Commodities and currency pitch in on export growth

Reading Time: 3 minutes The export-led recovery is in the process of being given another leg up.

The NZD/AUD is now knocking on the door of 0.80.

For context, the NZD/AUD mostly sat above 0.90 from late 2013 until mid-2025. At times a parity party appeared around the corner. The move represents a large realignment but like most currency moves, you typically spend a period too high and the next period too low. Welcome to the low zone.

The elevated NZD/AUD made for cheaper holidays in Australia but made NZ less competitive export-wise, and the value of exports into Australia dropped a couple of billion between 2011 and 2025.

Australia dropped to third as our largest export destination for goods and the United States took second position.

As a market, Australia remained key, but went into a holding pattern with no growth. NZ effectively lost market share because the Australian economy expanded but our exports shrank. Reduced oil exports played a big part.

Australia as a goods export destination is now back in second place ($11.4 billion), behind China ($20.4bn). A lower currency has helped immediately but so have a lot of other factors.

Exports into Australia have risen from $9.4bn in the 12 months to August 2025 to $11.4bn in the 12 months to August 2026, a rise of 21.5%. In the 12 months to August 2024, the figure was $8.7bn making the rise over two years 30.9%.

Within those aggregated numbers we have seen increases from parts of the primary sector in the past year. Dairy up close to $100 million. Seafood around $40m. Fruit and nuts another $40m. Cocoa and cocoa preparations ($40m), preparations of cereals, flour, starch or milk and pastrycooks’ products ($50m), Miscellaneous edible preparations ($50m) and wood ($40m).

Losses include beverages (down $80m), mineral fuels (down $40m) and organic chemicals (down $30m).

Where is it really coming from?

The big bopper at the table though has been Harmonised System Code 71, which are metals, jewellery and coins, effectively functions of minerals.

New Zealand’s exports for this group have risen from $1.6bn to $2.9bn in the past year, making it bigger than seafood or wine. Gold exports dominate the group and have gone from $1.2bn to $2.5bn.

Most of this group (around three-quarters) has been making its way into Australia. A report released in January 2025 by the government (A Minerals Strategy for New Zealand to 2040) noted we could double minerals-related exports by 2025. We’ve already almost at that target.

An elevated metal price for gold has helped hugely. The price of gold is around US$4100 per ounce, after spending time above US$5000 per ounce.

Over most of 2022 and 2023 gold hovered around US$2000 per ounce.

Business count numbers across the regions show the strongest growth in Otago, Canterbury, and now the West Coast.

The export growth being seen in non-traditional areas – while likely carrying a strong price component – also illustrates the growing importance New Zealand’s natural resource base is playing in the growth story and could continue to play.

Natural resources as a wealth creator

NZ’s geology means we have a varied mineral endowment beyond the obvious ones such as gold. There is potential for the development of critical minerals, including those needed for new technologies and to assist with the clean energy transition.

Many minerals have also become strategically important in recent years given their use across aviation, military, electric vehicles, and medical products.

Some point to the negative effects of mining but there is also a reality check that must be given. Wellbeing requires an economic base and failing to take advantage of natural resources is akin to benching your best All Blacks.

Back to Australia, one of the reasons the NZD/AUD has fallen is the interest rate differential. The Reserve Bank of Australia (RBA) has its cash rate at 4.6% whereas ours it at 2.75%. Both are expected to move higher. Australia’s 10-year bond yield is around 30 basis points higher than NZ’s too.

Other factors include relative economic performance and productivity growth, though the former is now moving in NZ’s favour.

Australia has an inflation problem that the RBA will keep waving the big interest stick at. That will not be good for growth, employment or its housing market, making it a harder market to sell into as the country goes through a downturn. Fewer Kiwis will immigrate and more will come home, helping local housing.

Queenstown will still congest under a wave of Australian holidayers despite its economy facing challenges.

The bottom line is that the NZD/USD and commodity prices did much of the heavy lifting boosting the export recovery in the early rounds. The India free trade agreement, and others (Gulf Cooperation Council), along with a major adjustment in the NZD/AUD, are some of the next drivers to watch.

Farmers Weekly publishes a range of opinions from across the food and fibre sector. The views expressed are those of the author and do not necessarily reflect those of Farmers Weekly. Opinion pieces are intended to encourage informed discussion and debate.

The post Commodities and currency pitch in on export growth appeared first on Farmers Weekly .