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Strong Demand Continues for NZ's Organic Produce

Demand For New Zealand’s Organic Produce Continues To Be Strong

An annual survey of organic exporters has shown an increase in some overseas markets – such as Europe - and in some market segments – such as fresh fruit and beverages.

“The organic market is important to New Zealand. The organics industry’s total production last year was around $140 m with an estimated $70m coming from exports – about the same as the previous year. It is estimated this will grow to $500 m in the next four years,” says Jon Manhire, Executive Director of Organic Products Exporters of New Zealand Inc (OPENZ).

Overall, the organic export market was lower than anticipated and OPENZ believes there are two key reasons for this.

“While we get a reasonable return rate for the survey it is voluntary and a number of players don’t complete it because of commercial sensitivities. For this reason the survey results need to be considered indicative.

“In addition, the domestic organics market is growing at a staggering rate. In 2000 an Otago University study showed the domestic market to be $32 m and this more than doubled to $71 m the following year. There are fewer risks and costs in supplying locally so we believe some small to medium sized growers are choosing this option rather than exporting,” Mr Manhire says.

OPENZ recently funded the development of a market access agreement with the European Union and the survey shows that Europe is becoming the dominant market for New Zealand organic produce. “Europe has taken over from Japan, which was our largest market three years ago,” Mr Manhire says.

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The survey showed exports of organic fresh fruit was slightly up last year compared to the previous year.

“Organically grown pipfruit is currently getting significantly higher prices than those paid for conventionally grown and exported fruit with exporters predicting the premiums will remain between 50 and 100 per cent,” says Mr Manhire.

Exports of organic meat and wool remain stable. “There is a growing high quality niche market for organic meat with farmers being paid premium prices of up to 50 per cent more than conventional farmers,” he says.

And the survey shows organic beer and wines are starting to make an impact on the export market.

“New Zealand’s organic produce has a good reputation and the survey indicates there are good opportunities for growth. For New Zealand to become a major force we need to encourage more production. One strategy to achieve this is to undertake the research on ways to minimise the perceived and real risks associated with organic production and share this knowledge with those farmers who are interested,” says Mr Manhire.

OPENZ uses the annual survey results to monitor trends and to develop and refine strategies to ensure it targets resources where they are most needed. The survey is also used to identify any constraints exporters are experiencing so OPENZ can work with growers to overcome these.

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