Westpac NZ Becomes First Bank to Accept Zespri Shares as Lending Security
Westpac NZ has become the first New Zealand bank to receive approval from the Reserve Bank of New Zealand (RBNZ) to secure and leverage kiwifruit growers' Zespri shares.
It's an unusual situation because the Zespri averages of fruit damaged by the frost don't paint an accurate picture of what individual growers are facing.
For example, while the RubyRed crops appears the worst affected, it's likely that the same grower may also have crops of Green or SunGold which could mitigate some of the financial hardship.
It would be unusual, we are told, that a grower would have just one variety.
On the other hand, some growers may have lost their entire crop while others are largely untouched.
But what kiwifruit growers are facing is a double financial whammy.
"Two years in a row - last season it was poor quality fruit and this season it's the frost," says Colin Bond.
What this means is that from now until June next year, all kiwifruit growers will have an income of sorts based on the sale of the 2021/22 crop - remembering however that the quality of this crop was soft and poor, meaning a reduced return. The impact of the frost and other factors will not surface until 2024 when growers will be paid or, in some cases, not paid for the 2022/23 harvest.
Bond says there is a risk that some orchardists will have no income 12 months from now and could face significant financial hardship.
In the meantime it's a waiting game to see if predictions are accurate or whether there is still some hope for the coming twelve months.
