Brexit could harm primary exports

The Foreign Ministers from the European Union's founding six: Germany, Belgium, Italy, Netherlands, Luxembourg and France walk through the park of the German Foreign Ministry's guest house Villa Borsig in Berlin to talk about Brexit. Photo / AP

Brexit will likely harm Hawke's Bay primary exports because of currency fluctuations in the short term but long-term outcomes are up in the air, say industry leaders.

New Zealand sheepmeat quota to the EU represented more than half of New Zealand's sheepmeat exports, with the UK taking half of that amount.

Beef + Lamb New Zealand CEO Sam McIvor said New Zealand sheep and beef quotas to the UK and EU were "inextricably linked" and likely to be affected by Brexit.

Last year 90 per cent of the UK's sheepmeat exports went to the EU. If the UK lost its preferential access under Brexit there would likely be an oversupply in the British market, dampening demand for imports from New Zealand, currently more expensive because of the falling pound since the Brexit result was announced.

Meat Industry Association of New Zealand CEO Tim Ritchie said there would be no immediate change to UK export conditions until it negotiated exit terms when it would likely negotiate how much of quotas would be transferred and on what terms.

Hawke's Bay firm Progressive Meats' managing director Craig Hickson, who also owns a meatworks in Wales, said export New Zealand lamb was entering the low season until late October, giving an opportunity for the market to settle.

"We do expect after the initial reactions things will settle down but no one is quite sure where that will be," he said.

"That uncertainty results in volatility."

Staff in Wales were "watchful". "It will change the net flows through Europe and the UK."

Pipfruit New Zealand CEO Alan Pollard said Germany was the largest European market for apple exports and the UK second.

Returns for the second half of the current export season would be lower should the pound and euro remain lower but there were at least two years to go before any change in terms envisaged.

"We have good relationships and programmes into both, so we are not anticipating too many problems," he said. "It is a bit of wait and see, really. You can expect a number of our exporters would have taken forward cover so we won't know until the end of the season."

Federated Farmers is urging diplomats and export companies to quickly push New Zealand's agenda. "This could be a great opportunity to work with lamb producers in the UK to get better outcomes for both countries," Federated Farmers president Dr William Rolleston said.

New Zealand's small open economy will be a loser if protectionism prevailed, he said.

Hawke's Bay Chamber of Commerce CEO Wayne Walford said opportunities through the TPP trade agreement could pick up the slack should Brexit not fall New Zealand's way.

Waipukurau farmer, former Beef + Lamb chairman and Special Trade Envoy Mike Petersen did much of the early negotiations for TPP and was in Europe negotiating EU access when the Brexit result was announced.

He said New Zealand now needed two trade agreements, one for the EU and one for the UK, but trade-policy negotiators from both entities would likely be preoccupied with each other.

Mr Pollard was in Australia attending a conference when the Brexit vote was announced

"I was following it all on my phone - it was more exciting than a lot of sporting contests."