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19 May 1998
As consumers of 38% of New Zealand’s merchandise exports to the year ending June 1997, Asian economies with declining growth rates could have more of an impact on New Zealand’s agriculture and forestry economies than the drought.
The Asian economic turmoil is having an impact on the regional, and potentially, the global economy. It has triggered pessimism in the New Zealand business community and is affecting the economy, though it is too early to tell what the long-term effects will be.
Figures released today in MAF’s "Situation and Outlook for New Zealand Agriculture and Forestry" revealed that for the three month period ending February 1998 there were dramatic falls in exports of goods to the Republic of Korea (44%), Indonesia (60%) and Thailand (15%), compared with the same period last year.
New Zealand’s exports to Japan are predicted to decline. Japan, the world’s second largest economy and New Zealand’s biggest market for forest products, cheese, vegetables, seafood and chilled beef is at an economic standstill and its domestic demand is in decline. Although New Zealand exports there have, until now, remained stable, doubts remain about Japan’s ability to reform its economy.
In the short term, New Zealand forestry exports to Asia are expected to fall. Japan and the Republic of Korea, two of our largest markets for forest products, are having financial woes. Thailand, Malaysia, Hong Kong, the Philippines and Indonesia are also significant importers.
However, exports to China, relatively unaffected by the Asian downturn, rose by 28% in the three months ended February 1998, compared with the same period last year. In the three months ended January 1998, exports to China of milk powder, butter and cheese were worth $21 million, representing a rise of 390% over the same period last year.
For further information contact:
Ronnie Horesh, SONZAF Editor, Ministry of Agriculture and Forestry Tel: 04 4744 100 Ext: 8499