Tuesday, December 5, 2023

UK FTA already paying dividends, but post-covid China hits different

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Meat Industry association highlights significant increase in value and volume into UK market.
The latest research by BLNZ and the MIA shows New Zealand red meat exports have benefited substantially from concluding FTAs, with tariffs reducing by 47% between 2010 and 2022.
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The free trade agreement with the United Kingdom is already paying dividends for red meat exporters but global markets will remain subdued for a while yet, Meat Industry Association chief executive Sirma Karapeeva says.

Speaking on the Farmers Weekly In Focus podcast, Karapeeva said over the past three months, New Zealand has exported 650t of beef worth about $8.1 million to the UK, which is a significant increase in volume and value compared to last year. 

“And last year when we were exporting beef into the UK, we were paying at least a 20% tariff. So we are starting to see some meaningful tariff savings in the first three months of the FTA already. It shows that these trade agreements can add real value and make things a little bit easier, particularly in these rough economic times.”

Karapeeva has just returned from China, where she led a Meat Industry Association technical delegation.

“We’re looking at things like training of meat inspectors, residue monitoring in terms of meat hygiene, as well as some of the settings around the supply chain and the cold chain.

“More specifically, [it was about how to] work together with the Chinese standards, authorities and agencies to make sure that the standards that are applied in market actually maintain the quality of the cold chain, so that the product reaches the consumer at its optimum quality.”

Karapeeva said post-covid China is different to the one she visited prior to the pandemic, but while the economy is subdued there are opportunities for NZ exporters.

“People have clearly gone through a tough time during the covid restrictions and zero-covid policy times, but that is well and truly behind them. 

“People are moving on, they are looking at opportunities in the market and elsewhere.

“But people are a little bit more cautious about what they buy, how they buy, and why they buy. As individuals and consumers that is really targeting their need for better health and nutrition. 

“I’m speaking specifically around food and quality, quality, quality. A lot of those attributes or consumer drivers work well with the products that we are offering because we’ve got a good story to tell, but we probably need to be a bit more focused on how we tell that story.”

Other global markets mirror China, and Karapeeva predicts demand to remain flat in the medium term.

“Overall, exports so far this year from January to August have been relatively subdued compared with the same period last year. That’s both in terms of volume, but particularly in terms of value. The value has come down for both beef and sheepmeat, which, as I said before, is a reflection of the general global economic conditions and consumer caution around spending and inflation.

“Beef exports to the US have been relatively low in recent times and that’s specifically because there has been quite a lot of drought-driven domestic beef production in the United States. And that has obviously displaced imported product. 

“But we understand that the drought is hopefully going to come to an end very soon and once that happens the US will move into a rebuilding phase. And we’re hoping that once that’s fully underway there is likely to be a significant demand for imports of beef to make up for the reduction in domestic supply that’s likely to occur.”

In Focus this week: Trade relations with post-covid China

Bryan talks with Meat Industry Association chief executive Sirma Karapeeva, who has just returned from leading a technical delegation to China. She says post-covid China is different to the one she visited prior to the pandemic, but while the economy is subdued there are opportunities for NZ exporters.

Then, Bryan catches up with Otago Federated Farmers representatives Emma Crutchley and Luke Kane to see how they’re faring as the Otago Regional Council releases the country’s first freshwater plan.

And Richard Rennie looks at the way hazardous substances are approved for use.

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