New Zealand's primary sector is enjoying a sweet spot as a broad range of commodities play catch-up, with the shift higher in dairy prices. Economists said data last week, which showed the country's merchandise terms of trade rose by rose 5.1 per cent in the March 2017 quarter to its highest point since 1973, highlighted a significant step up in commodity exports.
The terms of trade - a measure of the purchasing power of New Zealand's exports - have been trending higher since 2000.
"We have seen a structural lift in these [commodity] prices," said ASB rural economist Nathan Penny.
However belatedly, commodities - such as kiwifruit - have followed suit with dairy's rise, to the point where China looks likely to overtake Japan this season as fruit marketer Zespri's biggest market.
Outside the top three - horticulture, viticulture and forestry have all performed strongly. Still further down the line, the New Zealand avocado industry had its highest value ever, with avocados sales reaching $198 million in the 2016/17 season, an increase of $64m on the previous season. Volume too was a record 7.7 million trays in the 2016-17 season - an 84 per cent increase on last season.
