New Zealand Update

The latest dairy auction saw prices decline by 1.3%. Whole milk which is a key price indicator for the Fonterra payout was down 1.1%.

Fonterra’s payout forecast for season 18/19 is $7/KgMS. The forecast for the 17/18 season now ended is $6.75/KgMS.

New Zealand’s terms of trade fell 1.9% in the last quarter the first fall since September 2016.

The NZ commodity price index rose in May up 1.5% and 5.4% on an annual basis in NZD terms

New Zealand Dollar/Interest Rates

New Zealand Dollar

Vs

USD         0.70335

EUR         0.59701

GBP         1.90590

AUD        1.08012

New Zealand Interest Rates

NZD cash rate is 1.75%.

The NZ 10yr bond rate is 3.00%.

 Deal Themes

  • Gold organic kiwifruit development
  • Existing gold kiwifruit conversion to organic
  • North Island regional focused impact investment pastoral dairy
  • High value organic apples.

Noticeable Trends

The following are trends we are seeing in the market:

  • Conventional farmland investment strategy for overseas investors are increasingly difficult to get through OIO.
  • This is compounded by an increase in restrictions on input reliant, water quality damaging farming practice. A trend now also driven by government.
  • Growth of impact investment interest as a means to improve specific environmental performance in New Zealand whilst generating return. Impact Investment is being seen as a compelling and efficient use of capital for mission driven investors in particular.