The Ministry for Primary Industries yesterday launched its latest Situation and Outlook for Primary Industries (SOPI). The report notes that seafood exports are forecast to grow by 8% to a record $2.1 billion to the year ending 30 June 2023.
After taking a hit during COVID-19, the rebound is welcome news, and forecasts for later years continue this upward trend.
Much of the revenue increase is driven by strong pricing as the food service industry in key markets begins to open up again after years of pandemic-related restrictions. China, the US, Australia, and the EU remain our top export markets and free trade agreements with the EU and UK should see better returns to exporters in the coming years. New Zealand seafood is known to be a premium product and global demand is strong based on quality and our sustainability credentials.
Rock lobster, hoki, squid, mussels and salmon saw significant price increases with a record $371 million for rock lobster exports to the year ending 31 March 2023. And aquaculture is expected to top $510 million in exports this year. Favourable foreign exchange also provided a tailwind, although that may turn around on global sentiment.
While all this is good news, it only tells half the story. While revenues are up, costs are too. Fuel remains expensive by historical standards, labour costs are high, and freight remains costly.
On top of this, government levies have hit record levels. MPI's current consultation on cost recovery proposes levies of $41.4m, an 11% increase on last year and a 16% increase on those recently charged.
These factors are everyday concerns for the people the public rely on to supply their seafood. Owner-operators, quota holders and independent fishers see their income eroded by expenses. The combined effect of financial pressures threatens profitability and could dampen aspirations and ability to invest in better vessels, new technology, training, and research.
Increased costs that undermine economic performance also hamper goals to advance better environmental performance and grow the contribution to the people and communities that rely on the seafood sector. Those are key themes of the Industry Transformation Plan (ITP) that has recently been consulted on.
The ITP recognises that seafood has a strong future in New Zealand, but also signals that changes are needed, and industry supports that view. Collaboration is key. A shared vision for the seafood sector, support for investment, reduced costs, and removal of unnecessary barriers will be important to realise the aspirations in the ITP and ensure that future earnings grow faster than costs.
