The Gulf Cooperation Council countries are key markets for New Zealand’s agriculture industry, and firms should be targeting them as a priority, according to a Rabobank report.
The report – “Competitive Challenges – Getting on the global market access ‘VIP’ list” – singled out the GCC as New Zealand’s top priority among emerging markets, thanks to the region’s strong growth. Between 2006 and 2013, New Zealand exports to the GCC doubled to reach US$1.1bn, with dairy making up around US$843m of the trade, and meat products another US$169m.
Dairy to win big with reduced tariffs
Report author Matt Costello, an animal proteins analyst at Rabobank, said the New Zealand government should focus on working with GCC governments to remove technical trade barriers, cut trade tariffs, and establish free trade agreements. He said New Zealand’s dairy industry would be the biggest beneficiary of this, with exports of US$358m to Saudi Arabia alone in 2013.
“As New Zealand and the GCC progressively introduce lower tariffs, it is likely that this figure will continue to rise, representing an even larger share of New Zealand’s total exports,” said Costello.
“A large segment of this growth is likely to come from the dairy industry and sheep and beef sectors. Most of the potential surrounds the rising trade expectations with Saudi Arabia, although the flow-on from the other member countries would encourage increased export growth overall,” he added.
NZ government pushes agribusiness
The New Zealand government has been stepping up its efforts to boost food and agriculture trade with the Middle East. In March this year it created an “agricultural counsellor” to help promote New Zealand products in the region.
“This new position is the latest step by the Ministry for Primary Industries to increase its presence in the Middle East. It recognises the growing importance of the New Zealand relationship with the region and will provide further support for New Zealand exporters,” said Nathan Guy, New Zealand minister for primary industries.
“Based in Dubai, the position will cover key markets in the Middle East and seek to advance our trade and economic relationships. The position will also contribute to New Zealand’s strategy to develop strong government and private sector relationships with the GCC,” he added.
Also in March, Guy travelled to the Middle East to push Kiwi agriculture. During a visit to Saudi Arabia he announced the establishment of a New Zealand “agribusiness hub” in the kingdom .
Costello said New Zealand has a significant advantage, thanks to its image as a premium, high-quality source of products: “A continuing commitment to supply chain integrity and product quality remains the key differentiator supporting trade and global market access for New Zealand’s food and agricultural products.
“In particular, New Zealand’s premium brand of clean, green, disease-free and transparent products alleviates food safety and traceability concerns, which can often lead to trade restrictions in foreign markets, as has been experienced on various occasions by competitors such as Brazil, the US, and India,” he added.