New Zealand’s onion industry has welcomed the prospect of closer trade links with Indonesia, following the outcome of a World Trade Organisation (WTO) dispute.
Late last year the WTO upheld New Zealand and the US’ case against the South East Asian nation, which centred around 18 agricultural non-tariff barriers imposed by Indonesia since 2011. According to the National Business Review, the barriers covered horticultural products and animal products, and included import prohibitions, sale restrictions and a domestic purchase requirement.
While the move has been viewed favourably by onion growers and exporters, it is unlikely to deliver immediate befits.
“The outcome of the WTO dispute is a positive step but the outcomes for the trade are yet to be seen,” Bostock New Zealand’s Gus Ross tells Asiafruit.
Robert Buchanan, international trade manager of Aozora New Zealand, agrees the move is a step in the right direction, although he too has reservations about the potential for short-term relief, based on Indonesia’s right to appeal. As it stands, Indonesia has until early 2017 to lodge an appeal. If it fails to do so, the WTO’s findings are likely to be accepted by it members, thereby requiring Indonesia to amend its trade policies.
Despite the trade barriers, Indonesia has emerged as a core market for New Zealand onion exports.
“The time and cost for compliance for exports to Indonesia are more than any of our other export markets,” Buchanan says. “However these barriers have not stopped New Zealand from developing Indonesia into a 30,000 tonne market. Indonesia now stands firm as New Zealand’s second largest market, behind Europe.”
Another obstacle New Zealand suppliers will have to contend with this season is overhang from Northern Hemisphere programmes in most of their Asian markets – particularly South East Asia with Dutch product.
“Our Northern Hemisphere counterparts have had a favourable onion harvest in general and volumes of onion stocks are strong,” Ross says. “It looks as though the New Zealand onion export season faces some headwinds early and our window of opportunity will be pushed back to a more normal timeframe, rather than the early start we had last season with some markets.”
A full version of this article appears in the February edition of Asiafruit.
