Prices and export returns to growers for kiwifruit and apples from New Zealand are expected to decline over the medium term. The warning comes in a report on the horticultural export outlook from the New Zealand ministry of agriculture and forestry.

According to the report, grower export returns for apples are projected to rise to NZ$11 per carton in the upcoming season, but will generally decline in the medium term following that. Although production and exports are expected to remain static for the seasons from 2001-02 to 2004-05, there is a possibility of further decline as growers battle against continuing low returns.

The reasons for this are sluggish demand for apples globally, an overabundance of supply, competition with other snack foods and growing strength among retailers. These factors are all starting to take their toll with an estimated 400ha of top fruit trees removed from production this year and a further 400-600ha expected to go next year.

Growers of new premium and branded varieties also face have problems as they find it increasingly difficult to cover development costs, finds the report. And with rising production levels, the difficulties in attracting premiums will only increase.

The report also forecasts prices for New Zealand kiwifruit will decline as volumes expand and the NZ dollar appreciates in value. Gold-fleshed kiwifruit payments fell by 40 per cent this past season due to a 15-fold increase in volume, but premiums of 35 per cent over green-fleshed fruit were still achieved. NZ Maf predicts that the price for golden fruit will hold a small premium over the green Hayward in upcoming seasons.

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