6.9      Buttercup squash

6.9.1 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 2021/22 there were 26 growers, who produced a total of 65,789 tonnes on a planted area of 5,643 hectares. Six packhouses and nine exporters are also involved in the buttercup squash industry. Production was impacted by difficult climatic conditions during the growing season. Exporters faced major difficulties arranging shipping to all the markets resulting in the loss of product.

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.

6.9.2 Exports

Total buttercup squash exports have remained stable during this period, increasing slightly by 3% to $52.9 million in 2022. Japan remains the most valuable market for buttercup squash representing 65% by value, with exports increasing 6% to $34.6 million. South Korea is the second largest market representing 22%, undergoing a 43% increase to $15.9 million in 2022. Japan and South Korea account for 95% of export volumes. Exports to China decreased by 65% from 2020 to 2022 to be worth $2.02 million. The average value for buttercup squash across all markets increased 28% from $590/tonne in 2020 to $755/tonne in 2022.

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.

Export figures for 2021 used in this report were obtained from the buttercup squash industry. Statistics New Zealand has acknowledged that its buttercup squash data for 2021 contains errors and does not accurately reflect the volume or value of exports. Inaccuracies arising from imperfect data management contributed to an over-estimation of $17.6 million, and 13.5 tonnes more than was actually shipped.

The buttercup squash industry records weekly monitoring data of tonnage on vessels. This data was used in this report as the 2021 volumes which has been captured for Japan, South Korea, China, Hong Kong, and ‘Other’ countries. Value and volume for the ‘other’ markets could not be individually determined from industry data and remain aggregated for 2021.

Statistics New Zealand data has been retained and used as export figures for 2020 and 2022, and have not been adjusted.

Table 6.9.1: Buttercup squash (0709.93.00.10) export markets 2020-2022 (year ending June, tonnes, $NZ FOB)

1 Industry export figures for buttercup squash have been used for 2021due to errors acknowledged in the data sourced from StatsNZ. For full details refer to Section 6.9.2 on buttercup squash exports. StatsNZ data has been retained for 2020 and 2022.

6.9.3 Barriers to export

Cost of tariffs

Tariffs on buttercup squash have dropped significantly from $2.1 million on $58.6 million of value in 2018 to $0.022 million on $52.9 million in 2022. 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.

Although a small volume of buttercup squash enters the EU it is currently subject to a 12.8% tariff which will be eliminated when the New Zealand-EU FTA enters into force, expected to be in 2024.

The estimated cost of tariffs in 2022 equates to an average of $854 for each of the 26 buttercup squash growers. This represents a significant reduction from an average $84,095 per grower in 2018, and $4,485 in 2020, due to tariffs phasing out in New Zealand’s main buttercup squash markets.

Table 6.9.2: Cost of buttercup squash tariffs (based on 2022 FOB value)

SPS market access barriers

Japan. There was an unacceptably high number of Interceptions of the burnt pine longhorn beetle (BPLB) on squash consignments exported to Japan in the 2019/20 season. As a result, the NZBSC supported by the packhouses, agreed and implemented a code of best practice to manage the risks associated with the prevalence of BPLB during the packing period. As a result, the Japanese Government did not report any interceptions in the 2020/21 or 2021/22 seasons. This is an issue which the industry keeps under constant review.

Thailand. In 2018 the NZBSC asked MPI to request access to Thailand. Buttercup squash was prioritised by MPI, but as there are several other New Zealand access requests being processed by Thailand, or in the queue, this still has not been progressed.

Viet Nam. The buttercup squash industry considers Viet Nam a potentially important new market. Buttercup squash was prioritised for access to Viet Nam in 2017/18, and the market access data package provided to Viet Nam in 2020. The pest risk analysis will be undertaken by Viet Nam when access for the commodity currently under assessment is completed. Viet Nam has still not responded to the New Zealand data package.