Zespri brightens kiwifruit export price forecasts but pressure is still on

Zespri says the export season has started positively with the first SunGold fruit en route to Japan. Photo / Supplied

Down-in-the-dumps kiwifruit growers have had some better news from global marketer Zespri, which has lifted its 2023-2024 season orchard gate returns guidance for most varieties from a gloomy outlook last month.

But its latest forecast came with a warning.

In an update to growers, Zespri said there was still potential for more costs from the fruit quality issues that have haunted the export sector recently, and that inflation and uncertainty on orchard yields due to extreme weather events are still red flags.

Kiwifruit growers have had a highly challenging past two seasons due to these impacts, exacerbated by a labour shortage.

Kiwifruit is New Zealand’s biggest horticulture export and Zespri the world’s single biggest kiwifruit exporter. It has the statutory right to ship all New Zealand kiwifruit, except to Australia and in special collaborative marketing cases, so a dip in returns is felt in the economy.

The cocktail of issues led Zespri to earlier this month forecast a slump of up to $144 million in net profit after tax for the 2023 financial year, compared to last year.

The 2023-2024 export season has just begun.

The update follows Zespri’s March board meeting. Chair Bruce Cameron said 2023 per tray orchard gate return indications were above 2022 returns.

The improved pricing was due to a reduced crop this season, expected improvement in fruit quality and Zespri’s investment in building market demand, he said.

The new guidance was based on an estimated export class crop of around 145 million trays from New Zealand this season. Zespri also has about 1500 contracted offshore growers. Total Zespri sales volumes in 2021-2022 were 201.5 million trays of New Zealand and non-New Zealand kiwifruit, an 11 per cent increase on the previous financial year.

“The downside in the forecast reflects the potential for ongoing costs associated with quality as well as inflationary pressures - both onshore and in-market,” Cameron said.

“There also remains some uncertainty on the overall crop and orchard yields for the coming season given recent weather challenges....and there is a likelihood for many growers that actual OGR (orchard gate returns) will be well outside the estimated published ranges, particularly for impacted growers and red [fruit] growers with a wide variety of orchards at varying levels.”

Further updates would be provided when the 2023-2024 season’s fruit volumes and quality were better understood.

The latest guidance has the per tray orchard gate return for Zespri green fruit lifting from $5.55 in February to $6.50-$8.50. Per hectare, the guidance is $52,000-$68,000 compared to $55,395 in February.

For the best-seller Zespri SunGold, the latest per tray guidance is $10.50-$12.50 ($9.79) and per hectare $124,000-$148,000 ($134,962).

For growers of the recently commercialised RubyRed fruit, the outlook dimmed a little on the February forecast. Per tray this fruit is expected to return $17-$20 ($21.99) and per hectare $27,000-$31,000 ($41,543). The update said for red fruit growers per hectare returns were likely to be variable due to the impact of vine maturity on yields and profile.

The update said the per hectare range guidances were industry averages, based on current producing hectares and associated average yields data. They could change significantly once crop volumes and producing orchard date was finalised.

Per hectare results for 2023-2024 would vary across growers due to the impact of weather events, the update cautioned.