6.9      Buttercup squash

6.9.1      Buttercup squash industry profile

Buttercup squash is one of New Zealand's major fresh vegetable export crops. In New Zealand, the main growing areas for buttercup squash are Gisborne and Hawke's Bay.

In 2019/20 there were 28 growers, who produced a total of 87,000 tonnes on a planted area of 6,530 hectares. Six packhouses and nine exporters are also involved in the buttercup squash industry.

Buttercup squash is a prescribed product under the New Zealand Horticulture Export Authority. The New Zealand Buttercup Squash Council (NZBSC) represents the interests of buttercup squash growers, packhouses, and exporters. The NZBSC facilitates industry programmes to maximise value for stakeholders and has a role to identify and work with business partners and importers to develop exports. NZBSC identifies and seeks to build long-term relationships with in-market organisations that have a focus on the consumer, product quality and service and a desire to expand the New Zealand buttercup squash component of their business.  

To achieve its goals the NZBSC implements four main programmes in quality management, research and development, market development initiatives, and industry development, coordination, and communication.

The NZBSC is a product group affiliated to Horticulture New Zealand and operates from offices in Wellington.

Exports

Total buttercup squash exports have remained stable from 2016 to 2019 at around $56 to $60 million but decreased in 2020 to $51.4 million in 2020. Japan remains the largest export market for buttercup squash, followed by South Korea. Exports to China increased 71% overall from 2018 to 2020; this market is now worth $5.8 million in 2020.

Japan and South Korea accounted for 92% of export volumes in 2020, a slight decrease from 94% in 2018. New Zealand grown buttercup squash has several competitors, with Mexico, Tonga, New Caledonia, the USA, and Australia all exporting to Japan at various times during the New Zealand export window of late December to May. Mexico is the most significant competitor in the Japanese market. The New Zealand industry is currently exploring market development opportunities to broaden its options. While squash is exported to a number of other markets, these are relatively minor in terms of value and volume and tend to fluctuate year on year.

For the four major markets Japan, South Korea, China and Hong Kong, export figures obtained from the buttercup squash industry have been used in this report. StatsNZ has acknowledged that its buttercup squash data contains errors and does not accurately reflect the volume or value of exports. Inaccuracies arising from imperfect data management are likely to contribute to the difference which amounted to an over-estimation of approximately 30,000 tonnes in 2020. Industry data for 2018 and 2019 also suggests that the volumes recorded by StatsNZ were approximately 10% greater than the volumes shipped. StatsNZ data was used to determine export figures for 2018 and 2019, and have not been adjusted.

The buttercup squash industry records weekly monitoring data of tonnage on vessels. This data was used in this report to determine the export figures for these four markets which account for 98.6% of all buttercup squash exports. StatsNZ data has been retained for the remaining markets.

Table 6.9.1: Buttercup squash (0709.93.00.10) export markets 2018-2020 (year ending June, tonnes and $NZ FOB)

1 For Japan, South Korea, China and Hong Kong, industry export figures have been used in this report due to errors acknowledged in the data sourced from StatsNZ. StatsNZ data has been retained for the remaining markets. For further details refer to Section 6.9.2 on buttercup squash exports.

Barriers to export

Cost of tariffs

Tariffs on buttercup squash dropped significantly from $2.1 million on $58.6 million of value in 2018 to $0.13 million on $51.4 million in 2020. The tariff into South Korea during the months of December to May has reduced to zero under the New Zealand-Korea FTA, while any product supplied outside this seasonal window incurs a 27% tariff. The CPTPP entering into force has removed the tariff into Japan and has neutralised a previous advantage on Mexican squash which enjoyed a reduced tariff in an FTA between Mexico and Japan.

The $0.13 million estimated cost of tariffs in 2020 equates to an average $4,485 for each of the 28 buttercup squash growers, a significant reduction from an average of $84,095 per grower in 2018.

Table 6.9.2: Cost of buttercup squash tariffs (based on 2020 FOB value)

SPS market access barriers

Indonesia. Increased access. Buttercup squash was successfully added to Indonesia’s Country Recognition Agreement (CRA) commodity list in January 2018 (see Section 7.17.3).

Japan. The frequency of fumigation continues to be an issue adding additional cost to exporters. The industry has invested heavily in a pest management programme, enforced via its Export Marketing Strategy (EMS) under the HEA, to maintain market access that is threatened by interceptions of a non-host quarantine pest (burnt pine longhorn beetle). This has been successful to date, but ongoing vigilance and investment in careful management is required. The beetle is attracted to the timber bins used to contain the exported commodity, i.e. not the buttercup squash product. The squash industry is continually reviewing management practices and new research (e.g. alternatives to timber bins) to ensure it has up-to-date knowledge of how to manage this pest.

Thailand. No work under way to gain access. In 2018 the industry asked MPI to request access. Buttercup squash was prioritised by MPI with nectarines or plums, but New Zealand has not yet formally requested Thailand to progress the access for buttercup squash. Access will not be worked on in the medium term.

Vietnam. A potentially important new market. Buttercup squash was prioritised for access to Vietnam in 2017/18, and the market access data package provided to Vietnam in 2020. This market is of particular interest to exporters.