Kiwifruit growers profit from Chilean woes
A catastrophic frost that devastated the Chilean kiwifruit crop this year and a bumper New Zealand harvest has led to high returns for growers.
Chile produces 180,000 tonnes of kiwifruit normally, but this year's harvest plummeted to 100,000 tonnes.
In contrast, New Zealand has produced 350,000 tonnes, four-fifths of which is the green variety.
Zespri has revised up its forecast returns from August for October. Green kiwifruit is forecast to return $5.71 a tray, up from a $5.34 forecast in August.
Forecast per hectare returns have broken $50,000 for the first time, with a predicted return of $51,047, well ahead of the $42,659 return last season.
Zespri chief executive Lain Jager said anything more than $5 a tray was considered a satisfactory return, especially with New Zealand's high exchange rate.
"The firming of forecast has occurred because Chilean growers had a frost, so there is a scarcity of green kiwifruit globally. An event like that was a once in 20 to 30-year event," he said.
New Zealand green growers had also had a bumper year, with the higher prices a combination of stronger returns but also quite high yields, he said.
They were achieving 8900 green trays a hectare, well ahead of the usual 8400 trays.
Foreign currency fluctuations during a season did not have a big impact because Zespri hedged the currency up to three years ahead.
Almost half of exports went to Europe, half to Asia, and 2-3 per cent to the United States. Japan was a premium market.
It was too early to say whether next year's harvest would be as strong as this year's, Jager said. Flowering was looking good but his instinct suggested next year might not measure up to this year.
Kiwifruit Growers Association president Neil Trebilco agreed the increased forecasts were positive.
"If growers get five bucks a tray that's good - anything beyond that they will be very pleased. On those sorts of numbers most growers should be making a good profit."
The forecast gold kiwifruit price has risen to $9.57 a tray from $9.36.
The forecast for the organic green rose to $6.81 from $6.35.
The total fruit and service payment, across all pools and excluding the loyalty premium, is forecast at $882.46 million, up from $856.2m in the August forecast.
The Zespri board has approved an interim dividend for the 2014-15 financial year of 5 cents a share. The record date for the interim payment will be December 5, with payments made on December 12.
The Zespri net profit is forecast to be from $22m to $27m, including recognising $6.3m of gold licence revenue from previous seasons not received yet.