Kiwifruit Hayward green on tree

Between the global financial crisis and another huge crop, New Zealand has more green kiwifruit than the market can handle.

In a letter to growers last month, the single-desk export marketer Zespri said one million trays of the fruit, about 3.6m kilograms, needed to be destroyed to maintain prices in export markets.

The dumping of the fruit will proceed over the next two months, reported Business Day. That fruit may simply be left on the vine, or it may be used for stock feed.

All 1m trays of fruit to be destroyed are class two kiwifruit.

The alternative presented to growers in Zespri’s letter was a reduction in value of about NZ$0.20 per tray – the average return per tray last season was NZ$3.63.

In total, 2.5m trays of green kiwifruit will be removed from the export stock, according to Zespri’s corporate and grower services director Carol Ward.

Ms Ward told Radio New Zealand that accounted for less than 2 per cent of the total crop, and was a better option than cold storage of the excess fruit.

On top of the 1m tray destruction, a further 1.5m trays of class one fruit will be diverted to Australia, which is traditionally a market for class two fruit under the export regulations between the two countries.

An extra 500,000 trays of kiwifruit will also need to be absorbed by the New Zealand domestic market, which may lead to a collapse in prices, according to Wes Anderson Smith, CEO of kiwifruit grower and packer Satara.

Export-grade fruit may replace some class two and three fruit on the domestic market as growers attempt to minimise losses.

The dumping will not carry over at all to gold kiwifruit.

In the letter to growers, Zespri’s chief executive Lain Jager said global export supplies of green kiwifruit, mainly consisting of the Hayward variety, grew by over 10m trays in the 2007/08 season.

The increase of Hayward supplies is posing a looming threat to the New Zealand industry, which is facing downward pressure on prices because of growing oversupply issues.

“Our understanding is that Hayward volumes around the world will continue to increase,” Mr Jager told Fruitnet last month.

With New Zealand’s production of the variety growing by about 5 per cent every year, if the global economy doesn’t turn around in 2010 the level of kiwifruit dumping in the country may increase.