Situation and Outlook for New Zealand Agriculture and Forestry (August 2008)
11 Apples and pears
Apple and pear export volumes and revenue both increased by around 13 percent over the year ended 31 March 2008.
Export revenues are expected to decline for the year ending 31 March 2009 as several major frosts caused a drop in exportable cartons. This reduction in export volume is likely contributing to relatively stable in-market prices.
New Zealand apple and pear export prices are strongly influenced by the volume, quality and market destinations of our southern hemisphere competitors Argentina, Brazil, Chile and South Africa. Consolidated apple exports from the southern hemisphere in 2008 are forecast to be 1.7 million tonnes (this is similar to 2007), with New Zealand representing about 16 percent of the southern hemisphere export volume.
Export of fresh apples from the major apple-producing countries is expected to increase by one-third through to 2015. However, imports of fresh apples into the established markets are set to grow more slowly. This suggests that competition for fresh apple export markets will intensify in the future.
Prices for New Zealand apples in international markets are forecast to decline as this new competition arrives. In New Zealand dollar terms, these price falls are expected to be mitigated by increasing proportions of new varieties in the New Zealand export mix, and the assumed depreciation of the exchange rate.
Figure 11.1: Pipfruit export volume, by variety, year ended 31 March 2008
Sources Statistics New Zealand and MAF.
Exports
New Zealand is expected to export about 14 million cartons of apples and pears in the year ending 31 March 2009 – a decrease of almost 9 percent on the previous year. The decline reflects the impact of frost and the decision by some growers to juice rather than export their Braeburn apples.
Continental Europe continues to be the major destination for New Zealand fruit, receiving about 40 percent of exports in the last two years. Other key markets, based on sales last season, continue to be the UK and Ireland (23 percent), North America (19 percent) and a growing Asian market (16 percent).
The reduction in the area of apple plantings has caused overall export volumes to fall over the previous decade. Annual volumes have settled into a band between 14 and 17 million export cartons.
Table 11.1: Apple and pear export prices, volumes and value, 2005–2012
| Year to 31 March | Actual | Forecast | ||||||
|---|---|---|---|---|---|---|---|---|
| 2005 | 2006 | 2007 | 2008 | 2009 | 2010 | 2011 | 2012 | |
| Export volume (mil cartons) | 18 | 18 | 14 | 16 | 14 | 16 | 16 | 16 |
| FOB1 price ($/carton)2 | 24.1 | 22.4 | 22.8 | 22.7 | 25.6 | 24.6 | 25.6 | 26.5 |
| Export value ($ mil) | 440 | 393 | 318 | 360 | 370 | 383 | 402 | 425 |
Notes
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.
2. Industry data suggests that prices in 2005 and 2006 were lower than reported in official statistics.
Sources Statistics New Zealand and MAF.
Production
Apple production in the year ending 31 March 2009 is forecast to be well down on the previous year. This is due to the effect of major spring frosts in the Hawkes Bay. Early-flowering pipfruit varieties were badly damaged, with losses exceeding 30 percent of the total Hawkes Bay crop for Braeburn, Jazz and Pacific Beauty. Later-flowering varieties suffered less damage – in the order of 5 to 10 percent. The main impact of the frost on Royal Gala, which makes up a third of the planted area in the Hawkes Bay, will be smaller fruit size with lowered fruit value.
The Nelson region also experienced a drop in volumes due to frosts. Packouts were also lower because of more blemished and oversized fruit.
A levelling out, followed by a gradual lift in production, is expected over the next three years. This is due to the apple and pear industry continuing to remove marginal or unprofitable varieties as it introduces new and more marketable varieties like Jazz, Tentation, Sonya and Envy.
There were 9250 hectares planted in apple trees in New Zealand as at 30 June 2007. This was 21 percent lower than that recorded in the previous agricultural census conducted in 2002. The reduction in area reflects the removal of mainly Braeburn and Royal Gala trees and smaller planting of new varieties.
Apple futures
The New Zealand apple industry must think smarter if it is to maintain major export markets in the UK and Europe, where consumers are demanding fruit that is safe to eat and produced in a sustainable environment.
The Apple Futures Project, which aims for ultra low residue fruit, is an example of rallying to solve this export challenge. (Ultra low residue fruit is achieved through precise and early timing of sprays.) After securing a $2 million grant from New Zealand Trade and Enterprise’s Major Cross-Regional Initiative Fund and financial support from Pipfruit New Zealand, the concept was trialled by growers in the Hawkes Bay and Central Otago in the winter of 2007. In 2008, it’s being extended to Nelson.
While development continues, results have confirmed that it is possible to produce apples with very low residue. The next step is to create a marketing and promotional strategy to take overseas.
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