A sharp drop in meat sales has seen New Zealand’s exports fall for the second year in a row.
Official figures showed that despite healthy increases in sales of fruit, wine, seafood and logs, total exports in 2016 at $48.4 billion were $544 million lower than 2015 and $1.6b below the record set in 2014.
Hit by lower global prices dairy exports dropped by 3 per cent to $11.2b, but the largest fall was in the meat and edible offal category, which dropped by more than $900m or 13 per cent to $5.9b.
Lamb exports fell by $415 million in 2016, with lower sales to the European Union.
Tim Ritchie, chief executive of the Meat Industry Association said sales to Britain in particular had been hit by a weaker pound, and while prices locally had improved, the return in New Zealand dollars was lower.
“At the end of the day we’re not selling in New Zealand currency, we’re selling it in whatever currency the consumer’s paying. We can’t just pass on the impact of that exchange rate difference.”
Sales to the US were hit by lower volumes, with 2015 a record year for the beef industry, boosted by an extra large cull of cattle brought about by a slump in dairy prices, as farmers reduced headcount.
Ritchie said the outlook for meat exports in 2017 was stable.
“I don’t think there’s anything there that’s going to take us to the land of milk and honey overnight, but in the near term there’s not a lot of downside.”
Despite the fall in exports, New Zealand continued to make hefty gains in China, which extended its lead as the largest export market, rising 9.1 per cent in 2016 to just under $9.4b.
China accounted for a quarter of all dairy exports in 2016, up from 23 per cent in 2015.
Exports to Australia dropped marginally, while exports to the US plunged 8 per cent to $5.3b.
Of New Zealand’s top 10 export nations, exports to Britain saw the largest fall, down 12.4 per cent to $1.5b.
The fall means South Korea overtook Britain to be the fifth largest export destination, even though exports to South Korea fell 4.6 per cent.
The amount New Zealand imports also fell in 2016, dropping 1.7 per cent to $51.6b.
A fall in oil prices was offset by more imports of cars, trucks and auto parts.
Overall New Zealand’s trade deficit dropped $300m to $3.2b or 6.6 per cent of exports.
In 2015 New Zealand recorded the largest trade deficit for a calendar year since 2008.