Food exporters abuzz over talk of free trade deal with Russia

Russian demand for red meat is expected to grow. Photo / Wairarapa Times-Age

Food exporters say improved access to Russia could give them an important boost.

Prime Minister John Key said at the weekend that talks on a free trade deal between New Zealand and Russia, Belarus and Kazakhstan would start early next year.

The Meat Industry Association and Beef and Lamb New Zealand said improved access offered exciting opportunities for farmers.

Association chairman Bill Falconer said although Russian imports of red meat had been volatile, Russian demand for red meat was expected to grow and a significant proportion of this increased demand would have to be met by imports. An arrangement with Russia would be significant if it provided genuine improved access into the market, he said.

During the past five years New Zealand red-meat exports to Russia have been about $30 million annually, mainly sheepmeat and beef offals.

Exports peaked at $56 million in 2008 before the impact of the global financial crisis curbed demand.

Total exports to Russia are about $180 million to $200 million a year, mainly dairy, sheepmeat and fish.

Fonterra said a free trade agreement had the potential to make the region an even more important customer for the dairy industry.

Dairy exports to Russia are at present worth about $120 million a year.

"Russia is one of the world's largest markets for imports of butter and cheese and a significant dairy export market for New Zealand," said Fonterra group director Kelvin Wickham.

The Dairy Companies Association said it was great news for the industry.

"New Zealand is really picking up the pace in the FTA game," said chairman Malcolm Bailey.

New Zealand also exports fruit, medical equipment and coins.

New Zealand buys crude oil from Russia. Statistics NZ figures for the year to September showed imports totalled close to $500 million, up 118 per cent on the previous 12 months.

Key's announcement came at the Apec summit in Yokohama, Japan, where leaders pledged to take "concrete steps" toward eventually forging a Free Trade Area of the Asia-Pacific.

They also affirmed their "strong commitment" to bring the Doha round of world trade talks "to a prompt and successful conclusion".

Next year was "a critically important window of opportunity" to conclude the round and directed their officials to negotiate with "a sense urgency in the end game".

They also extended a 2008 freeze on any new barriers to investment or to trade in goods and services for a further three years to 2013.