H. —44.

A beginning has been made with the development of an export trade in New Zealand apples to Eastern countries, and the prospects of developing this trade are definitely promising. In 1934 a total of 100 cases were sent to that part of the world. In the following season the total shipments increased to 956 cases. During the 1935-36 period the quantity of apples consigned to the East aggregated 7,641 cases, the numbers of cases to the various ports being as follows : Hong Kong, 1,891 ; Shanghai, 1,800; Bombay, 500; Singapore, 650; Manila, 950; Calcutta, 200: Batavia, 200; Colombo, 200; Madras, 100. This quantity would have been increased if shipping space could have been procured. With the exception of 750 cases shipped on the " Narbada " the rest of the consignment had to be transhipped either at Sydney or Honolulu. Although the Eastern demand for apples and pears is strictly limited, and this demand fairly well catered for, it should be possible for New Zealand to obtain a share in this trade, expecially v ith the development of direct shipping services. In the past the Dominion has been severely handicapped in its endeavours to develop a market in Eastern countries for its products by reason of the fact that direct shipping services were unavailable, and all consignments had to be sent via ports in Australia or America, with a consequent increase in transportation charges due to the necessity for goods to be transhipped. However, so far as China and Japan are concerned, this drawback has been removed by the inauguration of the direct shipping services by the Japanese steamship lines —the Osaka Shosen Kaisha and the Yamashita Kisen Kaisha lines. In regard to Japan, however, apples and pears cannot be imported, due to restrictive legislation. Numerous inquiries for a variety of New Zealand products continue to be received from all parts of the East, both direct from Eastern importers and through the Department's honorary agents in Colombo, Hong Kong, Shanghai, and Tientsin, and in all such cases the inquirers have been placed in direct touch with the persons, firms, or organizations in New Zealand likely to be interested. The following table shows the value of our export and import trade with various Eastern countries for each of the past three calendar years : —

The principal feature disclosed by the foregoing table with regard to our direct exports to the various countries listed is the considerable decline in the value of our exports to Japan from the value exported in 1934. Increases occurred in our exports to British Malaya (£14,044:) ; Philippine Islands (£1,452) ; Ceylon (£1,135) ; and Burma (£410). Decreases in the value of our exports occurred to the following countries : Japan (£425,519) ; Hong Kong (£4,989) ; India (£4,205) ; China (£11,381) ; Dutch East Indies (£313). The net decline in the value of our exports to the above countries was £427,366. With regard to imports in 1935, the table reveals an increase over the 1934 figures in the value of goods imported into New Zealand from the countries mentioned. Increases occurred in the cases of goods from Japan (£263,582) ; Dutch East Indies (£55,405) ; Ceylon (£47,905) ; British Malaya (£16,631) ; Hong Kong (£675). A decrease was recorded in each of the following countries : India (£95,925) f Philippine Islands (£2,431) : Burma (£1,943) ; China (£1,210). The net increase in the values of imports into New Zealand from the above countries was £282,689.

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I — 1933. 1934. I 1935. Export to— £(N.Z.) £(N.Z.) £(N.Z.) Dutch East Indies 5,496 2,548 2,235 British Malaya 22,929 49,727 63,771 Burma .. .. .. .. 743 208 618 Ceylon .. .. .. .. 2,670 393 1,528 Hong Kong .. .. .. .. 15,143 16,238 11,249 India .. .. .. .. 34,326 65,161 60,956 China .. .. .. .. 54,564- 19,099 7,718 Japan .. .. .. .. 354,462 856,014 432,495 Philippine Islands 413 2,493 3,945 Totals .. .. .. .. 490,746 1,011,881 584,515 Imports from — Dutch East Indies .. .. .. 998,224 1,381,974 1,437,379 British Malaya .. .. .. 63,181 64,826 81,457 Burma .. .. .. .. 17,239 11,622 9,679 Ceylon .. .. .. .. 551,388 585,689 633,594 Hong Kong .. .. .. .. 6,299 9,681 10,356 India .. .. .. .. 576,915 667,552 571,627 Japan .. .. .. .. 675,571 836,595 1,100,177 China .. 72,785 98,454 97,244 Philippine Islands .. .. . . 7, 33 13,268 10,837 Totals .. .. .. .. 2,968,635 3,669,661 3,952,350