Situation and Outlook for New Zealand Agriculture and Forestry (August 2008)
Situation and outlook for the primary sectors
9 Kiwifruit
Orchard-gate prices for kiwifruit have been low since 2004, mainly due to exchange rate factors.
Prices in international currencies for New Zealand’s green-fleshed kiwifruit fell in the year ended 31 March 2008. This was due to an increase in New Zealand volumes supplied to the market compared with the previous year and smaller fruit size.
Large volumes of Italian and French kiwifruit remained in the European market at the beginning of the New Zealand selling season. Similarly, in Asia, volumes of domestic and European kiwifruit were present in the market well after the usual close-out period. Chilean fruit was redirected from Asia to Europe due to exchange rate factors, and competed strongly with New Zealand kiwifruit in the smaller size ranges.
International prices for New Zealand’s gold-fleshed kiwifruit increased in the year ended 31 March 2008, despite higher volumes shipped.
In the June and September quarters of 2007, when the kiwifruit crop is exported, exchange rates for the Euro and the Yen (key currencies for kiwifruit) were at their strongest. This compounded the downward price pressure, resulting in an 8.5 percent fall in free on board (FOB) prices overall for the year ended 31 March 2008. (FOB prices are the value of the goods at the port of export and loaded onto a vessel for transportation out of the country of origin.)
Expectations for 2008 and beyond
International prices for New Zealand kiwifruit are expected to improve slightly in the 2008 selling season. This is due to a lower overhang of European-grown kiwifruit remaining in the market at the start of the New Zealand selling season. The Italian crop harvested late in 2007 was down by an estimated 15 percent on the previous year. This resulted in more buoyant market conditions in Europe in the March quarter of 2008. In the first 18 weeks of 2008, prices for Italian-sourced fruit were up more than 30 percent in one German market.
The Japanese and Korean domestic kiwifruit crops were larger in 2007 than in 2006, so the fruit remaining in these markets at the start of the New Zealand selling season was higher than in 2007. Combined with an expected moderation in the exchange rate, FOB prices are expected to improve in the year ending 31 March 2009.
In the medium term, international prices for New Zealand kiwifruit are forecast to decline due to increased supply. Globally, green kiwifruit production is expected to increase significantly in the next two to five years as new plantings begin to produce. Increases in growing areas of 5000 to 6000 hectares in both Italy and Chile (the two main exporters other than New Zealand) will come into production.
Exports
Export volumes increased by more than 12 percent in the year ended 31 March 2008. The key markets for New Zealand kiwifruit continue to be the EU and Japan.
Volumes are expected to increase slightly in 2008 and this trend is forecast to continue in the medium term in response to small increases in the bearing area. The export volume of gold kiwifruit is expected to level off and then increase again towards the end of the forecast period as new plantings licensed in 2006 begin to produce fruit.
Table 9.1: Kiwifruit export prices, volumes and value, 2005–2012
| Year to 31 March | Actual | Forecast | ||||||
|---|---|---|---|---|---|---|---|---|
| 2005 | 2006 | 2007 | 2008 | 2009 | 2010 | 2011 | 2012 | |
| Export volume (mil trays) | 83 | 87 | 86 | 97 | 101 | 98 | 99 | 99 |
| FOB1 price ($/tray) | 9.8 | 7.6 | 8.8 | 8.1 | 8.8 | 9.3 | 10.1 | 10.7 |
| Export value ($ mil) | 807 | 657 | 759 | 779 | 881 | 907 | 994 | 1 067 |
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 Statistics New Zealand.
Production
Yields per hectare have been high since 2004 due to a range of management factors, including changes in vine training and management, as well as relatively favourable seasonal conditions. Early estimates of production in 2008 suggest that the volume of fruit submitted for packing will be up almost 5 percent on 2007. Fruit size has increased and is likely to be close to the optimal range for the markets supplied. The quality of the fruit is reported to be good also.
In the longer term, production is forecast to increase. The producing area in 2007 was almost 12 000 hectares, compared with the total area at 30 June 2007 of close to 13 000 hectares. This implies a rise in production of around 8 percent over the next eight years, as the non-bearing area comes into production.
Between 2006 and 2008, 600 hectares of gold kiwifruit licences were sold, the earliest plantings of which will begin bearing toward the end of the forecast period.
Figure 9.1: Kiwifruit export destinations, by value, year ended 31 March 2008
Source Statistics New Zealand.
Contact for Enquiries
Monitoring and Evaluation
PO Box 2526
Wellington
New Zealand
