National’s failed commodities export strategy exposed

National’s strategy to rely on commodities such as milk powder and logs has been exposed in the September trade figures released today, the Green Party said.

“National’s strategy to hang all economic hope on exporting ever-increasing volumes of milk powder and logs, is shown to be misguided,” Green Party Co-leader Dr Russel Norman said today.

Statistics New Zealand (SNZ) reported the values of total exports fell 3.0 percent in the September quarter, following a 7.5 percent fall in the June quarter, with falls for both quarters led by dairy products and logs. Dairy exports were down 8.8 percent in the September quarter despite a 2.7 percent rise in volume.

SNZ said manufactured exports fell 2.7 percent for the quarter and 0.9 percent for the year. The trade deficit was $1.0 billion for the quarter and $1.4 billion for the month of September, equating to 37 percent of exports.

“Alarm bells should be ringing that maybe not all is well with the rock star economy,” Dr Norman said.

“Milk powder prices have plunged by around 50 percent this year. National essentially bet on dairy prices continuing last year’s rise. But, unsurprisingly, they have discovered that markets respond to prices.

“Not only is the idea of relying on ever increasing volumes of dairy production bad for the environment, it is bad economics to depend so heavily on one product.

“Our future should be in adding value. That creates more jobs, diversity and wealth. As well, added-value products are less vulnerable to the vagaries of markets. National is not putting enough into Research & Development to support the development of high value exports,” Dr Norman said.