National Reserve Bank of Tonga

Exports rise as fruit products recover

Exports rise as fruit products recover

Total agricultural exports continued to rise by 51.5% over August. This increase was driven by rises in fruit and root vegetable products. In particular, Cassava, Coconut and Watermelon exports supported the overall rise. According to growers, rainfall over the past three months increased which contributed largely to the improvement in agricultural yields. However, agricultural exports receipts decreased over the month which could indicate possible delay in receiving proceeds.

Over the year, total agricultural exports fell by 26.4% due to declines in all major exports except for Sandalwood and Vanilla which remained stagnant. Adverse weather conditions throughout the year had largely affected output. The annual decrease coincides with a 33.8% drop in agricultural proceeds. These actual figures are lower than the NRBT’s projections indicating that the  agricultural sector is not meeting initial expectations. Additionally, the annual decrease in agricultural supply coincides with the hike in Domestic Food prices which resulted in higher Domestic inflation.

The NRBT continues to expect the agricultural sector to rebound in the 2015/16 financial year. This projection is supported by the latest actual data available and liaisons with growers who have indicated that they are optimistic for the new financial year due to the upcoming harvest period for vanilla, coffee, and squash. However, the latest media release by the Meteorology Division advises of stronger El Niño conditions (drier than normal) for the upcoming three to six months. This poses a significant risk for the outlook of the agricultural sector.