Wine industry the big export mover

The outlook looks bright for the rapidly expanding Otago wine industry.

Wine is set to become the primary sector's sixth billion-dollar export earner from 2012, with predictions earnings will reach $1.3 billion.

Data released by the Ministry of Agriculture and Forestry yesterday showed that by 2012 the value of wine exports would almost double from 2008, nudging ahead of kiwifruit and almost double wool, once one of our most valuable exports.

Maf's situation and outlook report on New Zealand agriculture and forestry said this year's harvest was exceptionally big, boosting export volumes by 30%, but generic growth would increase export volumes by 50% by 2012.

New Zealand Winegrowers chief executive Philip Gregan said the industry was on target to make $1 billion in exports by 2010, but the key was to remain market-led not production-driven, a challenge given new plantings of 2000ha a year.

The world still recognised New Zealand wine as high quality and, as it represented less than 1% of world consumption, Mr Gregan said New Zealand was able to target markets paying more than $NZ11 a bottle.

Its reputation allowed exporters to trade on the international reputations of Marlborough sauvignon blanc and Central Otago pinot noir.

"Our position in the market must never disappoint the consumer in terms of quality of offering," he said.

The Maf report reveals primary exports would continue to underpin the economy.

Receipts from dairy exports were expected to hit $12 billion next year, 40% more than two years ago, while beef exports would grow from $1.5 billion to $2.26 billion by 2012.

The sheep industry was expected to break out of its depressed state, despite sheep numbers falling 4% in the year to June 2007 and being expected to fall further.

As a result, the volume of export lamb was forecast to fall 11% between now and 2012 but export earnings to increase 25%.

Forestry would remain a key export earner with log and pulp prices picked to rise more than 30% in the next five years but returns for timber and panel would remain flat on the back of weak building demand.

The net result would be that export dollars from the sector would rise from $3.3 billion this year to $4.5 billion.

Returns from wool were expected to rise on the back of a 40% increase in prices, with export receipts expected to increase 29% in the next five years to $795 million.