New Zealand’s agricultural exporters will need to look beyond market access alone and increasingly focus on their ability to reliably get product to customers, as geopolitical tensions reshape global trade, Rabobank says in a new two-part research series.
In the first report, From Market Access to Systems Access, the food and agribusiness banking specialist says tariffs are only one element of a much broader shift in the global trading environment, with governments around the world increasingly using finance, technology, energy, shipping, infrastructure and food policy to pursue strategic objectives.
Report co-author, RaboResearch senior agriculture analyst Emma Higgins said this meant the critical question for New Zealand agribusiness was evolving from “can we sell?” to “can we deliver?”
“Market access will remain essential, but getting a product into a market on favourable tariff terms is only part of the equation,” she said.
Emma Higgins, Senior Analyst Agriculture
“New Zealand also needs reliable access to all the systems required to produce, verify, finance, ship, insure and ultimately get paid for that product.
“And as these systems become more contested and conditional, the ability to keep delivering through disruption is likely to become increasingly important.”
RaboResearch identifies New Zealand’s distance from major markets – along with its reliance on imported fuel and fertiliser, international shipping, cold-chain capacity, digital systems and global finance – as key areas of exposure.
“Resilience means building ‘logistics optionality’ before it is needed. Exporters need to understand their dependence on particular routes and carriers, as well as their exposure to critical chokepoints and ports,” Ms Higgins said.
“Options include alternate routes and carriers, inventory buffers, offshore storage, distribution hubs, flexible freight contracts and better visibility of vessel and port risks. Smaller ships using secondary routes may also reduce blockage and vulnerability risks.”
Reliability becoming more valuable
Ms Higgins said the changing environment was not simply a story about rising risk, but also presented opportunities, which New Zealand was well placed to capture.
“New Zealand is unlikely to compete with the world’s largest agricultural exporters on scale, subsidy or geopolitical influence, but that doesn’t mean we can’t build advantage elsewhere,” she said.
“We have attributes that are becoming more valuable in a fragmented world – trusted institutions, strong biosecurity systems, food-safety credentials, transparent regulation and a reputation as a reliable trading partner.
“The opportunity is to build on those strengths and become one of the world’s most dependable suppliers of high-quality food.”
Ms Higgins said customers facing significant disruption costs or food-security concerns may increasingly consider the resilience of a supplier alongside traditional factors such as price, quality and product specification.
“For New Zealand exporters, the commercial return from assured supply won’t necessarily be an immediate price premium,” she said.
“It could instead come through preferred-supplier status, longer-term contracts, stronger customer retention and greater margin resilience.
"The opportunity is therefore not trust alone. It is the ability to translate trust into lower customer risk."
Six capabilities for a more uncertain world
The second report, From Market Access to Assured Supply, identifies six capabilities New Zealand agribusinesses can consider strengthening: market optionality, logistics optionality, input and energy security, verification and data capability, financial resilience and strategic partnerships.
It also highlights five investment priorities for the next five years: digital traceability and assurance systems, port and logistics resilience, on-farm energy resilience, biosecurity capability and deeper strategic customer partnerships.
Ms Higgins said strengthening these areas did not mean attempting to eliminate all supply-chain dependence or investing in resilience at any cost.
“New Zealand is a trade-dependent economy and global supply chains will remain fundamental to our success.
“The goal is to understand where critical exposures sit, identify credible alternatives and selectively invest in capabilities that both improve continuity of supply and create commercial value.”
For boards and senior agribusiness leaders, she said, the issue could be distilled to a straightforward test – ‘could the business continue to meet its most important customer commitments during a major disruption?’.
“That requires thinking across markets and customers, but also shipping routes, critical inputs, working capital, data and verification systems, insurance, contracts and strategic partnerships,” Ms Higgins said.
“New Zealand has spent decades building a strong reputation for producing safe, high-quality food. The next opportunity is to complement that reputation with an equally strong proposition around reliable delivery.
“In a more fragmented and disruption-prone trading environment, assured supply can be both a resilience strategy and a commercial strategy.”
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