Head of Agribusiness NZ says diversity 'not a bad thing' amid concerns trade too dependent on China

The head of Agribusiness New Zealand says New Zealand may need to consider more diversity in its export markets after COVID-19.

With China comprising a massive chunk of our agricultural exports, there have been questions raised about whether we are too dependent on the country to buy our products.

That comes after China blacklisted a number of abattoirs in Australia and threatened an 80 percent tariff on barley from the country in what is believed to be a political move after Australia called for an investigation into the origin of COVID-19.

Earlier this week National's spokesperson for trade Todd McClay urged the Government to "take practical steps to ensure trade with China continues freely" after Foreign Minister Winston Peters triggered a tense back-and-forth exchange between China and New Zealand.

Peters called for Taiwan - a territory China considers to be part of its own country - to be given a seat at the World Health Organisation after its successful fight against the COVID-19 pandemic. 

China's foreign ministry spokesperson Zhao Lijian then issued a stern condemnation of Peters' comments, saying it violated our "one China" policy.

Two-way trade between China and New Zealand was valued at over $32 billion in 2019, and McClay reminded Peters it is vital "our relationship with China remains respectful".

Conor English, chairman of Agribusiness New Zealand, told Rebuilding Paradise with Paul Henry on Wednesday he was aware of the importance of the Chinese market for the industry and that a bit more diversity "wouldn't be a bad thing".

"China is a fantastic market for us and it's been a key driver for agriculture and the rest of the economy, but there's nothing wrong with a bit of diversity, is there?" English said.

"I think there will be other opportunities around the world. We're exporting to over 150 countries now and I guess a bit more diversity wouldn't be a bad thing. That's one of the lessons of the COVID virus, isn't it, that you do need to diversify your risk a bit."

Last month trade expert Charles Finny warned the Epidemic Response Committee that New Zealand would be even more dependent on China in the wake of coronavirus.

"We will be even more dependent on one market and one sector, China and agriculture, than we were before the crisis."

English said he hoped New Zealand's success so far in fighting COVID-19 would have a positive effect on our export sector, and play a role in rebooting the economy.

"To bounce forward, we need to make the most of the opportunities that COVID-19 is presenting us. And one of those opportunities is the fact that we do seem to have our virus under control at the moment and let's hope that that continues. 

"What it does mean is that we can still keep producing, we can keep our freezing works going, we can keep our manufacturing going and production going so that we can actually supply international markets with product on a reliable basis," he said.

Although English was optimistic demand would remain high, there were concerns that prices may soften as the global economy faces recession.

"One of the challenges is going to be the price that consumers, whilst they might demand it, have the ability to pay," he said, noting that a drop in oil prices - which have plummeted in recent months - often foreshadows lower prices in soft commodities such as dairy products.

"So we could be well able to produce lots of product and people might want it but they just might not be in a position to pay as much as we'd like them to."