Economic Review of New Zealand's Seafood Industry29 June 2012
Seafood export value for the first quarter of 2012 is up by 8.6 per cent compared with the first quarter of 2011 to NZ$388m, states a new seafood industry economic report from the New Zealand Seafood Industry Council.
A Difficult Year Ahead?
Since mid April cracks have appeared in the global economy,
with a lacklustre tone evident in the local economy. Quarterly
movements in surveyed unemployment has been volatile of
late, with unemployment beneficary numbers dipping and job
advertising indicating a more modest recovery in the demand
A large fall in the latest retail trade volumes revealed an unwinding in the rugby World Cup-induced boost in cash spending. This is a clear negative for quarter one GdP, which is expected to be partly offset by climbing manufacturing sector activity. A good start to the year for manufacturing sector activity was evident in good primary production and encouraging export statistics. however, the large fall in the April PmI (performance of manufacturing index) figures suggests that the still high kiwi dollar, a wobbly global scene and delays with the Canterbury rebuild are likely to contribute to a difficult year ahead.
Two of the key potential transmissions mechanisms to the New Zealand economy; namely funding and commodity prices, have provided more positive signs. The NZ dollar has started to play catch-up, reconnecting somewhat with falling commodity prices. Technically, the New Zealand dollar doesn’t look extended at all based on where commodity prices currently are (still high by historical standards). however, this does not allow for the fact that a sizeable chunk of the export sector is not benefiting from high commodity export prices (particularly services and manufacturing).
Commodity prices fell sharply in April, to sit at an 18-month low. Sheepmeat and wool prices dropped to 18-month lows. International dairy prices have retracted back to the level that prevailed in August 2010. historically, the aggregate level of commodity prices are 12 percent higher than the 2000-09 decade average, propped up by meat and dairy prices. however, the sub-groups of seafood, forestry, aluminium and horticulture prices are below period averages.
What Will Grow the Economy?
An important pre-condition to the economy strengthening
this year will be for consumer sentiment to start marching to
the more upbeat tune already evident in business confidence
gauges. With the housing market data appearing to have paused
for breath and with mother Nature having already leant support
to the rural sector, the economy is looking devoid of a real
economic engine in the second half of the year. much depends
on business investment and the Christchurch rebuild as growth
engines over the next 12 months.
Specifically, it is uncertain times for commercial fishing in New Zealand but the outlook is promising. more recently, the New Zealand dollar has moved towards a more competitive level; and an increasing share of the national catch is being exported to developing markets, which have been relatively insulated from the European sovereign debt crisis.
Export NZ$Free On Board
All figures in this section are based on export data provided by Statistics New Zealand and analysed by the New Zealand Seafood Industry Council. Please note that the results for January, february and march (Q1) 2012 are provisional.
Exports of finfish species accounted for 64 percent of all seafood exports in dollar terms yet represent 79 percent of tonnes sold. While we export slightly more than 2,000 tonnes of rock lobster a year (about one percent of all catch), this species contributes around 14 percent to export earnings, although the contribution is down slightly in the first quarter as most rock lobster is caught towards the end of the year.
Export earnings in Q1 were up 8.6 percent compared with Q1 2011. Volumes were also up albeit to a lesser extent at 3.2 percent.
The volume and value of ‘other crustaceans’ (mainly crab, shrimps and prawns) grew strongly between years, up 59 percent and 41
The total quantities exported fell somewhat as the world came to grips with economic crisis but have seen positive growth over the last couple of years. Export volumes grew by 3.2 percent in Q1 2012 compared with the first quarter of 2011
Seafood Exports by Country
At the end of 2011, China became our leading export partner; it
was our fifth highest export partner in 2003. The large increase
in exports to China was matched by a similar decrease in exports
to hong Kong in 2011. however, hong Kong has seen a strong
start to the year with a 169 percent increase in sales compared
with the same time last year – the majority of their imports have
been in rock lobster ($29m).
We have also seen the emergence of some smaller trading partners this year, namely mauritius and Thailand while some of the more established countries – China, uS and Spain have dropped in sales compared with the same time last year.
Exports by Species
We catch more hoki than any other species, but in dollar per
kilo terms we earn more from the export of many other species
– especially shellfish and crustaceans.
As catch varies significantly across the year the rankings of these species may vary each quarter. The important comparison is between quarters in 2011 and 2012. overall, we saw growth in sales value of most of the top species apart from a slight decline in mussels. ling and snapper remained stable while barracouta dropped by 11 percent. This was due to a significant drop in catch from five tonne to three tonne.
Exports of Main Commodities
Exports of fish, crustaceans and molluscs totalled $347m for the
first quarter of 2012, an increase of 8.7 percent compared with
same period last year. This is a positive increase given that total
exports across all merchandise fell by 1.9 percent.
As well as the $347m attributed below, the seafood industry also exported approximately $41m in processed products such as capsules, powders, fish cakes and fingers and other value added products.
- The UN FAO reported in 2011 that the global trade in fish and fish products set a new record with exports reaching US$127 billion, an increase of almost 17 percent from the previous year. The main reason is higher prices on many of the most traded fish commodities as volumes traded only increased by 0.5 percent. Strong demand in Asia, increasing importdependency in the uS and the Eu but also buoyant demand from many emerging markets underpinned the rise in prices. higher prices also reflect higher in-put costs, for example fuel and fishmeal.
- Exports for 2012 are forecast to total uS$138b, an increase of 9.4 percent compared with 2011. despite slow economic growth and reduced purchasing power in many of the traditional key import markets such as Spain, Italy and france, demand for seafood is strong overall.
- The FAO fish Price Index suggests that fish prices will be 4 percent higher in 2012 than in 2011. rising energy and feed costs are likely to keep fish prices high during the year, especially as alternative protein sources such as meat, are influenced by the same factors.
- fish contributes to food security in many regions of the world. Numerous developing countries rely on fish as a major source of protein; in 28 of them, fish accounts for over 40 percent of animal protein intake.
- New Zealand produces less than half a percent of the world’s seafood supply, but we contribute more than double that in terms of world export dollars.
The table below shows the fish species with the largest
Total Allowable Commercial Catch limits for the october
and April fishing years. hoki has the second highest
total TACC (ie. when each species fish stock is added
together) of the october year stocks. The hoki fishery
has a seasonal peak between July and September.
Squid is a highly seasonal fishery in the late summer and autumn (see graph opposite). It has wide naturally occurring fluctuations in annual abundance.
other than southern blue whiting, the stocks with an April fishing year are shellfish and crustacean stocks.
In the last full catch year, hoki and rock lobster were caught up to their full quota limit. Species such as squid (29 percent) and ling (55 percent) are considerably ‘under caught’. There are several reasons why this occurs, in addition to natural fluctuations in abundance noted for squid. The main one being that while key target species, such as hoki, are fully caught, the catches of commercially valuable species associated with the hoki fishery, such as ling and hake, are caught as a consequence of that key target fishery and they remain relatively under caught as a result.
The table below shows actual catch figures against Total Allowable Commercial Catch levels (TACCs) for the latest full fishing year (up to either April or october 2011).
The columns on the right show figures for the following quarters up to march 2012 and will be added to in future reports as a “running record”.