October/November 2020 - Bay of Plenty Business News

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4 BAY OF PLENTY BUSINESS NEWS October/November 2020 From the editor www.bopbusinessnews.co.nz CONTACT INFORMATION PUBLISHER Alan Neben Ph: (07) 838 1333 Mob: 021 733 536 Email: alan@bopbusinessnews.co.nz EDITOR David Porter Mob: 021 884 858 Email: david@bopbusinessnews.co.nz PRODUCTION Copy/Proofs/Graphic Design Times Media – Clare McGillivray Ph: (09) 271 8067 Email: clare@times.co.nz ADVERTISING INQUIRIES BUSINESS DIRECTOR Pete Wales Mob: 022 495 9248 Email: pete@bopbusinessnews.co.nz ELECTRONIC FORWARDING EDITORIAL: News releases/Photos/Letters: david@bopbusinessnews.co.nz GENERAL INQUIRIES: info@bopbusinessnews.co.nz Bay of Plenty Business News has a circulation of 8000, distributed throughout Bay of Plenty between Waihi and Opotiki including Rotorua and Taupo, and to a subscription base. www.bopbusinessnews.co.nz Bay of Plenty Business Publications 210/424 Maunganui Road, Mount Maunganui, 3116 Bay of Plenty Business Publications specialises in business publishing, advertising, design and print media services. For a long-time political junkie like myself, October 2020 is about as good as it gets. We have the astonishing spectacle taking place in the US as the battle between Donald Trump and Joe Biden nears a climax. And we have our own – less insane, but still vitally important decision coming up after New Zealanders conclude voting on 17 October. Assuming we have a result by the time we publish our November issue, we will be devoting our next cover story to analysing the implications of the new government’s policies for businesses in the Bay. But as we saw after the last election, MMP will not necessarily deliver an immediate “final” result. As veteran politician Richard Prebble reminded readers in a recent opinion article dig at the Jacinda Ardern coalition: “Under MMP, the losers can win.” Prebble is of course notable for having jumped from Labour to the then new ACT party and subsequently becoming its leader in the 1990s. Going into the final days of campaigning, our latest New Zealand elections are the hardest to call in recent history. They have come down voters deciding on two key issues: who can handle the ongoing issues of Covid-19 most effectively, and who is best placed to help lead New Zealand’s economic recovery. The polls have so far shown consistent, though slowly ebbing, support for the Ardern coalition, a slight improvement from a low position by National, and a strong swing to ACT. However, I tend to be something of a sceptic of polls. I doubt people really confide their true beliefs to phone poll surveyors, and don’t see why online surveys should be necessarily any more reliable. Even the polltakers admit to a three percent plus or minus error factor. What may be more significant this election, is the very large number of undecided voters showing up in most recent polls. But there is no doubt polls give mainstream media something to write and broadcast about. As we went to press, there was massive publicity around the NZ Herald-Kantar Vote2020 poll, published on 30 September. This favoured Labour on Covid-19 protection, but gave National a slight edge on rebuilding the economy. In my view, there are a few standout issues at play in our current elections and they will remain potent factors regardless of which party manages to form a government. The return of Crusher Collins One is that Judith Collins – after briefly dallying with a softer, kinder image – has happily re-embraced the “crusher” nickname that defined her. The opening televised leaders’ debate was fascinating as the Judith Collins of the past elbowed her way back. An interesting recent analysis in the NZ Herald by former National MP and now professor of public policy Marilyn Waring and Dr Ali Rasheed, a graduate of Auckland University of Technology, noted that Collins’ approach to the first debate resulted in her commanding the majority share of both the questions, and the answer time. The authors said: Collins’ “adoption of the style of boys in a classroom was a clever tactic for the first debate and the full production team fell for it.” It would seem National has finally come to – or more likely Collins has opted to return to – what she does best. Those who don’t like her style will continue to respond to Ardern’s more softly, softly approach, but wavering National voters are likely to respond favourably to the old Crusher. The television debate included Collins’ classic response to Ardern saying she wasn’t drawn to blood sportstyle contests, of “Poor wee thing.” Or Collins’ description of Ardern’s raising her ancient SFO investigation, which exonerated her, as “a low blow” and saying: “Gosh, the veil is definitely slipping, isn’t it?” David Porter [The New Zealand elections] have come down to voters deciding on two key issues: who can handle the ongoing issues of Covid-19 most effectively, and who is best-placed to help lead New Zealand’s economic recovery.” Nonetheless, those who like Ardern’s leadership style and performance are likely to stick by her. Though Labour supporters might be wise not to assume their victory is a done deal, and make sure they actually get out and vote. But whether Collins is Prime Minister or Opposition leader, she will prove a potent force. It is difficult at this stage not to write off NZ First. I suspect that Winston Peters’ days of dominating a coalition on his own terms – as he has done so successfully if confusingly – in the current government, are over. The Greens after some missteps seem likely to claw their way back into parliament, according to some polls. But if they remain Labour’s only viable coalition party, they are unlikely to be much help to them in winning the elections. The Greens’ somewhat unrealistic commitment to a wealth tax that would capture a large proportion of ordinary Kiwi households, may cause voters who might otherwise support Labour, to have second thoughts. The surprise performance has been from David Seymour and the ACT party. In late campaigning, Seymour has tried to position himself as the “real” National party. The reality is he is more likely to be cannibalising NZ First than the National Party. The problem both the major parties face, is a lack of clearly detailed and differentiated policies. However, the general themes that have emerged are much as might have been expected. Labour’s announced policies tend to reconfirm their view that bigger government is better, and that only government knows how to spend taxpayers’ money. National’s policies tend to take the approach that business should be left to get on with what it does best. The reality is that whoever wins power will be committing previously unimagined billions of dollars to keeping the population employed, or at least fed if not always well-housed. One consolation we can all take is that, unlike in the US, we are not facing a political squabble that has the potential to unleash continuing civil dissent whatever the outcome. The Republicans are led by Trump, a well-documented liar, the leak of whose long-hidden tax returns prove him to be one of the least successful businessmen, and most personally indebted presidents in US history. His Democratic opponent Biden is a competent, seemingly decent but aging politician, who got the nomination because mild socialist Bernie Sanders was too “left” for party elders to stomach. Whoever wins in New Zealand can be expected to at the least try and do their best for our country, and to be largely supported, while being held to account, by a loyal opposition. We are lucky. HOLDING BONUS BONDS? Contact us to discuss your investment options. 0800 272 442 / craigsip.com Craigs Investment Partners Limited is a NZX Participant firm. Adviser Disclosure Statements are available on request and free of charge. Investments are subject to risks and returns are not guaranteed.
