New Zealand primary sector exports recovering from dairy slump

Exports from New Zealand's farming sector are set to grow strongly over the next two years, with the pillar dairy industry rebounding from its slump, according to a government forecast out Thursday.

A report from the Ministry for Primary Industries (MPI) showed that exports were expected to show growth of 3 percent in the year to the end of June.

"New Zealand primary industry export revenue is estimated to reach over 36.7 billion NZ dollars (25.83 billion U.S. dollars) in the year ending June 2016, supported by strong growth in horticulture and other primary sector exports and foods," MPI director of sector policy Jarred Mair said in a statement.

"Dairy prices have remained weak as global supply is still abundant. New Zealand production is down marginally but export volumes are up. Production is still high in the EU, which is keeping downward pressure on prices," said Mair.

"Overall there has been a 6-percent decline in the value of dairy exports in the past year, but an expected gradual price recovery should lead to increasing dairy export values looking out two to three years. Overall our forecasts show 34 percent growth out to 2020."

Horticulture exports, which exceeded 5 billion NZ dollars (3.52 billion U.S. dollars) for the first time in the 2015-2016 season, were expected to continue their growth over the medium term.

The outlook was supported by the primary sector's significant investments in processing capacity across the country.

"Free trade agreements will also help grow our exports, while population growth and economic development throughout Asia will support increased demand for New Zealand's protein, horticulture, wood and fiber products," said Mair. Endit