Horticulture exports grow despite COVID handbrake

Horticulture exports have continued to climb despite the challenges created by the global COVID-19 pandemic. New Zealand’s horticulture exports increased 25 percent from 2018 to 2020; by 30th June 2020, horticulture exports were worth $4.521 billion, up $903 million from 2018.

The pandemic affected trade from early 2020, with export figures up 7 percent year on year. This increase was expected to be significantly higher had there not been trade disruption from March 2020. COVID-19 brought a surge in people wanting to eat healthy, locally produced food. They were shopping more for groceries and wanted to know more about where their food comes from. The flipside for growers and exporters has been securing reliable access to essential resources like water, skilled and reliable personnel, logistics, capital and infrastructure. There has also been pressure on global supply chains with disrupted trade flows and consumption patterns and a challenge to keep up with the speed of change, whether that be on issues of sustainability, traceability or changing customer/ consumer requirements. As of 30th June 2020, kiwifruit and apples were our dominant horticultural crops, accounting for 75 percent of the total export value in 2020. Kiwifruit accounts for over $2.5 billion (56 percent) of the value of horticulture exports. ‘Horticulture exports’ refers to food and some juice products. Wine is classified as a ‘beverage’ and subject to different export market requirements. Based on 2020 values, onions, potatoes and avocados are ranked third, fourth and fifth respectively as the most valuable horticulture exports. Onions increased 59 percent between 2018 and 2020, surpassing potatoes and avocados. Potato exports decreased 11 percent, while avocados increased 14.6 percent in 2020. The EU remains New Zealand’s most

valuable export market (total earnings) for horticulture, ahead of Japan and China. Those three markets accounted for 56 percent of total export earnings in 2020. With the exception of 2012, the EU has been the top-ranked market destination each year since the first report in 2004. Australia and Taiwan are placed fourth and fifth. The USA and South Korea retain sixth and seventh positions. Vietnam has moved from 10th to eighth, with export value doubling between 2018 and 2020. The Vietnamese market is now valued at $124 million and ranks above Hong Kong and Thailand. Over the longer 10-year timeframe, China and Vietnam have climbed the most, while exports to Japan and Taiwan have doubled. The EU market has increased more than 50 percent. Australia has shown only modest growth. Asian economies continue to grow in importance, with seven of the top 10 markets in the north Asian region. ASEAN member countries, especially Indonesia, Malaysia, the Philippines, Thailand, Singapore and Vietnam, were collectively worth $425 million in 2020, an increase of $150 million from 2018. Horticulture Export Authority Chief Executive Simon Hegarty said over the same period the cost of tariffs on horticultural exports decreased 29 percent to $152 million in 2020 from $214 million in 2018. “The drop in tariff costs is primarily because bilateral or regional free trade agreements have removed most tariffs in many of New Zealand’s key markets such as China, Japan, Malaysia, South Korea, Taiwan and Vietnam. Tariffs now account for an average of 3.4 percent of the value of horticultural trade, which is down from 5.9 percent in 2018.” The Horticulture Export Authority promotes the effective export marketing of horticultural products by providing an exporting structure and support network for the NZ industry and liaising with sector stakeholder groups on market access, trade barriers and their removal. Its success is based on industry collaboration to maximise the co-ordination, distribution and marketing of their products via an export licensing structure. The fundamentals of horticulture tick a lot of boxes for investors, particularly in the health and wellness and sustainability areas, Simon says. Technology is enabling the growth in opportunities and these are attracting interest from innovators and those interested in having a greater stake in their food supply. He also believes innovation in the horticultural sector is critical for its long-term success. “There are a wide range of innovative developments, from plant breeding, new product varieties, widespread use of digital technologies and even trialling robotics for harvesting some products. “The profile of the horticultural sector continues to evolve. Many horticultural industries have experienced a degree of consolidation from the mid-2000s, with several industries now having fewer growers but largerscale commercial operations. “This is evidenced by many horticultural product groups reporting smaller numbers of growers with a similar production area, or in some cases the total production area has increased significantly. This consolidation has been driven by a range of factors, primarily economic, whereby compliance (worker safety, food safety and environmental) and production (labour, utilities, transport and machinery) costs are increasing. Larger-scale operations tend to be more insulated from these costs due to economies of scale compared with individual smaller grower operations. This has the cumulative effect of forcing some small growers out of business or selling their operations to larger grower businesses,” he says.

Kiwifruit and apples were our dominant horticultural crops, accounting for 75 percent of the total export value in 2020.”