A clamour for milk has loosened ties between Oceania's two
biggest power, promoting China to the top buyer of New Zealand exports, after 24
years when the spot has been held by Australia.
New Zealand's exports to China soared 45% to NZ$9.96bn in
2013, overtaking shipments to Australia, which fell in value by 7.8% to NZ$9.13bn,
official data showed.
"China became our top annual export destination in 2013, a spot
Australia has held since the year ended September 1989," said Louis
Holmes-Oliver, industry and labour statistics manager at Statistics New
The boost in trade with China reflects New Zealand's growth
to become the world's largest milk exporter, at a time when many emerging countries
are struggling to meet demand for dairy products spurred by increasing
population and prosperity.
China's dairy import demand has been especially strong,
fuelled also by disappointing growth in domestic output last year, thanks to
poor weather in many major producing regions, such as Heilongjiang province.
And it has sought in particular milk powder, on which New
Zealand has focused much of its milk processing capacity, with the increasing
role of Chinese women in the workplace prompting a spread of bottle-feeding of
children, and growth in infant formula.
"Almost half our milk exports went to China," Ms Holmes-Oliver
Chinese consumers are also sceptical over the quality of
domestic milk, following the melamine tainting scandal, although New Zealand
product itself became the subject of a food scare - which turned out to be a
false alarm – over botulism contamination in milk powder shipments from
Cows replace ewes
New Zealand's overall exports of milk powder soared 27% to
NZ$8.7bn last year, with butter and cheese accounting for a further NZ$4.7bn.
That far exceeded shipments of meat, including the lamb for
which New Zealand was noted before its farmers began ramping up in dairy in the
New Zealand milk production soared from 7.7m tonnes in 1990
to a record 20.6m tonnes in 2012, falling a little last year thanks to drought.
Indeed, by volume the country's whole milk powder exports
rose only 2.0% last year, with the stronger growth by value a reflection of the
jump in dairy prices fostered by Chinese growth and constrained New Zealand
Value vs volume
In Australia, where production too suffered last year, shipments
fell 13.9% to 289,601 tonnes in the July-to-November period, the first five
months of the 2013-14 marketing year, according to Dairy Australia.
However, by value, exports grew by 11.7% to Aus$1.23bn.