New Zealand Agribusiness Report Q2 2016
BMI View: We believe that increased access to international markets, particularly Taiwan and China, willprove to be the prime growth driver for the agribusiness sector in New Zealand over the medium-to-longterm. This will be supportive for both the dairy and livestock segments. The dairy sector in particular willbenefit from export demand growth, as many other countries in Asia are facing growing domestic demandand relatively limited production capacity. However, the dairy sector will suffer over the short term due tolow prices on the international market. We believe prices will pick up again later in 2016.
Milk production growth to 2019/20: 9% to 23.5mn tonnes. Given the small domestic consumptionbase and the high productivity of the sector, long-term expansion will mainly come from exportopportunities, particularly to Asia and the Middle East, which are forecast to enjoy significant dairyconsumption growth over our forecast period.
Milk powder production growth to 2018/19: 14% to 1.6mn tonnes. Across all the dairy segments,export opportunities (particularly to China) will be the main growth drivers over the medium term.
2016 real GDP growth: 2.3%, down from 2.4% in 2015. Forecast to average 2.4% between 2016 and2020.
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