Zespri set to reap benefits of deal

Zespri had been marketing in Malaysia for 10 years. Photo / Alan Gibson

New Zealand's new Free Trade Agreement with Malaysia should be a flavour-booster for kiwifruit marketer Zespri's 10-year efforts to develop Malaysians' taste for the fruit.

Zespri, the world's biggest kiwifruit marketer, said the abolition of a 15 per cent tariff on kiwifruit from next year under the newly signed FTA would increase its investment confidence in a market that has no kiwifruit crops of its own but which has developed an increasing taste for the iconic New Zealand fruit in the past three years.

Director corporate and grower services Carol Ward said Zespri would export 820,000 trays of predominantly green fruit to Malaysia this financial year, with projected sales of around one million trays next year.

Kiwifruit was New Zealand's seventh biggest export to Malaysia and one of Zespri's most important Southeast Asian markets, worth $8 million.

Next year's sales could rise to $9.5 million, she said. All kiwifruit exported to Malaysia was sourced from New Zealand.

Zespri had been marketing in Malaysia for 10 years. The company said sales had grown more than 80 per cent in the past two years.

Ward said this was because of investment in supermarket tasting programmes and education programmes on the benefits of eating kiwifruit. The fruit was becoming popular among older consumers and mothers concerned about their children's diet.

The deal builds on the agreement New Zealand signed with the 10 members of the Association of South East Asian Nations, of which Malaysia is a part.

The result is that 95 per cent of goods will be duty-free and within seven years all goods tariffs will be phased out.

Malaysia has also bound in existing duty-free access for New Zealand dairy (except liquid milk) products, meat, wool, fish and forestry exports which means it can't reapply tariffs for domestic reasons.

Some key aspects of the deal were in the non-tariff areas with business people allowed to get visas more easily and for longer.

Acting Prime Minister Bill English said the latest deal was significant.

"It's clear over the next five to 10 years that is where the action is going to be - they are the fast growing economies - and our traditional markets in Europe and the UK are not in great shape."

It was hoped that a reduction in tariffs would see strong export growth.

Trade Minister Tim Groser said New Zealand's services trade with Malaysia was expanding, particularly in the education sector, with the number of Malaysian international students in New Zealand increasing by more than 70 per cent since 2003.

He said Malaysia was New Zealand's eighth-largest export destination, accounting for almost $1 billion of exports last year.

- ADDITIONAL REPORTING: NZPA