China driving record export earnings for NZ primary sector

Exports of New Zealand's agricultural products are set to reach a record 37.7 billion NZ dollars (32.11 billion U.S. dollars) in the year to the end of June, with much of the increase driven by demand in China, according to a government report out Monday.

The figure published in the Ministry for Primary Industries annual report on the outlook for primary industries was about 1.3 billion NZ dollars (1.1 billion U.S. dollars) over previous forecasts.

Primary Industries Minister Nathan Guy said the report showed export prices increased across most sectors for the year ending June, with the dairy and forestry sectors standing out with good increases in both price and production.

"Dairy now accounts for 46 percent of total primary industry export value and 35 percent of total New Zealand merchandise export value. High price levels for dairy were underpinned by robust demand from China, which remains an important market for dairy, meat and wool, seafood and logs," Guy said in a statement.

"Meat and wool exports have broken 8 billion NZ dollars (6.81 billion U.S. dollars), which is fantastic considering last year's drought. Exports are expected to increase by around 22 percent for the five years to 2018," he said.

"Demand for logs from China is driving the growth of the forestry sector, with export value reaching 5.1 billion NZ dollars (4.34 billion U.S. dollars) at the end of June 2014."

The report also forecast horticulture export revenues to surpass 4 billion NZ dollars (3.4 billion U.S. dollars) in 2016, while seafood export earnings were expected to reach to 1.64 billion NZ dollars (1.39 billion U.S. dollars) in 2018, with prices likely to remain high due to strong demand from China, Australia, the United States and the European Union.