Exporters take a double blow as prices fall and currency rises

NZ  exports have been  hit by falling world prices and a rising NZ dollar. It’s a sharp reversal from earlier in the year when ANZ Bank  was reporting its  commodity price index  had returned to its record breaking run  and stood  nearly  20%  above the level  where it had been  12 months previously.

The price index has fallen 3.9% in November on the previous month to be 11.5%  lower on the same month a year earlier.

The  pain is all the more severe, since overseas markets  are suffering  from inflation and one might have expected  returns to be higher.

 ANZ Agricultural economist Susan Kilsby said exporters suffered a “double whammy” because the NZ dollar had risen in value knocking export returns by 9.1% for the month, with returns at their lowest level since January 2021.

Nash delivers a tip top report on ice cream and its export potential – and maybe scientists will scoop up some research funding

We are pleased to report that science continues to loom large in the considerations of government policy-shapers.

We say this on the strength of something we noted in the Food and Beverage Information Project Report – Ice Cream, released this week to promote ice cream and its export potential.

The report says its information

“… will provide much greater insight into the industry, which is useful for a range of policy developments, from regulatory frameworks to investment in science and skills and facilitating access to international markets.”

We are uncertain, of course, whether this is a reference to science as we knew it before the Treaty of Waitangi was reinterpreted in recent years to require the merging of matauranga Maori with the teaching and practice of science.

On the other hand, we may find that ice cream was being made here long before Captain Cook turned up and appropriate Treaty partnerships – injections of the Maori knowledge that has become a politically critical component of modern-day Kiwi science and research – would greatly enhance the quality of the results.

Look who’s singing the farm sector’s praises – none other than the Minister whose environmental rules constrain them

Labour ministers  are   beating  the farming  drum  (as never before).

On  stage  at  the Fieldays at   Mystery Creek, one of  the  first  out of the block (given the  absence  of Agriculture  Minister  Damien O’Connor  negotiating  free  trade  in London with the UK)  was  Oceans  and  Fisheries Minister David  Parker. 

He  was  singing  the  praises of  the  sector,  which  might have come  as a  surprise  to  many  within the  farming  industry,  who  have found  the strictures  he has delivered from his Environment  portfolio  rather  hard  to  digest.

Parker   used  the  Fieldays platform to  talk up  the sector which  he  declared had performed remarkably well in the face of Covid-19.

“NZ’s farmers, growers, fishers, processors, makers, and crafters have risen to the challenges that 2021 has presented”.

Farming exports are forecast to hit a record $49.1bn, up 3.4% over the next year, and The Situation and Outlook for Primary Industries report says by June 2025 the sector’s exports are forecast to reach $53.1bn.

The PM reminds summit of state funding on tap to help farmers meet the demands of govt’s environmental agenda

The PM’s farmer and grower audience would have been heartened when she said the election success of Labour in rural New Zealand was a huge honour, but with it came huge responsibility and huge opportunities.  They would have been braced, too, for her promotion – and defence – of the government’s  environmental agenda.

The vote represented both an endorsement of the direction the government is heading and a requirement to work more closely with rural communities, Jacinda Ardern told the Primary Industries Summit.

I have made it very clear to our all our MPs, as well as those in provincial seats, that the primary sector is a key partner and stakeholder for this Government, and I want to see ideas permeate up from the grass roots as well as our engagement at a leadership level.

She then articulated three key objectives for the Government –

• continuing to keep New Zealanders safe from Covid,
• accelerating our economic recovery, and
• laying the foundations for the future.

And she insisted (hurrah!):

Primary industries are at the heart of each objective.

Parker has kept the trade channels open – now let’s see how Robertson’s budget can boost production

Audrey  Young, political editor  of the  NZ  Herald,  writes   that  Jacinda Ardern  has  her  A team to handle  the Covid-19 crisis and then her  AAA team.  There are  four members in the A team – herself,  Grant Robertson, Winston Peters and David  Parker.

“They are  keeping watch on the  bigger picture to how  NZ emerges from the crisis. Her  AAA  team  has one member, Robertson”.

Point of  Order  won’t  quibble  with Young’s  arithmetic  on the  AAA team because the point  she is  seeking to make  is valid:  Robertson  is  now  the undisputed leader  in Labour’s   bus test — the  informal test that answers who would  take over  if the leader accidentally  fell  under a  bus.

“It would be Robertson, no question. Kelvin  Davis is deputy in  name  only”.    

As  Young notes,  when  Robertson  deputises  for  Ardern, it is  an  effortless  switch.

Robertson will  consolidate  his  position  in the  Labour  hierarchy  if he succeeds  this week in  building a smooth  road to  recovery  in  this week’s  budget.

Behind  the Ardern-Robertson   leadership  in the  Covid-19   crisis,  David  Parker  has  supplied  much of the  intellectual  grunt.

Updates from listed companies bring some economic comfort during the Covid-19 crisis

As  New Zealand   faces the  most brutal   recession in  living memory,  the  battle  to preserve   the core  of the  economy deepens.  Companies  are  cancelling  dividends  to protect what cash they have, others  are  reaching  for  financial  aid  from  their banks or  the government.

Yet for   some   businesses, notably  the  big  supermarket  chains,  the crisis  is accelerating    their  cash   flows.

Point of Order   has surveyed an array of   companies listed on  NZX, particularly in  several sectors—food  production, health and pharmaceutical  supplies, transport, agriculture  services—   which  have issued  updates. These should provide   comfort  to  their shareholders, and the market generally.

Latest  to  do so  is   King  Salmon,  the world’s largest aquaculture producer of the premium King salmon species.   Employing 500 people,  it operates  within the primary industry food producer category which has been included in the government’s list of essential services.

In its update to the  NZX, it  says :