October/November 2020 BAY OF PLENTY BUSINESS NEWS 5 Avo prospects positive for new season Prospects for the Bay of Plenty’s new avocado season are looking positive, with export volumes forecast to rise and strong prices buoyed by lighter crop volumes in Australia. By RICHARD RENNIE NZ Avocado chief executive Jen Scoular said the total crop estimate for this season is 7.2 million trays, the same as the actual crop volume harvested last season, with almost 4.5 million trays destined for export. Some growers here have reported slightly smaller fruit because of the dry summer, but Scoular said more will be known about average fruit size over the coming month as the export season gets underway. Katikati grower Don Grayling said the dry weather through summer has influenced this year’s crop, but irrigation had helped reduce some of the dry’s worst effects. He has also noticed picking has started particularly early. “We are feeling optimistic, the downturn in Australian crop volumes will certainly help growers here,” he said. The Bay of Plenty continues to be the dominant area for avocado growing, but shifts are occurring as the concentration of new orchards grows in the north. Recent significant investments from both iwi and corporate growers into green fields orchard conversions in Northland, with some as large as 200ha by the end of the decade, means the current 60:40 split between Bay of Plenty and Northland is likely to even out over the next five years. “The investment into avocado development in Northland has been made off the Jen Scoular back of confidence in the wider avocado industry, the ability to utilise research and development to get better productivity, and utilising scale of operations to reduce relative on-orchard costs,” said Scoular. New orchards harvesting this year Some of the large new orchards planted in Northland began harvesting for both export and domestic markets this year. “We expect to see continued increases in volumes from these newly planted orchards over the next five years.” Australia remains the dominant export market for New Zealand fruit, accounting for about 70% of exports, and supply to Australia is expected to be boosted this year thanks to an anticipated strong season here. Aussie growers in southern and western Australian growing regions are also anticipating lighter crops, thanks in part to a drier season. In coming years Australian volumes are expected to increase significantly because of large new plantings through Western Australia’s south-west district. But for the coming season the Western Australian volumes are forecast to be down. “New Zealand exporters anticipate this will result in a good market opportunity for New Zealand avocados in Australia for the 2020-21 season,” said Scoular. Over time as the Western Australian fruit comes on stream it is expected to impact upon the volumes New Zealand growers can sell into Australia. It has prompted greater focus here on exporting to non-traditional markets that this year including India, Pacific Islands, Thailand, South Korea and Singapore, alongside the Chinese market. New Zealand’s entry to the China market in 2018 was initiated with a 40,000 tray commitment. Since then the volume has ramped up with the larger, more expensive New Zealand fruit being differentiated by quality, food safety and traceability claims. “Our harvest maturity requirements are the highest in the world, and this combined with our rich volcanic soils Michael Franks Even though they have put more plantations in Western Australia, their crop is significantly down this season, by almost half, so the outlook for us here is very good in terms of Australian exports.” – Michael Franks and temperate climate produce and avocado with a consistently great taste profile and unique nutrient properties,” said Scoular. Thailand market growing Thailand is expected to be New Zealand’s largest Asian export market this year, taking 300,000 trays. However, Scoular cautioned export to markets faced Covid-19 challenges including a reduction in air freight capacity, and pressure from Peruvian fruit in some of New Zealand’s favoured markets. Michael Franks, chief executive of Seeka, which has been focusing on increasing its share of the avocado market in recent years with its premium branded fruit, said Australia would remain a significant market for the company in the immediate future. “Even though they have put more plantations in Western Australia, their crop is significantly down this season, by almost half, so the outlook for us here is very good in terms of Australian exports.” Australia consumption per capita of the fruit has risen steadily over the past decade by over 50%. However, Franks said Covid-19 has altered the demand profile in the past few months around the world. “A lot of fruit goes into food service, and with a drop off in eating out in the likes of Mexican restaurants means the demand there has dropped. Big suppliers out of Mexico and South America are moving more into fresh whole fruit supply, which of course brings more competition to the likes of us.” However, he was confident Seeka’s focus on providing high quality, premium fruit would hold it in a strong position against the smaller fruit from South America that tended to have a higher water and lower oil content in their flesh. He said expectations of $25-$35 a tray was very realistic this season.
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