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.
New Zealand Kiwifruit Growers Incorporated (NZKGI), which represents NZ growers, says a record 225 million trays have been picked – nine million more than last season.
NZKGI chief executive Colin Bond says the trajectory for the sector is positive, but while volumes are up significantly, this does not necessarily equate to a big rise in grower returns.
Demand for kiwifruit is good in key markets such as Europe and North America but the returns per tray to growers is expected to remain about the same as it was last season.
The latest report by Ministry for Primary Industries (MPI) shows that total export returns for kiwifruit will rise by about 13% over the next four years, but signals that the days of dramatic increases in export returns are no longer there.
NZKGI is cautioning about the difference between selling for good prices and profitability for growers.
“So, whilst we are selling for good prices in the market and there is good market demand, costs are always rising, including the increasing cost of finance for growers to buy new orchards as well as rising kiwifruit licences and actual land prices,” he told Rural News.
“Given this, we expect profitability to remain at current levels and not increase,” he says.
One of issues in this current year is the lower yields and smaller fruit size of green kiwifruit.
Bond says the harvesting of 58 million trays of green kiwifruit took longer than expected and the yield was 14% down on last season. He says with smaller fruit, the number of trays available for sale is reduced and some fruit may not meet the required export standard.
Bond says small fruit can be caused by several factors, the most common being when growers push their vines to produce higher yields in previous years and sometimes the vines struggle to do this all the time.
“This is a blip and not a catastrophe and it happens from time to time. For green growers a lot depends on what Zespri will be able to sell that lower crop for and whether there might be an opportunity to sell that fruit at a high price, or sell it quickly and therefore not incur less late season fruit loss,” he says.
Bond says there is still the potential for green growers to have good season.
Weather Woes
The much talked about El Nino weather pattern is also on the minds of kiwifruit growers but Colin Bond says there’s no need to be negative about this.
He says the big issue will be if there is enough cold weather to set up the fruit for bud break and then hope that the summer will be favourable.
“There are two perspectives on El Nino: If it’s dry weather, growers will need to irrigate to keep the plants strong and healthy, but on the flip side, a dry summer often means higher dry matter and really high-quality, tasty fruit,” he says.
