New Zealand Economy
New Zealand as an economy has always marked its success in almost every field. Generally positive outlook includes challenges. Primary industries like agriculture, horticulture, forestry, mining and fishing industries play an important role in New Zealand’s economy. Overall, primary industries contribute 7.5% of GDP.
Agriculture and Horticulture:
Dairy farming is the predominant agricultural activity. Agriculture alone accounts for around 4% of GDP. Prices of New Zealand’s key agricultural commodities recovered strongly after a constant decline. Dairy and forestry prices declined following March 2014 quarter, with dairy prices down about 50% at the start of 2015 compared to their peak in February 2014. Meat prices rose to a record high in September 2014. Rising prices enabled New Zealand’s major dairy exporter, Fonterra, to lift the final farm gate milk price. Fonterra expects the farm gate milk price for 2014-15 to be significantly lower at $4.70 per kilogram of milk solids. Wine and kiwifruit are the principal horticultural products. Other significant horticultural exports include apples and pears, fresh and processed vegetables, and seeds.
Forestry is the basis of an important export industry which contributes around 1.0% of GDP. 70% of wood from the planted production forests are exported in variety of forms like logs, wood chips, sawn timber, panel products, pulp and paper and further manufactured wooden products, including wooden furniture. During June 2014, value of exports was $5.1 billion, 10.0% of New Zealand’s total merchandise exports. New Zealand produce over 99% of country’s wood as the country’s climate and soils are well suited for the growth. Radiata pine has considerable research investment and has demonstrated its versatility for a wide range of uses. Second most important species is Douglas fir which makes up 6% of the planted forest area. Capacity in logging and wood processing is expected to expand in the coming years.
Fishing industry is one of the major industries in New Zealand. New Zealand has an Exclusive Economic Zone supporting a wide variety of inshore fish. The unpolluted coastal waters are well-suited for aquaculture. The main species farmed as Pacific oyster, green-lipped mussels and quinnat salmon. Fishing industry contributed $1.4 billion in export revenues in the year ended November 2014. Most important export species are green-lipped mussels, salmon, hoki, mackerel, squid and tuna. 90% of New Zealand’s commercial seafood production is exported. Inorder to protect the future sustainability of the fishery industry, the conservation and management is based on quota management system. Stronger growth is expected in aquaculture exports, as salmon farm capacity expands.
Energy and Minerals:
New Zealand is known for its good reserves of coal, natural gas and oil/condensate and extensive geothermal fields. The country has such a geography and climate that it is suitable for the development of hydroelectric and wind power. Three main uses of gas in New Zealand are generating electricity, petrochemical production and fuel for industrial sectors. Over the past decade, with the continuous development of new smaller and more diverse fields, production has increased to 216.5 petajoules in the year June 2014. While the crude oil production during the year June 2014 was 85.3% petajoules. New Zealand is still net importer of oil and crude oil exports are also becoming important. Coal is also New Zealand’s most abundant energy resource. Lignite is mainly used for industrial fuel and sub-bituminous coal for industrial fuel, steel manufacture, electricity generation and domestic heating. In June 2014, total coal production was 4.3 million tons.