Economist warns of risk to agricultural exporters if trade relationship with China changes

Kiwifruit exports have come under pressure lately.
Kiwifruit exports have come under pressure lately. Photo credit: Getty

New Zealand exporters are exposing themselves to a range of risks if they focus too much on China at the expense of other export markets, an economist says.

China is this country's biggest export market and was worth $20 billion in 2019.

Westpac agri-economist Nathan Penny said China paid top prices and offered steady demand but that made exporters vulnerable if the trade relationship were to change.

"Over recent years, China has in some cases restricted access to its lucrative markets in order to advance its wider strategic interests."

He said seafood and kiwifruit were the sectors most exposed because their supply was not strategically important to China.

"New Zealand is a very small [seafood] exporter so China does import a lot of seafood and it can effectively source what it needs from other countries."

He said gold kiwifruit exports, in particular, had come under pressure as Chinese orchards engaged in authorised planting of the high-value Sun Gold variety.

Penny said there were several things exporters could be doing to offset their exposure, such as maintaining a diverse range of export markets while at the same time selling Chinese consumers on the quality and food safety hygiene of New Zealand food exports.

Dairy and wine products were among those exports with the lowest exposure to the Chinese market, as they cannot easily be sourced elsewhere or produced domestically.

Meat exports carried a medium risk rating, as they could be substituted with products from other countries, but its export risk was relatively diversified.

China's reliance on imported meat was also bolstered by the impact of African swine fever.