KEY POINTS:
Returns to kiwifruit growers are expected to bounce back this season with better pricing, sizes and exchange rates, says exporter Zespri.
The forecast for green kiwifruit this season was between $6.75 and $7.15 a tray, up from $6.30 the previous season, while gold kiwifruit was expected to be
between $9.30 and $9.70, up from $8.81 a tray.
Total fruit and service payments in the year ending March 31 were $660.5 million, up from $654.3 million the previous year, but the average payment per tray fell 14 per cent to $6.93.
Chief executive Tony Nowell said the industry had made an exceptional start to the season with a record crop of good-quality early fruit arriving in an encouraging market environment.
"Were extremely encouraged by the positive start to this season with fruit being harvested, packed and loaded with minimal constraints.
"The increase in forecast payments for the 2008/09 season is attributable to improved in-market pricing, size profile and foreign exchange situation, but is offset to some degree by increased shipping costs."
The size profile reflected the amount of fruit in a tray, with larger fruit commanding a higher price. "Improvements to the size profile of this year's crop reflect considerable effort by growers to match the optimum market profile signalled by Zespri," Nowell said.
Zespri indicated to growers in December that size 33 was the best profile on average.
"That gave them the opportunity to thin their crop ... and I have to say the growers responded magnificently."
The forecast improved returns would be welcomed by growers, particularly those growing green fruit who had been hardest hit by the impacts of foreign exchange movements, he said.
A hedging policy had helped but exchange rate movements cut $80 million off grower returns.
"It's improved quite nicely for us on yen and euro, those are the two big trading currencies for us for kiwifruit," Nowell said.
New Zealand Kiwifruit Growers president Graham Wiggins congratulated growers on increased fruit size profile and improved picking quality.
"I am encouraged by the increase in fruit and service payments but recognise that growers' on-orchard and post-harvest costs have risen significantly," Wiggins said. "The whole industry must continue the industry's war on costs to drive for extra value and cost efficiencies on-orchard and throughout the supply chain."
Nowell said costs were rising across the industry, including fuel, freight and wages.
"Zespri has implemented a number of efficiencies for the 2008 season and we remain focused on initiatives to add further value and reduce costs."
Zespri's net profit for the year ending March 31 was $19.7 million, down from $22.1 million the previous year, mainly because of a structural change in the company's margin.
Zespri dropped its margin on net sales and on the net return to suppliers from 7 to 6 per cent as of April 1, 2007.
Net global sales were $1.16 billion, compared with $1.13 billion the previous season, with New Zealand-sourced kiwifruit volumes sold up 15 per cent to 92.4 million trays, partly due to the high fruit loss the previous season.
The sale of licenses for gold fruit boosted profit before tax by $4.7 million.
The company planned to declare a final dividend of 33c, bringing the total dividend for the year to 80.67c a share, compared with 82c the previous year.
