b in 2019, with kiwifruit, wine, apples and pears rising.

Seafood export revenue is forecast to gain 6.2 per cent to $1.85b in 2018 and 4.5 per cent to $1.93b the following year. Arable export revenue is expected to jump 8.8 per cent to $205m this year and gain 3.6 per cent to $215m in 2019.

The segment called 'other' and includes honey, sugar and confectionery, cereal products and live animals is seen rising 1.1 per cent to $2.56b this year and gaining 1.7 per cent to $2.6b in 2019.