Zespri flags gloomier forecasts are coming. Photo / Paul Taylor
Zespri flags gloomier forecasts are coming. Photo / Paul Taylor
Growers in New Zealand Inc's sweetheart kiwifruit industry are in for some unusually downbeat news next week as rising costs and fruit quality issues combine to drive down forecast returns.
Zespri chief executive Dan Mathieson has sounded the warning in an update to the global marketer's 2800 New Zealand growers,saying the next orchard gate returns forecast on August 23 will reflect that fruit quality this season remains a significant issue as previously flagged.
Zespri, which has a statutory near-monopoly on kiwifruit exporting with record net global sales nudging $3.6 billion last year, is a little over halfway through its sales season. Ongoing rain and cold weather in New Zealand and unseasonably high summer temperatures in the Northern Hemisphere had led to a crowded fruit market, Mathieson said.
"Fruit quality remains an ongoing and significant issue this season....We are not alone in facing this challenge, with quality issues evident across other global fruit categories this season, and our competitors and colleagues have also battled labour shortages, supply chain congestion and inflationary pressures, all of which impact grower returns.
"Since publishing our indicative OCR [orchard gate return] range in June, the costs associated with this season's fruit quality will be updated and fruit loss is expected to be significantly above the levels considered by our earlier forecast, resulting in less fruit available for sale."
Prices were holding in most markets but "at present the indications are that conventional fruit returns are likely to be at the bottom and possibly even below the ranges published in June".
Mathieson said prices were holding in most markets but cost increases in freight along with labour and the quality issues meant "this season's returns will be under pressure".
Zespri has delivered 40 per cent of this season's green crop, which yielded 8.5 million fewer trays than last season. Photo / Jamie Troughton
Zespri said as at August 9 it had sold more than 60 million trays of its top seller SunGold kiwifruit and delivered more than 61 per cent of the season's gold fruit crop, compared to 60 per cent at the same time last year.
It had delivered 40 per cent of this season's green crop, which yielded 8.5 million fewer trays than last season.
In organic categories, Zespri had sold 900,000 trays and delivered 30 per cent of the organic green crop, compared to 33 per cent at the same time last season. For organic SunGold, 1.8m trays had been sold with a delivery of 57 per cent of the crop, compared to 50 per cent at the same time last season.
Mathieson said despite the issues, demand for Zespri's fruit remained steady. Marketing campaigns were being prepared to drive a post-summer fruit boost to re-engage consumers.
Zespri, which also has international growers, remained confident in demand growth long-term.
The Mount Maunganui-headquartered company will hold its annual meeting on August 24 - 48 per cent of its New Zealand grower-suppliers are shareholders.
