In a speech to an annual meeting of the Meat New Zealand on Wednesday, Associate Agriculture Minister Damien O'Connor said, "There is a great deal of uncertainty about how long the war will last and whether it will spill over to other regions."

"The uncertainty will probably have a negative impact, affecting levels of confidence, economic growth and exchange rates," O'Connor said.

"There is also likely to be increased shipping and insurance costs," he said.

O'Connor said the Middle East is an important market for New Zealand producers, although it is a small percentage of trade overall.

He said the meat industry was also undergoing change at home. Sheep numbers had fallen over the past 20 years, lamb weights had increased significantly and exports were less seasonal than in thepast as year-round supply was managed.

"Sheep meat producers are leading the game in the red meat sector with their productivity gains," he said.

"While beef producers are also more productive, with more meat being produced from fewer animals, they have a way to go to meet the gains of sheep meat producers," the associate minister said.

(Xinhua News Agency March 26, 2003)