European Frozen Fry Exports to New Zealand Continue to Increase

According to the Potatoes New Zealand (PNZ) Frozen Potatoes Trade Report No. 4, published in December 2022, there are concerns that the export price of frozen fries from Belgium and the Netherlands to New Zealand was essentially stable at USD850 per tonne.

This has increased over the past two months to approximately USD970 per tonne, but it is still less than export rates from Belgium and the Netherlands to other international markets, which are currently around USD1,030 per tonne.

The pricing from the EU is used as leverage to demand lower prices from the NZ processors of frozen fries, which could have ramifications for the New Zealand business in terms of a prospective compression on gross margins.

The previously reported dumping margins from Belgium and the Netherlands to New Zealand can only have increased given the disproportionate export price to NZ compared to all other worldwide markets.

“If this issue is significant, the trade remedies legislation is still a tool the NZ industry could leverage. An anti-dumping application could be put together to prompt the New Zealand trade remedy authorities to investigate again,” according to PNZ representatives.

According to NZ experts, this situation can only lead to the loss of New Zealand's market share for the local producers. Last quarter it was estimated at 3%, but with volumes still increasing it may be more.

Imports from the Netherlands alone are now showing strong growth at 63% in the quarter.

New Zealand Frozen Potato Exports

Latest quarter NZ exports to Asian markets have been a struggle with declines versus a year ago for the top 4 (Malaysia, Thailand, Taiwan, and Japan). These Asian markets are becoming increasingly contested for market share with suppliers from India, China, and the EU all increasing their market share latest quarter.

The NZ data shows a total export growth of -15% latest quarter and 8% annual growth by volume. Value growth is now ahead of volume growth at -6% on quarter and 10% annually indicates NZ frozen potato exporters are starting to pass on price increases to offset the significant input cost increases they will have experienced.

Some opportunities presented themselves for both Hong Kong and Korea a year ago that has not been repeated this year but could be an opportunity to reach out to those customers again.