NZ an emerging niche player in global Aquaculture

NZ an emerging niche player in global Aquaculture market

New Zealand has begun to successfully carve out a very valuable and promising niche in global aquaculture markets, according to a recently released industry note from the world’s leading food and agribusiness bank, Rabobank.

With abundant clean coastal waters, an unmatched clean and green global image and strong focus on product quality and integrity, report author, Rabobank’s head of Food and Agribusiness Research New Zealand and Australia, Bill Cordingley says that the industry is well placed to become an increasingly significant contributor to the New Zealand rural economy.

According to the Rabobank report, aquaculture is currently the world’s fastest growing protein category for human consumption, and New Zealand is well placed to further leverage its competitive advantages in the future.

Referencing New Zealand Aquaculture Ltd, the report says it is estimated that industry sales reached NZD 390 million in 2006, making aquaculture a relatively small but increasingly important contributor to the New Zealand rural economy. “The growth of the sector has been impressive, up from NZD 55 million in 1986,” Mr Cordingley says.

This growth in aquaculture in New Zealand has reflected international trends according to the report, with production from the key commercial sectors growing from just over 23,000 tonnes in 1990 to over 107,000 tonnes in 2006.

The report cites the three major commercial aquaculture activities in New Zealand as long line Greenshell™ mussel farming, cage farming of king salmon and inter-tidal farming of pacific oysters. Of these the mussel industry has experienced the most dynamic growth, increasing by 470 percent since 1990 to stand just short of 100,000 tonnes.

“New Zealand is also focusing its efforts on developing other aquaculture sectors, including abalone farming, kingfish farming and pearls, to become commercially relevant industries,” Mr Cordingley says.

Globally aquaculture is undergoing a dynamic period of growth based on very strong fundamentals of expanding demand and constrained wild catch supply. And the New Zealand sector is determined to take full advantage of this attractive global opportunity, according to Mr Cordingley, who says that the industry is positioning itself to grow aggressively in coming years.

In this spirit, the New Zealand Aquaculture Council commissioned the New Zealand Aquaculture Strategy with the assistance of the New Zealand Seafood Industry Council and Ministry of Economic Development. The strategy was released in mid-2006 and identified a ten point plan to achieving the industry’s long term goal of reaching industry sales of NZD 1 billion by 2025 (in 2006 dollars).

“This target will not be achieved without a sustained, coordinated and focused effort on the part of all sectors of the industry and without the support of all key stakeholders,” Mr Cordingley said, adding that the newly minted New Zealand Aquaculture Strategy has recognised this reality and has set down a clear path for the industry to move forward in a sustainable and successful manner.

“As pressures increase on all businesses in the global marketplace, it is only by having the highest quality people, strong engagement and cooperation amongst important
stakeholders and a focus on quality, product integrity and sustainability, that the New Zealand aquaculture industry can hope to achieve long-term sustainability. Indications are that this will be a challenge well met,” he says.

The growth of New Zealand aquaculture is closely linked to success in export markets, as is the case for most of New Zealand’s primary industries, given New Zealand’s relatively small population of around 4 million. Thus the strength of the world economy and the ability of New Zealand to access markets and to tap into higher value segments of these markets are key, according to the report.

By any measure, Mr Cordingley says that the aquaculture industry has had considerable success in this respect, with total aquaculture exports growing from around NZD 53 million in 1990 to over NZD 230 million in 2006. Export sales peaked in 2002 at NZD 252 million, largely due to a competitive exchange rate.

“The current strength of the New Zealand dollar is obviously a concern for all export-oriented industries in New Zealand. However, it is having a particularly marked effect on the aquaculture sector,” Mr Cordingley says, adding that currently the dollar is well above the long-term float average, driven largely by domestic interest rates relative to the rest of the world, which are currently the highest since the Reserve Bank of New Zealand introduced the Official Cash Rate in March 1999.

“The fact that aquaculture exports have continued to grow since 2003 despite a generally appreciating New Zealand dollar is impressive, and suggests the industry will be well placed to continue its growth if and when the currency retraces,” he says.

Although the aquaculture industry in New Zealand faces challenges, Mr Cordingley says that it is well placed to become an increasingly significant contributor to the New Zealand rural economy.

“The industry has demonstrated an ability to leverage New Zealand’s key natural advantages and build on the country’s strong export culture to identify and develop important higher value niche markets around the world that will serve the industry well as it drives to achieve over NZD 1 billion in sales by 2025,” he says.

Rabobank New Zealand is a part of the international Rabobank Group, the world’s leading specialist in food and agribusiness banking. Rabobank has more than 100 years’ experience providing customised banking and finance solutions to businesses involved in all aspects of food and agribusiness. Rabobank has a AAA credit rating and is rated one of the world’s safest banks by Global Finance magazine. Rabobank operates in 42 countries, servicing the needs of more than nine million clients worldwide through a network of more than 1500 offices and branches. Rabobank is one of New Zealand’s leading rural lenders and a significant provider of business and corporate banking and financial services to the country’s food and agribusiness sector. The bank has 29 branches throughout New Zealand.

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