Situation and outlook for New Zealand agriculture and forestry (August 2007)

9 Apples and pears

Exports
Production

Early signals this year are that pipfruit prices in our major markets of the European Union (EU) and the United States (US) will be similar to or better than prices last year. Asian markets have also experienced solid prices and demand for the Pacific series of apple. However, once the bulk of Southern Hemisphere production enters the market, there may be some downward pressure on price, particularly in Europe, as greater volumes of Royal Gala and Braeburn enter the market.

The commodity varieties of Braeburn and Royal Gala still account for more than 75 percent of New Zealand exported apple volumes. In the year ended 31 March 2007 these varieties returned an export price of about $20 per carton to growers. Should current currency rates hold for the main selling period this year, erosion in returns of up to $3 per carton is expected.

Figure 9.1: Pipfruit export volumes, by variety, year ended 31 March 2007

Source Statistics New Zealand.

Consumption

The per capita consumption of apples is static or declining in many countries. Despite this, a substantial increase in world apple production, primarily in China and South America, is expected over the next 10 years.

Table 9.1: Apple export prices and volumes

	Actual				Forecast
Year to 31 March	2004	2005	2006	2007	2008	2009	2010	2011
Export volume (mil cartons)	19.1	18.2	17.5	13.9	16.3	15.0	14.3	14.7
FOB¹ price ($/carton)	23.3	24.1	22.4	22.8	21.4	22.4	24.7	26.1

Note
1. Free on board – the value of the goods delivered to the port of export and loaded onto a vessel for transportation out of the country of origin.

Source Pipfruit New Zealand (2007) Pipfruit industry statistical annual 2006. Pipfruit New Zealand: Hastings, and MAF.

Exports

New Zealand is expected to export about 16.3 million cartons (equivalent to 301 316 tonnes) of apples and pears in the year ending 31 March 2008, an increase of 17 percent on the previous year (see Table 9.1). Estimates are that the Southern Hemisphere apple crop is 8 percent larger this year compared with last year, with Brazil and Chile in particular having greater volumes to ship.

A dip in volumes exported from New Zealand is expected in the years ending 31 March 2009 and 2010. There should be evidence of some resurgence in export volumes by March 2011, as increasing levels of Jazz and other preferred varieties come on-stream.

Towards the end of the forecast period, overall growth in export receipts should return as production from more profitable varieties like Jazz and Tentation overshadow any corresponding tree removals.

Returns

A key to achieving improved returns, especially for Braeburn and Royal Gala, is the establishment of a nil discernible residue programme, followed by initiatives to enhance, and gain recognition for, the industry’s sustainability.

Production

Apple production in the year ending 31 March 2008 is forecast to be up on the previous year. A fall in production over the next two years is forecast, as the industry continues to respond to those varieties providing a marginal or an unprofitable return. A phase of tree removals is expected, as the industry transitions to new and more marketable varieties.

Apples and all that Jazz

To maintain premium prices, new varieties must have actively managed licensing rights.

Jazz has hit the world scene. It is an exciting new variety created by HortResearch’s crossing Braeburn with Royal Gala apples. In the 2006 season Jazz provided growers with a 75 percent price premium over its parents.

Royal Gala and Braeburn apples have no international protections, so overseas growers have been able to grow and market them freely. In contrast, the development of Jazz is under very strict commercial controls. The variety is protected by plant variety rights, requiring all plantings to be under licence in New Zealand and internationally.

A year-long supply of apples is seen as critical to satisfying international customer needs. This is being achieved by sourcing apples successively from New Zealand Southern Hemisphere and Northern Hemisphere licensed orchards.

In 2003, pipfruit exporter ENZA exported 30 000 cartons of Jazz. This season the forecast is for 480 000 cartons. By 2012, New Zealand volumes should reach 3 million cartons, and worldwide production will add another 3 million cartons.

Contact for Enquiries

Manager
Monitoring and Evaluation
MAF Policy
PO Box 2526
Wellington
NEW ZEALAND
Phone: +64 4 894 0623
Fax: +64 4 894 0741
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