New Zealand Sheep and Goat Meat Export Value Up 39% YoY in July 2022 Driven by a Weaker New Zealand Dollar

Published 2022년 8월 31일

New Zealand sheep and goat meat export value rose 39% YoY in July 2022, driven in part by a weaker New Zealand Dollar, which fell against the US dollar by 11% from July 2021 to July 2022.

New Zealand exports for HS Code 0204 products, which comprise all unprocessed sheep and goat meat, fresh or frozen, came up in July at NZD 385.52 million, a 39% YoY increase. This was the largest YoY increase since August 2018.

Month over month, export value declined, following the typical trend of exports of this product, but the fall was much less pronounced compared to the one in the same month in 2021, thus explaining the large YoY increase in 2022. July 2022’s monthly decline was also much less pronounced compared to July’s average during 2016 through 2020.

Source: Tridge and New Zealand Statistics

Export value for these products typically begins the year on the rise, reaching their peak in February or March. Afterward, export value tends to decline to reach their lowest point of the year in August or September.

It's worth noting that this sharp difference between July 2022's and July 2021's export value -the 39% YoY increase- has been partially driven by a weaker New Zealand dollar, which in July averaged its lowest level against the US dollar since May 2020, just after the pandemic started. The kiwi depreciated 11% from July 2021 to July 2022.

Export value in terms of US dollars increased in July 2022 by 23% YoY, considerably lower compared to the 39% rise in terms of NZD dollars. Still, in terms of USD, it was the fastest YoY increase in a month since October 2021. A weaker NZD also partially caused a slower decline in quantity exported, as exports become more attractive to foreign buyers.

Source: Tridge and New Zealand Statistics

Cumulative exports for these products from January through July 2022 totaled NZD 2.95 billion, up 12% YoY. Considerable YoY increases in most major destinations more than offset a large decline in exports to China.

China remains the largest market for these products, but exported value to this location declined by 27% YoY. China's share in this export value declined from 51% in Jan-Jul 2021 to 34% in Jan-Jul 2022, as a result.

Meanwhile, all other major destinations experienced considerable YoY growth. Exports to the US grew by 49% YoY to NZD 401.7 million. As a result, the US grew its market share from 10% in the same months in 2021 to 14% in 2022.

Exports to the UK grew 39% YoY, Germany 55% YoY, Netherlands 62% YoY, and Canada 36% YoY.

Source: Tridge and Statistics New Zealand

All in all, a weaker New Zealand dollar should remain supportive of exports through the rest of 2022, as it incentivizes producers to export more, assuming no price change in USD terms, or external buyers to import more, assuming no price change in NZD terms. So far in August, the NZD/USD exchange rate has averaged $0.62, just 1% above July’s levels, but still down 10% compared to August 2021. It’s expected that the NZD remains weak against the US dollar through the last months of 2022 and at least through early 2023. The market expects further interest rate hikes by the Federal Reserve, driving expectations of further strength in the US dollar.