Zespri thinks returns will lift 4 per cent

By PHILIPPA STEVENSON agricultural editor

Zespri expects an avalanche of small kiwifruit to cut tray price returns to growers but total returns still to be up on last year's record.

In its first forecast for the export selling season, the marketing company predicted it would pay growers $430.7 million, 4 per cent up on the $413 million of 1999-2000.

The chairman of Zespri, Doug Voss, said up to four critical months of marketing were still ahead of the company but he was confident the forecast would be reasonably accurate.

In the past four years, the early season projection, made so growers can plan business decisions, had been within 5 per cent of the final figure, Mr Voss said.

This year, Zespri is marketing a 66 million-tray crop, compared with last year's 54.2 million.

However, many of the green or Hayward kiwifruit were small following poor bud set last spring when orchards in the main Bay of Plenty growing area were repeatedly hit by bad weather.

The company said the average forecast return per tray for Zespri Green was $6.61 against $7.88 last season as "a result of retail prices being dragged down by the avalanche of too many small-sized fruit."

Prices were very high for the small volume of large-sized green fruit but a late exit from the market by Italy and head-to-head competition with Chile had also affected sales.

"Basically, the fresh produce business globally is tough," Mr Voss said.

"We are facing a selling environment that is pretty typical and we are going to have to work hard and smart to reach the forecast return."

Revenues for the year to date were above the average of the past five years, boosted by returns from Zespri Gold and a strong performance in Japan.

But the company was behind its own targets and "we will be looking at a longer selling season and that will require careful management from affected markets," he said.

The amount of the newer, gold fruit has shot up from 300,000 trays last year to five million this season, and has given the company its main challenge. Zespri essentially released a new fruit on to European markets.

In Japan, where shipments had been sent as a trial, sales of gold fruit surpassed all expectations, the company said.

The average price per tray for Zespri Gold is forecast at $9.49 against $14.68 last season.

Returns for organic fruit are expected to be around $7.05 a tray, compared with $9.95 last year.