N.Z. Prospects For Exports Reviewed

Press, Volume CI, Issue 29984, 20 November 1962, Page 20

N.Z. Prospects For Exports Reviewed

Already the dairy industry has had to abandon its contractual riigh-t of unrestricted entry to the United Kingdom for its butter, says the Bank of New South Wales "Review,” discussing the implications for New Zealand of Britain’s negotiations with the European Economic Community.

“Only by a system of quota restrictions on imports of butter from all sources could the United Kingdom limit dumping on their market of surplus European product'.on. Although prices in the United Kingdom have recovered somewhat, they are still too low to cover the guaranteed price to New Zealand producers and the Dairy Indus try Reserve Fund, already in deficit, is expected to incur a further loss m the 1961/62 season.

"For meat the outlook is obscured by uncertainty the future conditions of entry to the United Kingdom market and by the volume of production in that country. The UnitiM States market, which has recently been an important outlet for New Zealand meat, is highly exacting for the quality standards which New Zealand is primarily cole to supply Vigorous effrrts are in train to develop new outlets for both meat and dairy products in south-east Asian countries, but these countries do not stem likely in the immediate future to offer a volume of sales which will permit any expansion of total export earnings.

•‘Although wool has provided over one-third of export earnings in recent years, there is little hope of any substantial increase in euher prices or volume of exports, ine types of wool which pre-

dominate in the New Zealand nip are s ibiect moreover, to increasing competition from synthetic fibres for manv of their traditional' uses." Diversification

“Against thir- dismal catalogue, ’’ says the “Review.’ ■ the attempts to diversify products and markets show commendable spirit, but the orders of magnitude of the necessary increases are formidable. It has been estimated Nev Zealand will require an annual addition of £2om in its export earnings, together w.ui a susa.net! capital inflow during tne ensuing decade in order t: maintain the expansion of its economy on its present prt tern. The suggestion ol e customs union with Aurt alia holds out a prospect o’ a significant n.uket for Zealand foe.'staffs, but the implications for New tecland’s own m< ustnal eriiattsion requhe caieful exam.aition, quite tpart from the profound adj -stments wh ct such a unitn would er.taff for the Australian dairying industry. "For the immediate future, however, it is mear that exports are unlikely to rise sufficiently. Continued selective restriction of imports appears inevitable to ensure the supplies of raw’ materials and semi-processed goods needed to maintain the scale of activity of local industry. Although this policy will help to enforce the trend of consumption towards commodities with a higher local content hi their production, it will lead inevitablv to a higher local cost strueure and thus make more difficult the problems of diversifying exports and opening up newmarket cutlets for exirting exports in face of world competition/’