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Bulk wine exports a concerning feature of 2009

Wednesday 29 July 2009, 8:47AM

By Ministry of Agriculture and Forestry

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An annual MAF report on the primary sectors says the marked increase in the proportion of wine exported in bulk is lowering overall demand for New Zealand bottled wine.

Situation and Outlook for New Zealand Agriculture and Forestry (SONZAF), was launched in Wellington on Tuesday 28 July.

The Ministry of Agriculture and Forestry (MAF) report looks at issues facing the primary sectors currently and forecasts the trends over the coming three to five years.

It shows many sectors including meat and forestry will see steady increases in returns over the coming few years to 2013, while dairy will improve on the current pay-out without getting to the record levels of 2007/08.

In the wine industry, average prices were steady for 2009, at $9/litre1, but the overall export value of the industry increased to $945m on the back of a record harvest, which was well managed by the industry.

Marlborough sauvignon blanc continues to dominate, with the recent growth in plantings of new sauvignon blanc vines described as “the most sustained and significant horticultural land development in New Zealand history.

However, SONZAF notes a “concerning feature” of the 2008 vintage was the volume of wine exported in bulk, rather than bottled locally, which increased from four percent in recent years to 30 percent in May this year.

“This risks damaging the value of the premium Marlborough sauvignon blanc brand.”

MAF Director-General Murray Sherwin says the dynamic nature of global trade will continue to affect New Zealand producers, in both negative and positive ways.

“Many producers need to concentrate on innovation and productivity gains so they can take advantage of the rewards to be had in emerging markets.

“In traditional markets such as the EU and US, recession-hit economies are expected to reduce spending and continue to protect domestic suppliers.

“A good example of how this can work is in the apple industry. The predominant varieties of apple exported have changed to meet demand in new markets such as Japan and Korea, with a resulting improvement in profitability, while the proportion of older varieties bound for Europe and North America has declined.

“The exchange rate played a role in insulating New Zealand from some of the effects of the global recession. The value of the Kiwi dollar against major currencies will be key to determining the value of exports in coming years,” Mr Sherwin says.

 

SONZAF is available online at: http://www.maf.govt.nz/mafnet/rural-nz/statistics-and-forecasts/sonzaf/