Vanuatu exports – COVID-19 and extreme weather worry experts
The dual crisis of COVID-19 and the impact of the category five Cyclone Harold on Vanuatu’s exports has experts worried.
But new statistics show businesses in Vanuatu are more confident they will survive than are businesses in other Pacific countries and there is hope for kava exports.
“This is a really horrible situation to have both disasters. COVID-19 has killed demand and accessibility to international markets while TC Harold has killed supplies, so it’s a very difficult situation for Vanuatu,” says the Trade Development Officer at the Ministry of Tourism, Trade, Commerce and Ni-Vanuatu Business, Andrea Ibba.
“Many kava farmers in the north [are] severely affected by TC Harold. [It] will take three years for them to have enough supplies for the market again,” he said.
Kava contributed 53 per cent of Vanuatu’s exports according to 2019 statistics and copra accounted for 15 per cent.
The most important export destinations for kava are New Caledonia, Fiji, Kiribati and the United States.
Mr Andrea Ibba says due to borders closing no export destinations can be reached and many kava exports are now stuck in New Zealand unable to be sent to their next destination.
However, the lifting of kava restrictions in New Caledonia has given hope to Ni-Vanuatu kava farmers.
Vanuatu’s other major export commodities are coconut oil, cocoa and coffee.
Cocoa and coffee have also been badly affected by the closing of borders due to the COVID-19 pandemic and demand has dropped due the drop in international tourism according to traders.
Economists here in Vanuatu cannot predict how the situation will go for Vanuatu in the recovery phase, but there is already a big drop in economic growth of around 0.4 per cent and 0.6 per cent of GDP according to the Ministry of Finance and Economy.
“Maybe with adjustments, people can adjust their behavior and we can recover our export [trade] again again and also find new demand,” Mr Ibba said.
Other Pacific countries suffer
New research shows other Pacific countries are suffering the same problems as Vanuatu.
A ground-breaking survey by Pacific Trade Invest (PTI) shows extreme weather negatively impacted 65 per cent of Pacific Island exporters over the past year.
Pacific Trade Commissioner, Caleb Jarvis, who was part of the team that commissioned the survey says, “That’s staggering. That’s a huge percentage of businesses. We were really shocked.”
Another PTI survey, called the Pacific Business Monitor, shows 90 per cent of businesses across the Pacific reported a decline in revenue due to COVID-19.
All Pacific countries have been hit hard by COVID-19 and some businesses will not survive.
In Vanuatu, business is feeling more optimistic than in other countries with 80 per cent confident they will survive COVID-19. In Fiji just 59 per cent expected to survive.
Mr Andrea Ibba, told VBTC the Ministry of Tourism, Trade, Commerce and Ni-Vanuatu Business is working on policies to help the private sector export again in the coming months.