Zespri flags upside for grower payments

Kiwifruit is New Zealand's biggest horticultural export. Photograph by John Borren.

Kiwifruit marketer Zespri is forecasting a potential lift of up to 6 per cent in payments to growers this season.

The firm, which markets kiwifruit on behalf of 2,500 New Zealand growers and another 1,200 in Italy, Japan, Korea and France, is expecting total fruit and service payments of $1.775 billion to $1.875b in the year ending March 2020.

Zespri is yet to publish its March 2019 year results but in February forecast a total payment of almost $1.77b for that year. That figure, which excludes loyalty payments, compares with $1.43b in the year ended March 2018.

Kiwifruit is New Zealand's biggest horticultural export. Export earnings reached almost $1.7b in the June 2017 year, a third of the sector's total. The next largest contributors were wine at $1.54b and apples at $691 million, according to government data.

Zespri chair Bruce Cameron reminded growers and shareholders the forecasts are the first for the 2019-2020 season and are still subject to significant uncertainty.

In February the company forecast a net profit range of $177-180 million for the March 2019 year, up from the initial $170-175m it estimated this time last year, and the $101.8m net profit Zespri reported for the 2018 year.

For the March 2020 year it is forecasting net profit of $180-195m, including increased gross revenue from the 2019 licensing of its Sungold, or Gold3, variety.

Compared with this time last year, Zespri is picking significantly better prices for growers of Green14 fruit, and slightly better prices for gold fruit and organic green fruit.

Traditional green fruit is expected to deliver growers $5.20-$6.20 a tray in the current year, against the 2018-2019 payout of $5.36 that Zespri signalled in February.

Organic green fruit may achieve $8-$9 a tray, against the $8.88 signalled for 2019; gold fruit may bring in $9.70-$10.70 a tray, against the $10.80 signalled for 2019; and Green14 fruit may bring in $7-$8.50 a tray, against the $7.21 signalled in February for the year just ended.

In March Zespri launched a sales trial of a new red kiwifruit variety, the latest to come through the company's natural breeding programme and developed in partnership with Plant & Food Research.