Renewed fears as PSA devastates European orchards

New fear is sweeping the $1.5 billion kiwifruit export industry as the PSA disease creates "scary" devastation in Italian and French orchards.

Zespri chairman John Loughlin yesterday announced a dive in the marketer's 2010-11 net profit from $25.9 million last year to $7.3m, partly due to the $12.9m cost to date of the ongoing fight against the bacterial disease.

He warned that the kiwifruit industry's short- to medium-term future was "uncertain" beyond the current season.

The impact of PSA in New Zealand had yet to be determined, but he forecast a "tough" two to four years ahead as the industry learned to manage PSA.

And an industry presentation on the PSA situation yesterday heard that with the arrival of spring in Italy, the disease could be seen in gold orchards "right across that country".

Worryingly, it had also affected 20 per cent of green fruit orchards, especially Haywards.

Cold, wet weather stresses vines and is thought to accelerate the airborne disease, so the industry here is anxious about the effect winter will have. Nearly 230 cases have been confirmed in New Zealand since November, when PSA was discovered in a Bay of Plenty orchard.

John Burke, the general manager of Kiwifruit Vine Health, a joint industry-government group set up to fight PSA, said the disease had "blown out quite significantly" in France.

The industries in Italy and France were in "dire straits" and the situation looked "pretty scary", he said. "The big difference is our environment but we are planning for the worst ... we don't want to be complacent."

Of the 229 confirmed New Zealand cases, 107 had the virulent strain known as PSA-V. All are still confined to the Te Puke area and 25 per cent of the affected orchards produce gold fruit. About two-thirds of the affected gold fruit orchards were also showing secondary symptoms, which was concerning, Mr Burke said.

When asked how serious the PSA situation was on a scale of one to 10, New Zealand Kiwifruit Growers president Peter Ombler responded "six".

"We are in a race against time and the problem is that, as time goes on, we have less time. We don't exactly know how this will play out but it would be dangerous to underestimate the problem.

"Once we have acknowledged that time is our enemy, R&D [research and development] becomes our friend."

The industry was trying to contain the spread of PSA through spraying, and plant and nursery stock movement controls until a scientific solution was found.

KVH had spent $17.6m to the end of March fighting the disease and the industry expected to spend a "significant" amount more.

The Government and industry have each committed $25m to the fighting fund.

Around 129 hectares of diseased vines have been culled.

Despite posting a steep fall in profit, Zespri, which is supplied by most New Zealand kiwifruit growers, lifted total payments to growers by 4 per cent above 2010 season forecasts to $849m. A particular highlight of the year had been a 9 per cent boost to average orchard gate returns to green fruit growers to $32,234.

The profit fall was a result of money spent on the PSA fight, and boosting loyalty payments to orchardists from 15c to 25c a tray.

Returns for the 2011-12 season were likely to be lower, with early signs the industry was in for another challenging year in the face of further oil price increases and a strong New Zealand dollar, Mr Loughlin said.